CP-61-2014 :1: IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Company Petition No.61 of 2014 connected with Company Petition No.9 of 2014 Date of Decision : 20.05.2014 IN THE MATTER OF: Section 391 to 394 of Companies Act,1956.
AND IN THE MATTER OF : Scheme of Arrangement(Demerger) between AVON TUBES LIMITED.....Petitioner Company I AND AVON ISPAT & POWER LIMITED ....Petitioner Company II AND AVON ISPAT PRIVATE LIMITED.....Petitioner Company III AND AVON RIMS LIMITED....Petitioner Company IV AND AVERY RALEIGH CYCLES LIMITED...Petitioner Company V CORAM : HON'BLE MR.JUSTICE RAJIV NARAIN RAINA Present : Mr.Deepak Suri and Mr.Sameer Sagar, Advocates, for the Petitioner Companies.
Mr.D.P.Ojha, Official Liquidator.
1.
To be referred to the Reporters or not?.
2.
Whether the judgment should be reported in the Digest?.
RAJIV NARAIN RAINA, J.
In this petition under Section 391 to 394 of the Companies Act, 1956, read with Rule 9 of the Companies (Court) Rules,1956 duly supported by affidavits, the Petitioner Companies seek sanctioning of the Scheme of Arrangement (Annexure P/1) vide which it is proposed to merge the “Business Manufacturing of Steel Tubes and Bicycle Rims”.
division of Petitioner Company I into Petitioner Company II, Kumar Paritosh 2014.05.28 10:37 I attest to the accuracy and integrity of this document CP-61-2014 :2: “Hot Rolled Division (HR Division)”.
division of Petitioner Company II into Petitioner Company III, “Rim Division (RD Chandigarh) division of Petitioner Company II into Petitioner Company IV and “Intellectual Property including all assets, properties, whether movable or immovable, tangible or intangible, including all the brands(s) or trademark(s)”.
division of Petitioner Company II into Petitioner Company V.
2 The registered offices of the Petitioner Companies I to V are situated at GT Road, Dhandari Kalan, Ludhiana.
3 Main objects of the Petitioner Companies I to V are detailed in their respective Memorandum of Articles and Association which are placed on record as Annexures P-3, P-5, P-7, P-9 and P-11, respectively in the FiRs.Motion Petition i.e.Company Petition No.9 of 2014.
4 The Board of Directors of the Petitioner Companies 1 to V have approved the Scheme of Arrangement in their respective meetings held on 06.01.2014, which are also on the record of FiRs.Motion Petition at Annexures P-2 (colly).5 The Authorised Share Capital of the Petitioner Company I is Rs.10,00,000/- (Rupees Ten lakhs) divided into 1,00,000 (One Lakh) equity shares of Rs.10/- (Rupees Ten) each.
The Issued, Subscribed and Paid- Up Share Capital of the said Petitioner Company is Rs.9,94,400/- (Rupees Nine Lakh Ninety Four Thousand and Four Hundred) only divided into 99,440 (Ninety Nine Thousand Four Hundred and Forty only) equity shares of Rs.10/- (Rupees Ten) each fully paid up.
6 The Authorised Share Capital of the Petitioner Company II is Rs.6,00,00,000/- (Rupees Six Crores) divided into 60,00,000 (Sixty Lakhs) Kumar Paritosh 2014.05.28 10:37 I attest to the accuracy and integrity of this document CP-61-2014 :3: equity shares of Rs.10/- (Rupees Ten) each.
The Issued, Subscribed and Paid-Up Share Capital of the said Petitioner Company is Rs.98,58,970/- (Rupees Ninety Eight Lakh Fifty Eight Thousand Nine Hundred and Seventy) only divided into 9,85,897 (Nine lakhs Eighty Five Thousand Eight Hundred and Ninety Seven) equity shares of Rs.10/- (Rupees Ten) each fully paid up.
7 The Authorised Share Capital of the Petitioner Company III is Rs.5,00,000/- (Rupees Five lakhs) divided into 50,000 (Fifty Thousand) equity shares of Rs.10/- (Rupees Ten) each.
The Issued, Subscribed and Paid-Up Share Capital of the said Petitioner Company is Rs.5,00,000/- (Rupees Five lakhs) divided into 50,000 (Fifty Thousand) equity shares of Rs.10/- (Rupees Ten) each fully paid up.
8 The Authorised Share Capital of the Petitioner Company IV is Rs.5,00,000/- (Rupees Five lakhs) divided into 50,000 (Fifty Thousand) equity shares of Rs.10/- (Rupees Ten) each.
The Issued, Subscribed and Paid-Up Share Capital of the said Petitioner Company is Rs.5,00,000/- (Rupees Five lakhs) divided into 50,000 (Fifty Thousand) equity shares of Rs.10/- (Rupees Ten) each fully paid up.
9 The Authorised Share Capital of the Petitioner Company V is Rs.5,00,000/- (Rupees Five lakhs) divided into 50,000 (Fifty Thousand) equity shares of Rs.10/- (Rupees Ten) each.
The Issued, Subscribed and Paid-Up Share Capital of the said Petitioner Company is Rs.5,00,000/- (Rupees Five lakhs) divided into 50,000 (Fifty Thousand) equity shares of Rs.10/- (Rupees Ten) each fully paid up.
