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In Re: Kasturi Finlease and Investment Ltd. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtRajasthan High Court
Decided On
Case NumberS.B. Company Petition No. 25 of 2003
Judge
Reported in[2004]53SCL133(Raj)
ActsCompanies Act, 1956 - Sections 391, 391(2) and 394
AppellantIn Re: Kasturi Finlease and Investment Ltd.
Appellant Advocate A. Kasliwal, Adv.
Respondent Advocate B.C. Meena, Adv.
Excerpt:
.....sections 235 to 251 of the companies act, 1956 are pending against it. 26. the sanction of the scheme of amalgamation will be for the benefit of the transferor-company as well as the transferee-company. 27. the share exchange ratio for the purpose of implementation of the terms of the scheme of amalgamation has been prepared by a reputed firm of chartered accountants and has been unanimously accepted by the board of directors of both the companies as well the shareholders and the creditors of these companies. nahta, the regional director, northern region, department of company affairs, ministry of finance, kanpur, has not objected the petition, the report of the official liquidator and the report of the auditors, i am satisfied that the transferor and transferee-companies have..........the petition that the object of this petition is to obtain sanction of the court to the proposed scheme of amalgamation of the transferor-company with the transferee-company.3. this petition is filed under sections 391 and 394 of the companies act, 1956 by the petitioner transferee-company for grant of sanction of the scheme of amalgamation of the transferor-company in the transferee-company.4. the transferee-company filed earlier an application under sections 391 and 394 of the companies act, 1956 being company application no. 22/2003 for dispensing with the meeting of the preference shareholder of the transferee-company as the only preference shareholder of it is the transferor-company, which has already given its written consent/n.o.c. to the proposed amalgamation. in view of this.....
Judgment:
ORDER

S.K. Keshote, J.

1. Shri A. Kasliwal, the learned counsel appearing on behalf of the petitioner Ajanta Soya Limited, at the outset of his contentions, submitted that in the petition the prayer is not made for dissolution of the Kasturi Finlease & Investment Limited (hereinafter shall be referred to as 'the transferor-company'). It is only a case of merger of the transferor-company in the petitioner Ajanta Soya Limited (hereinafter shall be referred to as 'the transferee-company').

2.1 find from para No. 1 of the petition that the object of this petition is to obtain sanction of the court to the proposed scheme of Amalgamation of the transferor-company with the transferee-company.

3. This petition is filed under Sections 391 and 394 of the Companies Act, 1956 by the petitioner transferee-company for grant of sanction of the scheme of amalgamation of the transferor-company in the transferee-company.

4. The transferee-company filed earlier an application under Sections 391 and 394 of the Companies Act, 1956 being Company Application No. 22/2003 for dispensing with the meeting of the preference shareholder of the transferee-company as the only preference shareholder of it is the transferor-company, which has already given its written consent/N.O.C. to the proposed amalgamation. In view of this fact, the court ordered that it is not necessary for convening of the meeting of the preference shareholder of the transferee-company and the prayer made for dispensing with the convening of the meeting of the preference shareholder of the transferee-company was granted under the order dated 2-5-2003. The Court ordered for calling of the meeting of the equity shareholder, secured creditors and unsecured creditors of the transferee-company. The meeting was directed to be convened on 12th of July, 2003 at 1.00 p.m., 2.00 p.m. and 3.30 p.m. respectively, at the registered office for the purpose of considering and if thought fit approving with or without modification the scheme of amalgamation proposed to be made of transferor-company in the transferee-company, filed along with that application.

