IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 27.04.2011 CORAM: THE HONOURABLE MR.JUSTICE VINOD K.SHARMA C.P.No.54 of 2011 M/s.Claro India Limited, a Company incorporated under the Companies Act, 1956 and having its Regd. Office at B-7, SIPCOT Industrial Complex, Gummidipoondi 601 201 - Tamil Nadu Rep. by its Director Mr.R.L.Biyani ... Petitioner/Transferor Company Company Petition filed under sections 391 to 394 of the Companies Act, 1956 to sanction the Scheme of amalgamation. For Petitioners : Mr.A.R.Ramanathan : Mr.V.Kadhirvelu Addl. Central Govt. Standing Counsel ***** O R D E R
The Company Petition, under Sections 391 to 394 of the Companies Act, 1956, has been filed by the petitioner, i.e. transferor company to sanction the scheme of amalgamation between the petitioner company and Kothari Phytochemicals & Industries Limited (transferee company). The petitioner / transferor company was incorporated on 8th May, 1985, under the provisions of the Companies Act, 1956, under the name and style of Claro India Limited in the State of Jammu & Kashmir. Thereafter, it shifted its registered office to the State of Tamil Nadu. The registered office of the petitioner company is at B-7, SIPCOT Industrial Complex, Gummidipoondi 601 201, Tamil Nadu.
2. The authorized share capital of the transferor company is Rs.10,00,00,000/- (Rupees Ten Crores only) divided into 75,00,000 equity shares of Rs.10/- each and 25,00,000 preference share of Rs.10/- each. Whereas issued, subscribed and paid-up capital of transferor company is Rs.4,50,00,000/- (Rupees Four Crores Fifty Lakhs only) divided into 45,00,000 equity shares of Rs.10/- each.
3. The main objects of the petitioner company are set out in the Memorandum and Articles of Association, which is annexed as annexure-1 of the company petition.
4. The Board of Directors of the petitioner company approved and adopted the scheme of amalgamation at their meeting held on 8th January, 2010. In pursuance thereof, the petitioner company is proposed to be amalgamated with Kothari Phytochemicals & Industries Limited, subject to confirmation by this Court and the Hon’ble High Court of Calcutta, within whose jurisdiction, the registered office of the petitioner company and the transferee company is situated. Under the scheme of amalgamation, the entire undertaking of the transferor company would stand transferred to and vested in the transferee company from the appointed dated i.e. 1st April, 2009.
5. The transferee company was incorporated on 10th March, 1897, under the provisions of the Indian Companies Act, 1882, under the name and style of The Kingsley-Golaghat-Assam Tea Company Limited in the State of West Bengal. The name of the transferee company was subsequently changed to Kothari Phytochemicals & Industries Limited, vide registration No.CINL15491WB1897PLC001365 in the State of West Bengal. The registered office of the transferee company is C-4, Gillander House, 8, Netaji Subash Road, Kolkata 700 001.
6. The object of amalgamation of the company will benefit the companies in the following manner:
“a) The facilities available with the companies could be pooled together and the amalgamated company will be better able to utilise the facilities available as one single unit for the benefit of the amalgamated company.
b) By the proposed amalgamation, the operational costs will be considerably reduced and the management will be able to operate and run the amalgamated company as a single unit more effectively and economically resulting in better turnover and profits.
c) The activities of the companies are inter-related.
d) It will make available to the amalgamated company, the benefit of financial resources, managerial, technical and marketing expertise of the companies.
e) The proposed amalgamation would bring in greater economies in operation and will help in reducing expenditure considerably.
f) The proposed amalgamation will be conducive to better and more efficient and economic control and conduct of the business.
g) There will be operational synergy in terms of procurement benefits, common license, reduction of administration work etc. for the amalgamated company.
h) The amalgamated company will have the benefit of the combined reserves, assets, man-power and cash flows of both the companies. The combined resources of the amalgamated company will enhance its capability to face competition in the market place more effectively.
i) With the enhanced capabilities and resources at its disposal, the amalgamated company will have greater flexibility to market and meet consumer needs and compete more effectively.
j) A larger growing company will mean enhanced financial and growth prospects for the people and organizations connected with the company and will be in public interest.”
7. Under the scheme becoming fully effective, the shareholders of the transferor company are to be allotted on a proportionate basis, one equity share of Rs.10/- each of the transferee company credited as fully paid up for every 50 equity shares of Rs.10/- each held by them in the transferor company and the equity shares of the petitioner company held by the transferee company shall stand extinguished and annulled.
