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Brewton Consultants Private Limited vs.true Value Propmart Private Limited - Court Judgment

LegalCrystal Citation
CourtDelhi High Court
Decided On
AppellantBrewton Consultants Private Limited
RespondentTrue Value Propmart Private Limited
Excerpt:
..... 1 (one) equity share of rs. 10/- (rupees ten) each of transferee company for every 4 (four) equity shares of rs. 10/- (rupees ten) each held in the transferor company no.1- brewton consultants private limited. 4 (four) equity shares of rs. 10/- (rupees ten) each of transferee company for every 5 (five) equity shares of rs. 10/- (rupees ten) each held in the transferor company no.2- dacha developers private limited. 4 (four) equity shares of rs. 10/- (rupees ten) each of transferee company for every 1 (one) equity shares of rs. 10/- (rupees ten) each held in the transferor company no.3 – pinkcity sales private limited. co.pet.169/2016 page 8 of 17    1 (one) equity shares of rs. 10/- (rupees ten) each of transferee company for every 8 (eight) equity shares of rs. 10/-.....
Judgment:

IN THE HIGH COURT OF DELHI AT NEW DELHI Judgment delivered on:

18. 10.2016 CO. PET._No.169/2016 IN THE MATTER OF:-

"BREWTON CONSULTANTS PRIVATE LIMITED …..... Petitioner

/Transferor Company No.1. AND DACHA DEVELOPERS PRIVATE LIMITED …..... Petitioner

/Transferor Company No.2. AND PINKCITY SALES PRIVATE LIMITED …..... Petitioner

/Transferor Company No.3. AND RIVER PROPERTIES PRIVATE LIMITED …..... Petitioner

/ Transferor Company No.4. AND RSS PETRO CHEM PRIVATE LIMITED …..... Petitioner

/ Transferor Company No.5. AND SHIVAM PLASTOCRAFT PRIVATE LIMITED …..... Petitioner

/ Transferor Company No.6 WITH CO.PET.169/2016 Page 1 of 17 TRUE VALUE PROPMART PRIVATE LIMITED …..... Petitioner

/Transferee Company Through: Mr Mukesh Sukhija, Advocate for the petitioners. Ms Aparna Mudiam, Asst. ROC for RD. Mr Rajiv Bahl, Advocate for OL. CORAM: HON’BLE MR JUSTICE SIDDHARTH MRIDUL JUDGMENT

SIDDHARTH MRIDUL, J.

CO.APPL. 2847/2016_& CO.APPL. 3622/2016_(Condonation of delay) The delay which is stated to be of 99 days, on the part of the Official Liquidator, in filing his report, and of 102 days, on the part of the Regional Director, in filing the affidavit, is condoned. The aforesaid report and affidavit are taken on record. The applications are disposed of accordingly. CO.PET. 169 OF2016 1. The present is a Second Motion Petition filed jointly, by Brewton Consultants Private Limited (hereinafter referred to as “Transferor Company no.1”), Dacha Developers Private Limited (hereinafter referred to as “Transferor Company no.2”), Pinkcity Sales Private Limited (hereinafter referred to as “Transferor Company no.3”), River Properties Private Limited CO.PET.169/2016 Page 2 of 17 (hereinafter referred to as “Transferor Company no.4”), RSS Petro Chem Private Limited (hereinafter referred to as “Transferor Company no.5”), Shivam Plastocraft Private Limited (hereinafter referred to as “Transferor Company no.6”) and True Value Propmart Private Limited (hereinafter referred to as “Transferee Company”) under Sections 391(2) & 394 of the Companies Act, 1956 (hereafter referred to as ‘the Act’) for approval of the Scheme of Amalgamation between Transferor Companies Nos. 1 to 6 with the Transferee Company (hereinafter referred to as ‘Scheme’).

2. The Transferor Companies and the Transferee Company have been hereinafter, jointly, referred to as ‘Petitioner Companies’.

3. The registered offices of the... Petitioner

Companies are situated in the National Capital Territory of Delhi, and therefore, this Court has the necessary jurisdiction to adjudicate the present petition.

4. The details of the authorized share capital, issued, subscribed and paid up capital qua... Petitioner

Companies, have been set out in detail in the present Petition.

