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1993 DIGILAW 421 (DEL)

NAVYUG INVESTMENTS LIMITED v. UNION OF INDIA

1993-08-04

USHA MEHRA

body1993
USHA MEHRA ( 1 ) M/s. Navyug Investments Limited (Transferee. Company) filed a petition under Sections 391 and 394 of the Companies Act, 1956 (hereinafter called the act ), read with Rule 79 of the Companies (Court) Rules 1959 (hereinafter called the Rules) tor obtaining the sanction of this court to compromise and arrangement wherein the petitioner as Transferee Company will amalgamate/merge with it six transferor companies namely Navyug Investments Private Limited, with five other transferor companies namely M/s. Anshu Holdings Private Limited, Chand Holdings Private Limited, Garima Holdings Private Limited, Pawansut Forgings Private. Limited, Gaurav Holdings Private Limited and Rathi Holdings Limited. The registered office of the transferee company as well as that of the transferor companies is situated at 3b and 3a respectively at Vandana, 11, Tolstoy Marg, New Delhi-110001. ( 2 ) THE transferor companies have also filed their respective petitions for the purpose of amalgamation/merger with the transferee company. The same are listed C. P. No. 181 to 186/92 with C. As. 532/92 to 537/92. The transferee and the transferor companies are involved, inter alia, in the business of invest, buy, hypothecate, sell, transfer, deal in and dispose of any shares, stocks, debentures, securities, properties of any other company etc. It is also the function of the transferee as well as transferor companies to act as brokers, underwriters and to give any guarantee for the payment of money or the performance of any obligation or underwriting. However, because of the limitations associated with the small operations and because of lack of large scale investible funds, transferee company decided to amalgamate/merge with it all the six transferor companies with a view to augment its financial resources which will eventually and in the long run benefit the shareholders of the transferee company as it can then venture into expanding its business activities and consequently the shareholders of the transferor companies will also derive benefit and advantage. It has also been stated that the amalgamation will strengthen the organisational base and will augment the resource base of the transferee company. Both transferee and transferor companies have common promoters and there is over-lapping and duplication in the distribution of directional talents and expertise. Therefore in order to avoid duplication of managerial time and effort, it has been decided to get the transferor companies amalgamate and merge with the transferee company. Both transferee and transferor companies have common promoters and there is over-lapping and duplication in the distribution of directional talents and expertise. Therefore in order to avoid duplication of managerial time and effort, it has been decided to get the transferor companies amalgamate and merge with the transferee company. It will facilitate smoother managerial control and will avoid problems of inter dependence. The amalgamation will result greater cohesiveness and uniformity in the working of the transferor companies. It will improve the corporate image of the company in the market which will eventually benefit the shareholders of the company besides improving the credibility of the company with the financial institutions, banks and general investing public. Keeping in view the overall efficiency of the business operation which will help in achieving economies in administra- tion, technical and commercial spheres and to improve the collection efforts in concentrating on building up of the goodwill. Since the Director of the transferee company, Sh. Rajesh Rathi is common director in all the companies, the transferee company is closely held investment company and the shares are held amongst family members and friends of the promoters of the associated companies. So in a way they can be called sister concerns. The transferee and transferor companies are operating from the same premises and the shareholders of all the companies are family members and friends. ( 3 ) ON 23rd July, 1992, directions were issued for hold ing and convening of the meeting of the shareholders and unsecured creditors on 5th June, 1992at the registered office of the companies and for issuance of publication in the newspaper statesman and jansata atleast 21 clear days before the meeting. ( 4 ) THE meeting of the shareholders was held on 5th September, 1992 at 3. 45 P. M. and that of the unsecured creditors at 4. 00 P. M. at the registered office of the company. The reports of the respective Chairpersons were filed from the report of the chairpersons it is apparent that the scheme of amalgamation attached with the petition was approved and adopted unanimously at the meeting of the shareholders as well as at the meeting of the unsecured creditors. The scheme was adopted without any modification. The companies i. e. transferors as well as transferee company had stated in the petition for confirmation that they have given consent to the scheme of amalgamation. The scheme was adopted without any modification. The companies i. e. transferors as well as transferee company had stated in the petition for confirmation that they have given consent to the scheme of amalgamation. The notice on these petitions for confirmation was issued to the Central Government, as well as the Official Liquidator, and the citation, in accordance with the rules had been published in the newspaper in which it was published earlier. The Central Government as well as the Official Liquidator have filed their reports. ( 5 ) THE Central Government has filed the affidavit of Shri R. C. Nigam, Regional Director, Northern Region, Department of Company Affairs, inter alia stating that the Central Government has no representation to make in this matter and that the affairs of the companies do not appear to have been conducted in a manner prejudicial to the interest of its members or public interest. Mr. C. D. Paik, Official Liquidator, in his report has, inter alia, stated that the meeting of the shareholders was held on 5th September, 1992, wherein coram was present as fixed by the Court. The scheme of amalgamation was adopted unanimously by the shareholders and unsecured creditors without any modification. It has been further stated that the proposed amalgamation will be beneficial to the transferors and transferee companies. As per the Board s Resolution dated 13. 7. 92 the transferee company, (petitioner herein) has increased its authorised capital. Further on scrutiny of statutory registers, books of accounts and minutes books and other records, he came to the conclusion that the affairs of all the six transferor companies have not been conducted in a manner prejudicial to the interest of their creditors or shareholders and that all the six companies can be dissolved without the process of winding up. ( 6 ) THE Scheme of amalgamation has been approved by shareholders, creditors and unsecured creditors of the transferee as well as transferor companies unanimously. This court had exempted to hold the meeting of creditors in respect of M/s Rathi Holdings Limited and in respect of first and second transferor companies namely M/s Anshu Holding Private Limited and M/s Chand Holding Private Limited respectively. The rest of the secured creditors and unsecured creditors have granted their approval. ( 7 ) I have gone through the scheme. The Memorandum and Article of Association of these companies provide for amalgamation. The rest of the secured creditors and unsecured creditors have granted their approval. ( 7 ) I have gone through the scheme. The Memorandum and Article of Association of these companies provide for amalgamation. The scheme envisages the transfer and resting of all the rights and claims of transferor companies to the transferee company and likewise of debts, liabilities, dues and obligations have been taken over by the transferee company. The scheme also envisages taking over of the employees of the transferor companies together with benefit of service of all employees of the transferor companies on terms not less favourable to them. 1 am, therefore, of the opinion that the scheme Annexure-B to the petition would be beneficial to the interest of the members of the companies and their creditors. As noticed above, the Central Government has not filed any objection to the scheme. The Official Liquidator has stated that the transferor companies may be dissolved without winding up and the affairs of the transferor companies have not been conducted in a manner prejudicial to the interest of shareholders and the creditors. In short no one has come forward to file any objection to the scheme. ( 8 ) THE Scheme of amalgamation Annexure-B to C. P. 187/92 is approved with effect from the appointed date namely 1. 4. 92. The six transferor companies shall stand dissolved without being wound up from the day the copy of this order is filed with the Registrar of Companies within 30 days from the date of this order. It is further directed that the scheme approved shall be binding on all classes of shareholders and creditors. Any person interested shall be at liberty to move to this Court for any direction that may be necessary. The Company Petitions No. 181 to 187 of 1992 are disposed of in terms of the above order. The formal order shall be drawn up by the Registry.