5. This Court under the order aforesaid appointed Shri Manoj Pareek, Advocate to act as a Chairman of the said meetings and should report the result thereof to the Court. The notices of the meetings aforesaid of the equity shareholder, secured creditors and unsecured creditors were issued by the transferee-company in the Dainik Bhashkar and Dainik Navjyoti, the daily newspapers. The aforesaid publications were affected on 14th and 15th of June, 2003. The petitioner also caused to issue and send notices along with the copy of the scheme and the explanatory statement as required under Section 393 of the Companies Act, 1956 together with the forms of proxy individually to the said creditors. In compliance of the order of this Court dated 2-5-2003, the meetings of the aforesaid creditors were held at the time, date and place fixed by the Court and Shri Manoj Pareek, Advocate, acted as Chairperson of the meetings.

6. The said meeting was attended either personally or through authorised representative/proxy by 36 Equity Shareholders of the said Company holding together 38,95,807 equity shares and carrying 38,95,807 votes. The scheme of amalgamation of the transferor-company was read out and explained by Mr. Rajeev K. Goel, the Company Secretary, on the instructions of Mr. Manoj Pareek, Advocate, to the meeting. The said meeting was unanimously of the opinion that the Scheme of Amalgamation of the transferor-company with the transferee-company should be approved, adopted and agreed to, without any modification. None of the equity shareholders voted against the said scheme of amalgamation, being adopted and carried into effect.

7. On 5-9-2003 the notices were issued for hearing of the petition to the Regional Director, Kanpur for the date 31-10-2003. The representation/affidavit of the Regional Director, Northern Region, Department of Company Affairs, Kanpur, under Section 394A of the Companies Act, 1956, has been submitted. The Regional Director has stated on oath that the Central Government has no objection to the proposed Scheme of Amalgamation and the same may be decided by this court on merits.

8. The transferee-company was incorporated under the provisions of the Companies Act, 1956 on 13th of January, 1992 as a Limited Company with the Registrar of Companies, Delhi & Haryana at New Delhi. The registered office of the Company was subsequently shifted from NCT of Delhi to the State of Rajasthan under the Registrar of Companies, Rajasthan at Jaipur.

9. A copy of the Memorandum and Articles of Association of the transferee-company now in force has already been filed in the Court with the first motion application.

10. Presently the Registered Office of the transferee-company is situated at SP-916, RIICO Industrial Area, Phase-III, Bhiwadi-301 019 District Alwar in the State of Rajasthan which is within the jurisdiction of this Court.

11. The objects of the transferee-company are set out in its Memorandum of Association which has been filed with the first motion application.

12. Presently the transferee-company is engaged in the business of manufacturing of vanaspati and refined oil, export of rice and other related activities.

13. The present authorized share capital of the transferee-company is Rs. 14,25,00,000 divided into 1,30,00,000 equity shares of Rs. 10 each aggregating Rs. 13,00,00,000 and 1,25,000; 15 per cent non-cumulative, non convertible redeemable preference shares of Rs. 100 each aggregating Rs. 1,25,00,000. The present issued, subscribed and paid-up share capital of the company is Rs. 11,22,00,000 divided into 99,70,000 equity shares of Rs. 10 each aggregating Rs. 9,97,00,000 and 1,25,000 15 per cent non-cumulative, non-convertible redeemable preference shares of Rs. 100 each aggregating Rs. 1,25,00,000.

14. The Accounts of the transferee-company have been prepared and audited for the year ended March 31, 2002 and the details have been given in para No. 1.6 of the petition.

15. The Board of Directors of the transferee-company in the meeting held on 13-12-2002 have unanimously approved the proposed Scheme of Amalgamation of transferor-company.

16. The transferee-company in para No. 1.9 of the petition submitted that to the best of its knowledge, no proceedings under Sections 235 to 251 of the Companies Act, 1956 are pending against it.

17. That the transferor-company was incorporated on 1st August, 1994 under the provisions of the Companies Act, 1956. The registered office of the transferor-company is situated at S-547, School Block, Shakarpur, Delhi - 110 092, which is outside the jurisdiction of this court. The transferor-company had filed the necessary application/petition with the High Court of Delhi at New Delhi being the company petition No. 101 of 2003 connected with the company application No. (M) 1 of 2003 and the High Court of Delhi was pleaded to approve the scheme of amalgamation on 23rd of May, 2003.