5. The Transferor Company No.1 was originally incorporated under the Act, on 25.06.2007 with the Registrar of Companies, NCT of Delhi and Haryana, New Delhi. CO.PET.169/2016 Page 3 of 17 6. The Transferor Company No.2 was originally incorporated under the Act, on 16.09.2006 with the Registrar of Companies, NCT of Delhi and Haryana, New Delhi.

7. The Transferor Company No.3 was originally incorporated under the Act, on 7.01.2008 with the Registrar of Companies, West Bengal. Thereafter Transferor Company No.3 from the state of West Bengal to the Registrar of Companies NCT of Delhi and Haryana, New Delhi on 27.10.2015.

8. The Transferor Company No.4 was originally incorporated under the Act, on 5.03.2007 with the Registrar of Companies, NCT of Delhi and Haryana, New Delhi.

9. The Transferor Company No.5 was originally incorporated under the Act, on 30.06.2003 with the Registrar of Companies, NCT of Delhi and Haryana, New Delhi.

10. The Transferor Company No.6 was originally incorporated under the Act, on 21.04.2005 with the Registrar of Companies, NCT of Delhi and Haryana, New Delhi.

11. The authorized share capital of the Transferor Company No.1 is Rs.10,00,000/- (Rupees Ten Lacs), divided into 1,00,000 shares of Rs. 10/- each, as on 31.03.2015. The issued, subscribed and paid-up share capital of CO.PET.169/2016 Page 4 of 17 the Transferor Company No.1 is Rs.3,50,000/- ( Rupees Three Lac Fifty Thousand), divided into 35,000 shares of Rs.10/- each, as on 31.03.2015.

12. The authorized share capital of the Transferor Company No.2 is Rs.25,00,000/- ( Rupees Twenty Five Lacs), divided into 2,50,000 shares of Rs.10/- each, as on 31.03.2015. The issued, subscribed and paid-up share capital of the Transferor Company No.2 is Rs.15,15,000/- (Rupees Fifteen Lacs Fifteen Thousand), divided into 1,51,500 shares of Rs.10/- each, as on 31.03.2015.

13. The authorized share capital of the Transferor Company No.3 is Rs.25,00,000/- (Rupees Twenty Five Lacs Only), divided into 2,50,000 shares of Rs.10/- each, as on 31.03.2015. The issued, subscribed and paid-up share capital of the Transferor Company No.3 is Rs.25,00,000/- (Rupees Twenty Five Lacs Only), divided into 2,50,000 shares of Rs.10/- each, as on 31.03.2015.

14. The authorized share capital of the Transferor Company No.4 is Rs.25,00,000/- (Rupees Twenty Five Lacs Only), divided into 2,50,000 shares of Rs.10/- each, as on 31.03.2015. The issued, subscribed and paid-up share capital of the Transferor Company No.4 is Rs.10,33,750/- (Rupees Ten Lacs Thirty Three Thousand Seven Hundred Fifty Only), divided into 1,03,375 shares of Rs.10/- each, as on 31.03.2015. CO.PET.169/2016 Page 5 of 17 15. The authorized share capital of the Transferor Company No.5 is Rs.1,00,00,000/- (Rupees One Crore), divided into 10,00,000 shares of Rs.10/- each, as on 31.03.2015. The issued, subscribed and paid-up share capital of the Transferor Company No.5 is Rs.82,20,000/- ( Rupees Eighty Two Lacs Twenty Thousand Only), divided into 8,22,000 shares of Rs.10/- each, as on 31.03.2015.

16. The authorized share capital of the Transferor Company No.6 is Rs.1,00,00,000/- (Rupees One Crore), divided into 10,00,000 shares of Rs.10/- each, as on 31.03.2015. The issued, subscribed and paid-up share capital of the Transferor Company No.6 is Rs.3,50,000/- (Rupees Three Lacs Fifty Thousand Only), divided into 35,000 shares of Rs.10/- each, as on 31.03.2015.

17. The Transferee Company was originally incorporated under the Companies Act, 1956 on 28.03.2007 with the Registrar of Companies, NCT of Delhi and Haryana, New Delhi.

18. The authorized share capital of Transferee Company is Rs.1,00,00,000/- (Rupees One Crore), divided into 10,00,000 shares of Rs.10/- each, as on 31.03.2015. The issued, subscribed and paid-up share capital of the Transferee Company is Rs.21,35,000/- (Rupees Twenty One CO.PET.169/2016 Page 6 of 17 Lacs Thirty Five Thousand Only), divided into 2,13,500 shares of Rs.10/- each, as on 31.03.2015.