10 The Petitioner Companies had earlier approached this Court by way of Company Petition No.9 of 2014 and vide orders dated Kumar Paritosh 2014.05.28 10:37 I attest to the accuracy and integrity of this document CP-61-2014 :4: 04.02.2014 directed to convene/hold the meetings of Equity Shareholders of all the Petitioner Companies, Secured Creditors of the Petitioner Company II and Unsecured Creditors of the Petitioner Companies I & II.
Mr.Sachin Jain, Advocate and Mr.Vibhor Sharma, Advocate were appointed as Chairman and Co-Chairman, respectively, to conduct the meetings of Equity Shareholders of all the Petitioner Companies.
Ms.Geeta Sharma, Advocate and Mr.Sudarshan Lamba, Advocate were appointed as Chairperson and Co-Chairman, respectively to conduct the meeting of the Secured Creditors of Petitioner Company II and the meetings of Unsecured Creditors of the Petitioner Company I & II.
The respective Chairman/Chairperson submitted their report duly supported by their respective affidavit to this Court and the FiRs.Motion Petition was disposed of.
11 Notice of this Second Motion Petition was issued to the Regional Director, Ministry of Corporate AffaiRs.Noida and was also ordered to be published in the daily 'The Indian Express' (English) and 'Punjabi Tribune' both Punjab Editions as well as in the official Gazette of the Government of Punjab.
The aforesaid order has been complied with and an affidavit to this effect has been placed on record.
12 The Official Liquidator has placed on record the report-cum- affidavit dated 13.05.2014 of Mr.Alok Samantarai, Regional Director, Northern Region, Ministry of Corporate AffaiRs.Noida in the Court today.
In para 6 he has pointed that:- "6.
That the Deponent further craves leave to submit that, Registrar of Companies vide his report dated 07.05.2014 has stated that the Authorized Capital of the Resulting Company II, III Kumar Paritosh 2014.05.28 10:37 I attest to the accuracy and integrity of this document CP-61-2014 :5: & IV are not sufficient for allotment of shares to the shareholders of the Resulting Company I."
13.
As regards the objection raised in para 6 of the affidavit dated 13.05.2014 of the Regional Director, Mr.Chetan Pahwa and Mr.Harcharan Singh Pahwa, Directors of the Petitioner Companies vide their respective affidavits dated 19.05.2014 filed in Court have undertaken that Petitioner Company III, Petitioner Company IV and Petitioner Company V shall comply with all the relevant provisions of the Companies Act,2013 and any other applicable provisions of law as required for increasing the Authorised Share Capital of the Petitioner Company III, Petitioner Company IV and Petitioner Company V so as to make it sufficient for allotment of the shares to the shareholders of the Petitioner Company II in accordance with the Scheme of Arrangement and Demerger, in order to implementation of the Scheme after it has been sanctioned by this Court.
14 The above-stated explanation submitted by the Directors of the Petitioner Companies sufficiently meets with the query raised by Regional Director.
15 The Petitioner Companies have confirmed that there are no investigations or proceedings pending against them under Sections 235 and 251 of the Companies Act,1956.
16 For the reasons afore-stated and on consideration of all the relevant facts and the procedural requirements contemplated under Sections 391 to 394 of the Companies Act,1956 and the relevant Rules and on due consideration of the report of Regional Director, Northern Region, Ministry of Corporate Affairs Noida, the Scheme of Arrangement and Kumar Paritosh 2014.05.28 10:37 I attest to the accuracy and integrity of this document CP-61-2014 :6: Demerger is hereby sanctioned and as a result thereto, the assets and liabilities of the Demerged Undertaking I as defined in the Scheme (“Business Manufacturing of Steel Tubes and Bicycle Rims”.) of Petitioner Company I shall stand vested into Petitioner Company II and the assets and liabilities of the Demerged Undertaking II as defined in the Scheme ("Hot Rolled Division (HR Division)”.) of Petitioner Company II shall stand vested into Petitioner Company III, the assets and liabilities of the Demerged Undertaking III as defined in the Scheme ("Rim Division (RD Chandigarh)") of Petitioner Company II shall stand vested into Petitioner Company IV and the assets and liabilities of the Demerged Undertaking IV as defined in the Scheme (“Intellectual Property including all assets, properties, whether movable or immovable, tangible or intangible, including all the brands(s) or trademark(s)”.) of Petitioner Company II shall stand vested into Petitioner Company V.
The Petitioner Companies III, IV & V shall be required to comply with the provisions of the applicable laws for increasing the Authorised Share Capital so as to make it sufficient for allotment of the shares to the shareholders of the Petitioner Company II in accordance with the Scheme of Arrangement and Demerger.
17 The Scheme shall be binding on the Petitioner Companies, their respective ShareholdeRs.Creditors and all concerned.
18 Let formal order of sanction of the Scheme of Arrangement and Demerger be drawn in accordance with law and its certified copy be filed with the Registrar of Companies within 30 days from the date of receipt of such certified copy.
19 A notice of the orders be published in the daily 'Indian Express' Kumar Paritosh 2014.05.28 10:37 I attest to the accuracy and integrity of this document CP-61-2014 :7: (English) and 'Punjabi Tribune' both Punjab Editions and in the official Gazette of the Government of Punjab.
20 Any person interested shall be at liberty to apply to the Court for any direction(s) as per law.
21 Disposed of accordingly.
(RAJIV NARAIN RAINA) JUDGE May 20, 2014 Paritosh Kumar Kumar Paritosh 2014.05.28 10:37 I attest to the accuracy and integrity of this document