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Ecotrust Capital Private Limited vs.talentgenie Consultants Private Limited - Court Judgment

LegalCrystal Citation
CourtDelhi High Court
Decided On
AppellantEcotrust Capital Private Limited
RespondentTalentgenie Consultants Private Limited
Excerpt:
.....shareholders of demerged company as a token since the ultimate beneficial shareholders of ecpl, cmdcl , uppl and tcpl are the same and they also hold shares in the same proportion in all four companies. these equity shares will be issued to the ultimate beneficial shareholders of cmdcl in the same proportion as their shareholding in all the companies.” 17. to recapitulate, the... petitioners had, in the earlier round, filed an application (i.e. application for the first motion) being company application (m) no.37 of 2016) whereby a prayer was sought, seeking directions for dispensing with the requirement of convening meetings of the equity & and unsecured creditors of... petitioner company nos. 1 to 4 respectively, there co.pet. 323/2016 page 9 of 14 being no secured creditors.....
Judgment:

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

19. 10. 2016 CO.PET. 323/2016 IN THE MATTER OF:-

"ECOTRUST CAPITAL PRIVATE LIMITED ….Petitioner No.1/Transferor Company AND CHEMICAL AND METALLURGICAL DESIGN COMPANY LIMITED …..Petitioner No.2/Transferee Company /Demerged Company AND UNISYSTEMS PACKERS PRIVATE LIMITED …..Petitioner No.3/Resulting Co. No.1 AND TALENTGENIE CONSULTANTS PRIVATE LIMITED ….Petitioner No.4/Resulting Co. No.2 Through: Mr. Deepak Diwan, Mr. Vinod Kumar and Ms. Himanshi Taneja, Advocates for the... Petitioner

s Ms. Aparna Mudiam, Assistant Registrar of Companies for the Regional Director CO.PET. 323/2016 Page 1 of 14 Mr. Rajiv Bahl, Advocate for the Official Liquidator CORAM: HON’BLE MR JUSTICE SIDDHARTH MRIDUL JUDGMENT

SIDDHARTH MRIDUL, J1 This Joint Petition has been filed under sections 391(2) & 394 of the Companies Act, 1956 by the... Petitioner

Company Nos. 1 to 4 respectively seeking sanction of the Composite Scheme of Arrangement of Ecotrust Capital Private Limited(“Transferor/Petitioner Company No.1” or “ECPL”) and Chemical And Metallurgical Design Company Limited (“Transferee /Demerged /... Petitioner

Company No.2” or “CMDCL”) and Unisystems Packers Private Limited (“Resulting Company No.1/... Petitioner

Company No.3” or “UPPL”) and Talentgenie Consultants Private Limited (“Resulting Company No.2 /... Petitioner

Company No.4” or “TCPL”) whereby ECPL is first merged with CMDCL and subsequently the Proposed Amalgamated Company demerges its Industrial Undertaking into UPPL and the Investment Undertaking into TPPL (including the Investments which is acquired as a result of the Amalgamation of ECPL into CMDCL). CO.PET. 323/2016 Page 2 of 14 2. The Resulting Companies Nos. I-II, have been hereinafter, jointly referred to as “Resulting Companies”. The Transferor Company, Transferee Company / Demerged Company and the Resulting Companies, have been hereinafter, jointly referred to as “the... Petitioner

s”.

3. The registered offices of the... Petitioner

s 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 date of incorporation of the... Petitioner

s, authorized share capital, issued, subscribed and paid up capital of the... Petitioner

s, have been set out in Scheme.

5. Transferor Company /ECPL was incorporated on 25th April, 2008 under the provisions of the Act.

6. The authorized share capital of Transferor Company / ECPL is Rs.25,00,000/- (Rupees Twenty Lakhs only), divided into 2,50,000 (Two Lakhs Fifty Thousand) Equity Shares of the face value of Rs.10/- each. While the issued, subscribed and paid-up share capital of Transferor Company / ECPL is Rs. 16,00,000/- (Rupees Sixteen Lakhs Only), divided into 1,60,000 (One Lakh Sixty Thousand) Equity Shares of Rs.10/-each. CO.PET. 323/2016 Page 3 of 14 Transferee Company / Demerged Company / CMDCL was incorporated on 4th November, 1965 with the Registrar of Companies, NCT of Delhi & Haryana.