19. It has been averred on behalf of the... Petitioner

Companies that there are no proceedings pending against them, under Sections 235 to 251 of the Act (including their corresponding sections of the Companies Act, 2013).

20. It has been further submitted on behalf of the... Petitioner

Companies that the Scheme has been approved by the respective Board of Directors (BODs) of the... Petitioner

Companies. Copies of the BODs resolutions dated 14.01.2016 have been filed and the same are on record.

21. The copies of Memorandum of Association and Articles of Association as well as the latest audited annual accounts for the year ended 31.03.2015 of the petitioner companies have been filed and the same are on record.

22. A copy of the Scheme has been duly placed on record and the salient features of the Scheme, have been incorporated and detailed, in the present petition and the accompanying affidavit. It has been averred on behalf of the... Petitioner

Companies that the proposed amalgamation would, inter alia, enable pooling of physical, financial and human resources of the companies for the most beneficial utilization of these factors in the combined entity. Further, it has been averred that the proposed scheme would lead to usual CO.PET.169/2016 Page 7 of 17 economies of a centralised and a large company; would lead to combining managerial and operating strength to build a wider capital and financial base.

23. It has been stated on behalf of the... Petitioner

companies that the proposed amalgamation, would further aid in strengthening, consolidating and stabilising the business of the companies in order for the resulting company to be able to become more profitable and competitive in the market.

24. The Share Exchange Ratio for the Amalgamation has been provided for in the Scheme which is as under :    1 (One) Equity Share of Rs. 10/- (Rupees Ten) each of Transferee Company for every 4 (Four) Equity Shares of Rs. 10/- (Rupees Ten) each held in the Transferor Company No.1- BREWTON CONSULTANTS PRIVATE LIMITED. 4 (Four) Equity Shares of Rs. 10/- (Rupees Ten) each of Transferee Company for every 5 (Five) Equity Shares of Rs. 10/- (Rupees Ten) each held in the Transferor Company No.2- DACHA DEVELOPERS PRIVATE LIMITED. 4 (Four) Equity Shares of Rs. 10/- (Rupees Ten) each of Transferee Company for every 1 (One) Equity Shares of Rs. 10/- (Rupees Ten) each held in the Transferor Company No.3 – PINKCITY SALES PRIVATE LIMITED. CO.PET.169/2016 Page 8 of 17    1 (One) Equity Shares of Rs. 10/- (Rupees Ten) each of Transferee Company for every 8 (Eight) Equity Shares of Rs. 10/- (Rupees Ten) each held in the Transferor Company No.4 – RIVER PROPERTIES PRIVATE LIMITED. 1 (One) Equity Shares of Rs. 10/- (Rupees Ten) each of Transferee Company for every 2 (Two) Equity Shares of Rs. 10/- (Rupees Ten) each held in the Transferor Company No.5 – RSS PETROCHEM PRIVATE LIMITED. 1 (One) Equity Shares of Rs. 10/- (Rupees Ten) each of Transferee Company for every 40 (Forty) Equity Shares of Rs. 10/- (Rupees Ten) each held in the Transferor Company No.6 – SHIVAM PLASTOCRAFT PRIVATE LIMITED.

25. To recapitulate, the... Petitioner

Companies had, in the earlier round, filed an application (i.e. application for the First Motion), being Company Application (M) No.24 of 2016, whereby a prayer was sought, for dispensation of the requirement of convening of meetings of the equity shareholders, secured and unsecured creditors of the... Petitioner

Companies.

26. This Court by way of order dated 10.02.2016, allowed the said application and dispensed with the requirement of convening meetings of Shareholders, secured and unsecured creditors of the... Petitioner

Companies. The transferor company No.1 has 03 equity shareholders and 1 unsecured CO.PET.169/2016 Page 9 of 17 creditor. All the equity shareholders and the sole unsecured creditor have given their consents/no objections in writing to the proposed Scheme of Amalgamation. There is no secured creditor of the transferor company No.1.

27. The transferor company No.2 has 04 equity shareholders and 02 unsecured creditors. All the equity shareholders and both the unsecured creditors have given their consents/no objections in writing to the proposed Scheme of Amalgamation. There is no secured creditor of the transferor company No.2.