18. The objects of the transferor-company are set out in its memorandum of association, a copy of which has been filed with the first motion application. Presently the transferor-company is engaged in the business of the investment in shares, providing loans and other related activities.

19. The present authorized share capital of the transferor-company is Rs. 5,50,00,000 divided into 55,00,000 equity shares of Rs. 10 each. The present issued and subscribed share capital of the company is Rs. 5,01,89,000 divided into 50,18,900 equity shares of Rs. 10 each while the paid-up share capital of the company is Rs, 3,83,97,750, after deducting Rs. 1,17,91,250 as calls in arrears. The accounts of the transferor-company have been prepared and audited for the year ended March 31, 2002 and the details are given in para No. 2.6 of the petition.

20. The Board of Directors of the transferor-company in its meeting held on 13th of December, 2002 unanimously approved the proposed scheme of Amalgamation of the transferor-company with the transferee-company.

21. In para No. 2.9 of the petition the transferor-company has submitted that no proceedings under Sections 235 to 251 of the Companies Act, 1956, are pending against it.

22. The circumstances and the reasons which justify and/or necessitated the said scheme of amalgamation, have been stated in para No. 3 of the petition.

23. The terms of amalgamation of transferor-company with the transferee-company have been set out in the enclosed scheme of amalgamation and stated in para No. 4 of the petition.

24. In para No. 10 of the petition it is stated that none of the Directors of the transferor-company and of the transferee-company have any material interest in the said scheme of amalgamation except as shareholders in general, the extent of which will appear from the Registrar of Directors' Shareholding maintained by the transferor-company and the transferee-company.

25. The object of the petition is ultimately to obtain sanction of this court to the scheme of amalgamation proposed to be made between the transferor-company and the transferee-company whereunder it is proposed to merge the transferor-company into the transferee-company without the process of winding-up. The terms and conditions and consideration of the above scheme are fully stated in the scheme of amalgamation.

26. The sanction of the scheme of amalgamation will be for the benefit of the transferor-company as well as the transferee-company. It is submitted that the scheme of amalgamation will not adversely affect the rights of any creditors of the transferor-company and of the transferee-company in any manner whatsoever.

27. The share exchange ratio for the purpose of implementation of the terms of the Scheme of Amalgamation has been prepared by a reputed firm of Chartered Accountants and has been unanimously accepted by the Board of Directors of both the companies as well the shareholders and the creditors of these companies.

28. That no one will be prejudiced if the proposed Scheme of Amalgamation is sanctioned and the sanction of the said scheme will benefit all and is in the interest of the transferor-company and the transferee-company, their shareholders, creditors, employees and all concerned.

29. Having regard to the averments made in the petition, the fact that Shri U.C. Nahta, the Regional Director, Northern Region, Department of Company Affairs, Ministry of Finance, Kanpur, has not objected the petition, the report of the Official Liquidator and the report of the auditors, I am satisfied that the transferor and transferee-companies have disclosed to the court all the material facts relating to them as required under the proviso to Sub-section (2) of Section 391 of the Act, 1956. The Scheme of Amalgamation of the transferor-company in the transferee-company unanimously approved by the shareholders and secured creditors and all other class of creditors of the transferee-company as well as the shareholders and creditors of the transferor-company. The Central Government, as said earlier, also has no objection to the sanction of this scheme of Amalgamation, I do not find any legal or factual impediment to grant sanction of the scheme of Amalgamation. In these facts and having been satisfied on the basis of the material produced on the record I am of the view that the prayer made in the petition deserves acceptance.

30. In the above facts and circumstances, the sanction of the Scheme of Amalgamation of the transferor-company in the transferee-company is hereby granted under Section 391(2) of the Companies Act, 1956.

The petition accordingly stands disposed of.


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