7. The authorized share capital of Transferee Company / Demerged Company / CMDCL is Rs.1,00,00,000/- (Rupees One Crore Only), divided into 1,00,000 (One Lakh) Equity Shares of the face value of Rs.100/- each. While the issued, subscribed and paid-up share capital of Transferee Company / Demerged Company / CMDCL is Rs. 8,09,400/- (Rupees Eight Lakhs Nine Thousand Four Only), divided into 8,094 (Eight Thousand and Ninety Four) Equity Shares of Rs.100/-each.

8. Resulting Company No.1 / UPPL was incorporated on 2nd December, 2009 under the provisions of the Act.

9. The authorized share capital of Resulting Company No.1 / UPPL is Rs.1,00,000/- (Rupees One Lakhs Only), divided into 10,000 (Ten Thousand) Equity Shares of the face value of Rs.10/- each. While the issued, subscribed and paid-up share capital of Resulting Company No.1 / UPPL is Rs. 1,00,000/- (Rupees One Lakh Only), divided into 10,000 (Ten Thousand) Equity Shares of Rs.10/-each. CO.PET. 323/2016 Page 4 of 14 10. Resulting Company No.2 / TCPL was incorporated on 9th August, 2012 under the provisions of the Act.

11. The authorized share capital of Resulting Company No.2 / TCPL is Rs.1,00,000/- (Rupees One Lakhs Only), divided into 10,000 (Ten Thousand) Equity Shares of the face value of Rs.10/- each. While the issued, subscribed and paid-up share capital of Resulting Company No.1 / UPPL is Rs. 1,00,000/- (Rupees One Lakh Only), divided into 10,000 (Ten Thousand) Equity Shares of Rs.10/-each.

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

s 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).

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

s that the Scheme has been approved by the respective Board of Directors (BOD) of the... Petitioner

s. The copies of the BOD resolutions dated 28.01.2016, 27.01.2016, 29.01.2016 and 29.01.2016 with respect to... Petitioner

No.1, 2, 3 and 4, respectively, have been filed and the same are on record.

14. The Copies of the Memorandum of Association and Articles of Association, of each of the... Petitioner

s, have been duly filed as Annexures to Company Application (M) No.37 of 2016 (Application for First Motion), CO.PET. 323/2016 Page 5 of 14 which earlier came to be filed by the... Petitioner

s. The same are on record. The audited financial statements, as on March 31, 2015, pertaining to each of the... Petitioner

s, have also been duly filed by all the... Petitioner

s and the same are on record.

15. 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 urged on behalf of the... Petitioner

s that the proposed Composite Scheme of Arrangement would, inter alia, entail the following benefits: “Whereas Chemical and Metallurgical Design Company Limited (CMDCL) is in three vertical businesses viz.

1) Running a high end Business Center in Nehru Place, New Delhi by the name of Paharpur Business Center.

2) Investments in shares securities, mutual funds and other finance instruments.