28. The transferor company No.3 has 02 equity shareholders. Both the equity shareholders have given their consents/no objections in writing to the proposed Scheme of Amalgamation. There is no secured or unsecured creditor of the transferor company No.3.

29. The transferor company No.4 has 02 equity shareholders and 02 unsecured creditors. Both the equity shareholders and both the unsecured creditors have given their consents/no objections in writing to the proposed Scheme of Amalgamation. There is no secured creditor of the transferor company No.4.

30. The transferor company No.5 has 02 equity shareholders and 01 unsecured creditor. Both the equity shareholders and lone unsecured creditor CO.PET.169/2016 Page 10 of 17 have given their consents/no objections in writing to the proposed Scheme of Amalgamation. There is no secured creditor of the transferor company No.5.

31. The transferor company No.6 has 02 equity shareholders and 02 unsecured creditors. Both the equity shareholders and both the unsecured creditors have given their consents/no objections in writing to the proposed Scheme of Amalgamation. There is no secured creditor of the transferor company No.6.

32. The transferee company has 02 equity shareholders and 02 unsecured creditors. Both the equity shareholders and both the unsecured creditors have given their consents/no objections in writing to the proposed Scheme of Amalgamation. There is no secured creditor of the transferee company.

33. Pursuant to the same, the... Petitioner

Companies have filed the instant petition (i.e. Second Motion Petition). Notice in the present petition was issued by this Court, by way of the order dated 14.03.2016. Notice in the present petition was accepted on behalf of the Official Liquidator (OL) and the Regional Director (RD), Northern Region.

34. Furthermore, vide order of this Court dated 14.03.2016, citations were directed to be published. It has been noted that Citations were published, in Delhi Editions of the newspapers, namely, ‘Business Standard’ (English, Delhi Edition) and ‘Jansatta’ (Hindi, Delhi Edition), on 14.05.2016, in CO.PET.169/2016 Page 11 of 17 compliance with the said order. An affidavit dated 04.08.2016, demonstrating service of the petition on the Official Liquidator, Registrar of Companies and the Regional Director, Northern Region and publishing of the citations has been filed and the same is on record.

35. Pursuant to the issuance of notices in the present petition, report of the Official Liquidator (OL) has been filed on 04.08.2016, wherein, inter alia, it has been stated that the office of the OL has not received any complaint against the proposed Scheme from any person/party interested in the Scheme in any manner and that the affairs of the... Petitioner

Companies do not appear to have been conducted in a manner prejudicial to the interest of its members, creditors or to public interest.

36. In other words, it has been averred by the OL in the report that the affairs of the... Petitioner

Companies, do not fall foul of the provisions of the Second Proviso to Section 394(1) of the Act. Thus, it has been submitted on behalf of the OL, in effect, that no objection would be raised on behalf of the OL, if this Court were to sanction the Scheme.

37. Further, in response to the notices issued in the present Petition, Mr. N. K. Bhola, Regional Director, Northern Region, Ministry of Corporate Affairs, (RD) filed an affidavit dated 05.08.2016 wherein, inter alia, it has been stated that, the Income Tax Department has brought to their notice that CO.PET.169/2016 Page 12 of 17 Transferor Company No.4 is under scrutiny for the assessment year 2014- 2015, which is under process and time barring on 31.12.2016. It has further been averred by the office of the RD in the said affidavit that a demand of Rs.591/- FBT for the assessment year 2008-2009 as stated by the Income Tax Department, is outstanding and that the scrutiny assessment for the assessment year 2015-16 is pending.

38. Further, it has been stated in the said affidavit filed by the RD that they would have no objection in the event, this Court were to grant a sanction to the proposed Scheme, subject however, to the abovementioned observations.

39. In response to the observations made by the RD, the transferee company filed an affidavit dated 20.09.2016, wherein, it has been stated that the pursuant to the Scheme becoming effective, all liabilities, provisions, duties and obligations including Income Tax and other statutory liabilities, if any, of every kind, nature and description of the Transferor Companies whether provided for or not in the books of accounts of the Transferor Companies shall devolve and shall stand transferred or be deemed to be transferred without any further act or deed, to the Transferee Company with effect from the Appointed Date on which the Scheme will become effective and shall be the liabilities, provisions, duties and obligations of the CO.PET.169/2016 Page 13 of 17 Transferee Company. Further, it has been stated in the said affidavit, the Transferee Company undertakes to repay all liabilities in respect of the income tax standing due or arising after the assessment for the Assessment Year 2014-15 qua the Transferor Company No.4, subject to rights of appeal and challenge available to it as per the law. It has further been stated that the transferee company has undertaken to extend all possible cooperation to Income Tax Department in completing pending assessment proceedings of Transferor company no.4 or in any other proceedings, if any initiated.