8. In the Company Application No.31 of 2011, the petitioner company was directed to convene meeting of the equity shareholders / members at the registered office of the petitioner company at B-7, SIPCOT Industrial Complex, Gummidipoondi on Thursday, the 10th February, 2011 at 3:00 p.m. for the purpose of considering and if thought fit, approving with or without modification the scheme of amalgamation between the petitioner company and the transferee company.
9. The meeting was held on 10th of February, 2011. As per the report of the Chairman, the meeting was attended by 21 equity shareholders of the petitioner company in person or through representatives or by proxies. 21 equity shareholders held 33,69,654 equity shares of Rs.10/- each, amounting to Rs.3,36,96,540/- (Rupees Three Crores Thirty Six Lakhs Ninety Six Thousand Five Hundred and Forty only), constituting 100% of the value of shares, held by members, who attended the meeting in person or through proxy unanimously approved the scheme.
10. In the meeting, the following resolution was passed:
“Resolved that the scheme as embodied in the Scheme of Amalgamation between Claro India Limited and Kothari Phytochemicals & Industries Limited and their respective shareholders, placed before the meeting and initialled by the Chairman of the Meeting for the purpose of identification, be and is hereby approved.
Resolved further that the Board of Directors of the company and any person authorized by the Board of Directors, be and are hereby severally authorized to take all such steps as may be necessary and/or desirable and do all such acts, deeds, things and matters as may be considered necessary to give effect to the aforesaid Scheme of Amalgamation and this resolution and to accept such alternations, modifications and/or conditions, if any, which may be proposed, required or imposed by the Hon’ble High Court of Judicature at Madras and Hon’ble High Court of Judicature at Calcutta while sanctioning the said scheme”
11. The petitioner has also applied for delisting of its shares from Bombay Stock Exchange Limited and Madras Stock Exchange Limited, wherein shares were listed. The Bombay Stock Exchange Limited suspended share of the petitioner company on 3rd June, 2004. Whereas approval is awaited from the Madras Stock Exchange. The shares of the transferee company are listed with Calcutta Stock Exchange, who have issued no objection for the proposed scheme.
12. There is no investigation proceeding pending against the transferor company under Sections 235 to 251 of the Companies Act against the petitioner or transferee companies. Nor any petition under Section 397 or 398 of the Companies Act filed against the petitioner company.
13. Notice of the company petition was served on the Regional Director, Department of Company Affairs, Southern Region and the Registrar of Companies, Chennai. An affidavit has been filed by the Regional Director, Ministry of Corporate Affairs, Chennai on behalf of the Central Government, recording no objection to the scheme of amalgamation except the following:
“4. I further submit that as per Para 11.4, Part II of the scheme, that upon the scheme becoming effective the authorized share capital of the transferor company shall be added to the authorized capital of the transferee company and the filing fee already paid by the Transferor companies on their authorized share capital, shall be deemed to have been so paid by the Transferee Company on the combined authorized share capital. The above proposal is not acceptable and the transferee company is required to comply with the requirements of Section 97 of the Act by filing Form No.5 by remitting the required Registration fees for the increased Authorized Capital.”
14. This objection cannot be sustained, in view of the law, laid down by the Hon’ble Division Bench of this Court, in the case of Regional Director and another vs. Cavin Plastics and Chemicals P.Ltd, reported in (2008) 141 Comp. Cas. 475 (Mad), wherein, this Court held as under:
“Held, dismissing the appeal, that the issue was not whether the fee which was already paid by the transferor company would automatically be transferred to the transferee company. But, what was intended by Section 391 was to reconstitute the company without the company being required to make a number of applications under the Companies Act for various alternations which might be required in its memorandum and the articles of association “subject to filing no objection . As per the provisions of Section 394(e) of the Companies Act, 1956, the Regional Director has filed an affidavit dated 11.03.2011 by stating no objection to the scheme of arrangement.Notice has been umd nnexed with the typeset of papers as Annexure-D, so as to be binding on all the Equity Shareholders of the transferee Company, with effect from 01.12.2010.
15. The report has also been filed by the Official Liquidator, by pointing out that as per the report of the Chartered Accountants, they have not come across any act of misfeasance by the Directors, which would attract the provision of Sections 542 / 543 of the Companies Act, 1956. Nor the affairs of the transferor company have been conducted in a manner prejudicial to the interest of its members or public interest. There is no objection by the Official Liquidator to the scheme and the scheme be beneficial to the company and its members.
16. Consequently, the company petition is conditionally ordered, subject to sanctioning of the scheme of amalgamation by the Hon’ble Calcutta High Court, on the petition filed or to be filed by the transferee company.
17. The remuneration to the Additional Central Government standing Counsel is fixed at Rs.5,000/- to be paid by the petitioner company.
27.04.2011
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Internet: Yes
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VINOD K.SHARMA
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C.P.No.54 of 2011
27.04.2011