3) Owns an industrial plot at Okhla Industrial Area in which the company is in the process to set up a packaging industry. And Whereas Ecotrust Capital Private Limited (ECPL) is interalia holding 77.46% of shares in CMDCL as one of the Promoters and also has a division for investments in shares, securities and other finance investments. CO.PET. 323/2016 Page 6 of 14 And Whereas the ultimate beneficial shareholders of the CMDCL and ECPL are the same and are also holding the equity shares in the same proportion in both the companies (apart from 6 other family members who hold 1 share each in CMDCL so as to comply with the legal requirements of Company law which stipulates that there should be atleast seven shareholders in a closely held Public Limited Company). And Whereas Consultants were engaged to restructure the CMDCL and ECPL in such a manner that the businesses not having synergies should be moved to Special Purpose Vehicles (SPVs) so that each of the three different businesses/undertakings is hived off into a separate company so as to have focused businesses under professional management as vehicles of growth and remove unnecessary layers of shareholding. And Whereas two companies from within the group have been identified and chosen as Special Purpose Vehicles (SPVs) viz Talentgenie Consultants Private Limited (TCPL) and Unisystems Packers Private Limited (UPPL) so that the three undertakings i.e. Business Center undertaking, Investment and Finance undertaking and the Industrial undertaking are held by three separate companies. And Whereas the Consultants have proposed the structuring in such a manner that ECPL is first merged with CMDCL and subsequently the Proposed Amalgamated Company demerges its Industrial Undertaking into UPPL and the Investment Undertaking into TPPL CO.PET. 323/2016 Page 7 of 14 (including the Investments which is acquired as a result of the Amalgamation of ECPL into CMDCL). The factors which induced the decision were, inter alia, as follows:

1. The business strategies for the three businesses are altogether different 2. The association of collaborators and strategic partners will not mature until core businesses are segregated into separate entities 3. Dedicated business will only attract Joint Venture parties. By focused management it is easier to reach levels of excellence.

4. The three verticals do not have any synergies. And Whereas it is envisioned that the growth of these businesses would require induction of capital funding to be generated through (a) Strategic investors (b) Technical & financial collaborators (c) Private equity investors (d) Banks and financial institutions (e) IPOs And Whereas private funds and collaborations are mostly sector specific. Therefore in order to realize the long term growth, it has been decided that 1. The ‘Business Centre Division’ will be carried by CMDCL.

2. The ‘Industrial Division’ will be under UPPL. (i) The ‘Investment Division’ will be under TCPL.” CO.PET. 323/2016 Page 8 of 14 16. So far as the share exchange ratio is concerned Clause 1.2(c) of Part-B and Clause 1.1 of Part-E of the Scheme provides: Upon the Scheme becoming effective and upon amalgamation of ECPL with the Transferee Company, the Transferee Company shall issue 100 equity shares of Rs. 100/- each fully paid up of CMDCL as a token to shareholders of ECPL as the ultimate beneficial shareholders of CMDCL and ECPL are the same and also hold the shares in the same proportion in both the companies (apart from 6 other immediate family members who hold 1 share each in CMDCL so as to comply with the legal requirements of Company law which stipulates that there should be at least seven shareholders in a closely held Public Limited Company). These 100 equity shares will be issued to the shareholders of ECPL in the same proportion as their shareholding in ECPL. As per the Valuers Report, both UPPL and TCPL will each issue 100 fully paid up equity Shares of Rs. 10 to the ultimate beneficial shareholders of Demerged company as a token since the ultimate beneficial shareholders of ECPL, CMDCL , UPPL and TCPL are the same and they also hold shares in the same proportion in all four companies. These equity shares will be issued to the ultimate beneficial shareholders of CMDCL in the same proportion as their shareholding in all the companies.” 17. To recapitulate, the... Petitioner

s had, in the earlier round, filed an application (i.e. application for the first motion) being Company Application (M) No.37 of 2016) whereby a prayer was sought, seeking directions for dispensing with the requirement of convening meetings of the Equity & and Unsecured Creditors of... Petitioner

Company Nos. 1 to 4 respectively, there CO.PET. 323/2016 Page 9 of 14 being no Secured Creditors of... Petitioner

Company Nos. 1 to 4 and Unsecured Creditors of... Petitioner

Company No.1, 3 & 4 respectively. Vide order dated 8th March 2016, this Court allowed the Application and dispensed with the requirement of convening meetings of Equity Shareholders of the... Petitioner

Companies and Unsecured Creditors of... Petitioner

Company No.2.

18. Pursuant to the same, the... Petitioner

s, have filed the instant petition (i.e. Second Motion). Notice in this petition was issued by this Court, by way of the order dated 19.04.2016. Notice was accepted on behalf of the Official Liquidator (OL) and the Regional Director (RD), Northern Region.

