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2015 DAILYLAW 3580 (DEL)

R. C. Sood & Co. Private Limited v. .

2015-07-21

Sudershan Kumar Misra

body2015
JUDGMENT SUDERSHAN KUMAR MISRA, J. 1. This joint application has been filed under Sections 391 to 394 of the Companies Act, 1956 by the applicant companies seeking directions of this court to dispense with the requirement of convening the meetings of their equity shareholders, secured and unsecured creditors to consider and approve, with or without modification, the proposed Scheme of Arrangement between R. C. Sood & Co. Private Limited (hereinafter referred to as the demerged company) and J. R. Sood & Co. Private Limited (hereinafter referred to as the resulting company). 2. The registered offices of the demerged and resulting companies are situated at New Delhi, within the jurisdiction of this Court. 3. The demerged company was originally incorporated under the Indian Companies Act, 1913 on 20th January, 1954 under the name and style of R. C. Sood & Co. Limited. The company changed its name to R.C. Sood & Co. Private Limited and obtained the fresh certificate of incorporation from the Registrar of Companies, NCT of Delhi & Haryana at New Delhi 18th July, 2000. 4. The resulting company was originally incorporated under the Companies Act, 1956 on 30th January, 2006 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi under the name and style of J. R. Sood & Co. Private Limited. The company changed its name to Golden Earth Estates Developers Private Limited. The company again changed its name to J. R. Sood & Co. Private Limited and obtained the fresh certificate of incorporation on 3rd March, 2014. 5. The present authorized share capital of the demerged company is Rs.6,62,00,000/- divided into 34,70,000 equity shares of Rs.10/- each aggregating to Rs.3,47,00,000/-; 1,50,000 equity shares of Rs.10/- each with differential rights aggregating to Rs.15,00,000/-; and 3,00,000 preference shares of Rs.100/- each aggregating to Rs.3,00,00,000/-. The issued, subscribed and paid up capital of the company is Rs.36,63,080/- divided into 2,56,418 equity shares of Rs.10/- each aggregating to Rs.25,64,180/-; 1,09,890 equity shares of Rs.10/- each with differential rights aggregating to Rs.10,98,900/-. 6. The present authorized share capital of the resulting company is Rs.50,00,000/- divided into 4,50,000 equity shares of Rs.10/- each aggregating to Rs.45,00,000/- and 50,000 redeemable preference shares of Rs.10/- each aggregating to Rs.5,00,000/-. The issued, subscribed and paid up capital of the company is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each. 7. 6. The present authorized share capital of the resulting company is Rs.50,00,000/- divided into 4,50,000 equity shares of Rs.10/- each aggregating to Rs.45,00,000/- and 50,000 redeemable preference shares of Rs.10/- each aggregating to Rs.5,00,000/-. The issued, subscribed and paid up capital of the company is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each. 7. Copies of the Memorandum and Articles of Association of the demerged and resulting companies have been filed on record. The audited balance sheets, as on 31st December, 2014, of the demerged and resulting companies have also been filed. 8. A copy of the Scheme of Arrangement has been placed on record and the salient features of the Scheme have been incorporated and detailed in the application and the accompanying affidavits. It is submitted by the applicants that the resulting company is a wholly owned subsidiary of the demerged company and that the Scheme of Arrangement, inter-alia, provides that the Demerged Undertaking of the demerged company shall stand merged into the resulting company. It is claimed that the proposed demerger will provide clear management focus in as much as each company will have a separate management, which can focus on improving shareholder value in each of them. It is further claimed that by the proposed demerger, each company shall be in a position to pursue its own growth strategy through different arrangements adopted by it. 9. So far as the share exchange ratio is concerned, the Scheme provides that, upon coming into effect of this Scheme, the resulting company shall issue and allot equity shares to the shareholders of the demerged company in the following ratio: “01 equity share of Rs.10/- each fully paid up of the resulting company for every 01 fully paid-up equity share of Rs.10/- each held by them in the demerged company.” 10. It has been submitted by the applicants that no proceedings under Sections 235 to 251 of the Companies Act, 1956 or corresponding provisions under the Companies Act, 2013 have been initiated or are pending against the applicant companies. 11. The Board of Directors of the demerged and resulting companies in their separate meetings held on 30th March, 2015 have unanimously approved the proposed Scheme of Arrangement. Copies of the Resolutions passed at the meetings of the Board of Directors of the demerged and resulting companies have been placed on record. 12. 11. The Board of Directors of the demerged and resulting companies in their separate meetings held on 30th March, 2015 have unanimously approved the proposed Scheme of Arrangement. Copies of the Resolutions passed at the meetings of the Board of Directors of the demerged and resulting companies have been placed on record. 12. The demerged company has 05 equity shareholders, 01 secured creditor and 24 unsecured creditors. All the equity shareholders, the only secured creditor and 05 out of 24 unsecured creditors representing 99.76% of the total unsecured debt have given their consents/no objections in writing to the proposed Scheme of Arrangement. Their consents/no objections have been placed on record. They have been examined and found in order. In view thereof, the requirement of convening the meetings of the equity shareholders, secured and unsecured creditors of the demerged company to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Arrangement is dispensed with. 13. The resulting company has 02 equity shareholders & 01 unsecured creditor. Both the equity shareholders and the only unsecured creditor have given their consents/no objections in writing to the proposed Scheme of Arrangement. Their consents/no objections have been placed on record. They have been examined and found in order. In view thereof, the requirement of convening the meetings of the equity shareholders and the unsecured creditor of the resulting company to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Arrangement is dispensed with. 14. The application stands allowed in the aforesaid terms.