40. Learned counsel appearing on behalf of the petitioner companies undertakes to discharge all the liabilities qua the Income Tax demands which stand due or which may arise. Further learned counsel appearing on behalf of the petitioner companies undertakes that the Transferee Company shall discharge the liability of Rs.591/- FBT for the assessment year 2008-2009 as raised by the Income Tax Department within a period of 04 weeks from today.

41. Ms. Aparna Mudiam, Assistant ROC appearing on behalf of the RD, states that, in view of the undertaking given in this Court today, and in view of the averments made in the affidavit dated 20.09.2016 by the Transferee Company, the objections raised by the Regional Director stand satisfied. CO.PET.169/2016 Page 14 of 17 42. Thus, it is evident that neither the Regional Director nor the Official Liquidator has any objection remaining to the grant of relief, as prayed for by the petitioner, in the present petition.

43. It has been noted that no objections have been received to the Scheme from any other party. It has been submitted by the... Petitioner

Companies, vide affidavit dated 04.08.2016, that neither the... Petitioner

Companies nor their counsel have received any objection pursuant to the citations published in the newspapers.

44. In view of the foregoing, upon considering the approval accorded by the members and creditors of the... Petitioner

Companies to the proposed Scheme, and the affidavits filed by the Regional Director, Northern Region, Ministry of Corporate Affairs and the Official Liquidator attached to this Court, whereby no objections have been raised to the proposed Scheme by the OL, and in view of the circumstance that the objections rasied by the RD stand satisfied, there appears to be no impediment to the grant of sanction to the Scheme.

45. Consequently, sanction is hereby granted to the Scheme under sections 391 and 394 of the Act. The... Petitioner

Companies will however, comply with the statutory requirements, in accordance with law. CO.PET.169/2016 Page 15 of 17 46. A certified copy of this order, sanctioning the Scheme, be filed with the ROC, within thirty (30) days of its receipt.

47. Resultantly, it is hereby directed that the... Petitioner

Companies will comply with all provisions of the Scheme and, in particular, those which are referred to hereinabove.

48. In any event, notwithstanding what has been stated on behalf of the... Petitioner

Companies hereinabove, the Transferee Company will file an undertaking with this Court, within two weeks from today, stating therein, that it will take over and defray all liabilities of the Transferor Companies. It is also made clear, that the concerned Statutory Authority will be entitled to proceed against the Transferee Companies qua any liability which it would have fastened onto the Transferor Companies for the relevant period, and that, which may arise on account of the Scheme being sanctioned.

49. Notwithstanding the above, if there is any deficiency found or, violation committed qua any enactment, statutory rule or regulation, the sanction granted by this Court to the Scheme will not come in the way of action being taken, albeit, in accordance with law, against the concerned persons, directors and officials of the... Petitioner

Companies. The Transferor Companies shall stand dissolved without being wound 50. up. CO.PET.169/2016 Page 16 of 17 51. It is made clear, that this order shall not be construed as an order granting exemption, inter alia, from, payment of stamp duty or, taxes or, any other charges, if, payable, as per the relevant provisions of law or, from any applicable permissions that may have to be obtained or, even compliances that may have to be made, as per the mandate of law.

52. Learned counsel appearing on behalf of the Official Liquidator prays that costs of at least Rs.2,00,000/- may be paid by the... Petitioner

Companies, keeping in view the fact, that the matter called for examination of extensive records and prioritised hearings. Learned counsel appearing on behalf of the... Petitioner

Companies state that the same is acceptable to them.

53. In view of the foregoing, the... Petitioner

Companies shall deposit a sum of Rs.2,00,000/-, by way of costs, in Common Pool Fund maintained by the Official Liquidator, Delhi.

54. Consequently, the petition is allowed and disposed of, in the aforesaid terms. OCTOBER18 2016 sb/mk SIDDHARTH MRIDUL, J CO.PET.169/2016 Page 17 of 17


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