19. It has been noted that Citations were published, on 3rd September, 2016 in Delhi Editions of the newspapers, namely, ‘Business Standard’ (English, Delhi Edition) and ‘Jansatta’ (Hindi, Delhi Edition), in compliance with the order of this Court dated 19.04.2016. An affidavit dated 09.09.2016 demonstrating service of the petition on the Official Liquidator, Registrar of Companies and the Regional Director, Northern Region.

20. Pursuant to the notices issued, the Official Liquidator sought information from the... Petitioner

Companies. Based on the information received, the Official Liquidator D. P. Ojha had filed his report dated _, September 2016 wherein he has stated that he has not received any CO.PET. 323/2016 Page 10 of 14 complaint against the proposed Scheme from any person/party interested in the Scheme in any manner and that the affairs of the Transferor Company do not appear to have been conducted in a manner prejudicial to the interest of its members or to public interest.

21. In response to the notices issued in the Petition, Mr Narendra Kumar Bhola, the Learned Regional Director, Northern Region, Ministry of Corporate Affairs after receiving the report from the Registrar of Companies, filed their report on 3rd October, 2016. That vide Para 8 of the said Report, it has been submitted that... Petitioner

Company No.2 has a pending Income Tax liability of Rs. 12,331,179/- for the A.Y. 2006-07 & 2007-08.

22. On the date of hearing the Learned Counsels of the... Petitioner

Companies submits that the said observation is made in reference to... Petitioner

Company No.2 which is a continuing Company and has no bearing on the sanction of the Scheme.

23. Further the Regional Director vide Para 9, has submitted that the Registrar of Companies, Delhi & Haryana vide para 31 of his report has stated that it has mentioned in the valuation Report to the proposed Scheme of Arrangement that the Appointed Date for such a merger would be 1st April, 2015 and for demerger would be 1st April, 2015 (post Amalgamation) whereas as per the Scheme of Arrangement, the Appointed Date is fixed as CO.PET. 323/2016 Page 11 of 14 1st April, 2016 and for the demerger would be 1st April, 2016(post Arrangement). Further, the Regional Director has subsequently clarified that a certificate regarding appointed date has been furnished by the Chartered Accountants concerned stating that the appointed date inadvertently has been typewritten as 01.04.2015 instead of 01.04.2016.

24. No objection has been received to the Composite Scheme of Arrangement from any other party. Mr. Vishwa Kamal Meattle, Director of the... Petitioner

Companies, has filed an Affidavit dated 3rd October, 2016 confirming that neither the... Petitioner

Companies nor their Legal Counsel has received any objection pursuant to citations published in the newspapers.

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

s 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 High Court, whereby no objections have been raised to the proposed Scheme, there appears to be no impediment to the grant of sanction to the Scheme. Consequently, sanction is hereby granted to the Scheme under section 391 and 394 of the Companies Act, 1956. The... Petitioner

s will however, comply with the statutory requirements in accordance with law. CO.PET. 323/2016 Page 12 of 14 26. A certified copy of the order, sanctioning the scheme, be filed with the ROC, within thirty (30) days of its receipt.

27. Resultantly, it is hereby directed that the petitioners will comply with all provisions of the scheme and, in particular, those which are referred to hereinabove.

28. 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 petitioners.

29. The transferor company shall stand dissolved without being wound up.

30. 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.

31. Learned counsel appearing on behalf of the Official Liquidator prays that costs of at least Rs.50,000/- may be paid by the petitioners, keeping in view the fact, that the matter called for examination of extensive records and CO.PET. 323/2016 Page 13 of 14 prioritized hearings. Learned counsel appearing on behalf of the petitioners states that the same is acceptable to him.

32. In view of the foregoing, the petitioners shall deposit a sum of Rs.50,000/- by way of costs, with the Official Liquidator, Delhi.

33. Consequently, the petition is allowed and disposed of, in the aforesaid terms. SIDDHARTH MRIDUL, J OCTOBER19 2016 ra/sd CO.PET. 323/2016 Page 14 of 14


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