IN THE HIGH COURT OF DELHI AT NEW DELHI Order reserved on:23.11.2016 Order delivered on:24.01.2017 CO. APPL. (M) 159/2016 IN THE MATTER OF: SMARTVALUE VENTURES PRIVATE LIMITED …… Applicant/Transferor Company No.1 AND PROSPECTIVE INFRASTRUCTURES PRIVATE LIMITED …... Applicant/Transferor Company No.2 WITH SMART GLOBAL CORPORATE HOLDING PRIVATE LIMITED ……. Applicant/Transferee Company Through: Mr. Saurabh Kaila, Mr. Hemant Sharma & Mr. Palash Agarwal, Advocates for Applicant Companies. CO.APPL.(M) 159/2016 Page 1 of 9 CORAM: HON'BLE MR. JUSTICE SIDDHARTH MRIDUL SIDDHARTH MRIDUL, J.
1. The present application has been filed jointly, under Sections 391 to 394 of the Companies Act, 1956 (hereinafter referred to as ‘the Act’), by SmartValue Ventures Private Limited (hereinafter referred to as ‘Transferor Company No.1’), Prospective Infrastructures Private Limited (hereinafter referred to as ‘Transferor Company No.2’) and Smart Global Corporate Holding Private Limited (hereinafter referred to as ‘Transferee Company’), in connection with the scheme of amalgamation (hereinafter referred to as ‘the Scheme’) of Transferor Company No.1 and Transferor Company No.2 with the Transferee Company.
2. Transferor Company No.1, Transferor Company No.2 and the Transferee Company will hereinafter collectively be referred to as ‘the Applicants’.
3. The registered offices of the Applicants are situated within the National Capital Territory of Delhi and thus, this Court has the necessary jurisdiction to adjudicate the matter.
4. Transferor Company No.1 was originally incorporated under the Act on 16.05.2007 under the name and style of ‘Bharat Holdings Private Limited’ with the Registrar of Companies, Uttar Pradesh & Uttaranchal. Thereafter, the name CO.APPL.(M) 159/2016 Page 2 of 9 of the Company was changed to ‘Spice Investments & Finance Advisors Private Limited’ and a fresh certificate of incorporation was issued by Registrar of Companies, Uttar Pradesh & Uttaranchal on 07.08.2008. Thereafter, the name of the Company was again changed to ‘SmartValue Ventures Private Limited’ and a fresh certificate of incorporation was issued by Registrar of Companies, Uttar Pradesh on 26.06.2013. Thereafter, the registered office of the company was shifted from state of Uttar Pradesh to National Capital Territory of Delhi, for which a fresh Certificate of incorporation was issued by Registrar of Companies, National Capital Territory of Delhi and Haryana on 03.08.2016.
5. Transferor Company No.2 was incorporated under the Act on 07.10.2008 with the Registrar of Companies, NCT of Delhi and Haryana.
6. The Transferee Company was originally incorporated under the Act on 18.06.2001 under the name and style of ‘Indian Televentures Private Limited’ with the Registrar of Companies, National Capital Territory of Delhi and Haryana. Thereafter, name of the Company was changed to ‘Spice Global Investments Private Limited’ and a fresh certificate of incorporation was issued by Registrar of Companies, National Capital Territory of Delhi and Haryana on 16.07.2009. Thereafter, name of the Company was changed to ‘Smart Global Corporate Holding Private Limited’ and a fresh certificate of incorporation was CO.APPL.(M) 159/2016 Page 3 of 9 issued by Registrar of Companies, National Capital Territory of Delhi and Haryana on 08.08.2014.
7. The authorized share capital of Transferor Company No.1 as on 31.03.2016 is Rs.9,00,00,00,000/-, divided into 50,00,00,000 equity shares of Rs.10/- each and 40,000 3% Non-Cumulative Redeemable Optionally Convertible Preference Shares of Rs.1,00,000/- each. The issued, subscribed and paid-up share capital of the company as on 31.03.2016 is Rs.800,01,00,000/-, divided into 40,00,10,000 equity shares of Rs.10/- each, and 40,000 3% Non-Cumulative Redeemable Optionally Convertible Preference Shares of Rs.1,00,000/- each.
8. The authorized share capital of Transferor Company No.2 as on 31.03.2016 is Rs.5,00,000/-, divided into 50,000 equity shares of Rs.10/- each. The issued, subscribed and paid-up share capital of the company as on 31.03.2016, is Rs.1,98,000/-, divided into 19,800 equity shares of Rs.10/- each.
9. The authorized share capital of Transferee Company as on 31.03.2016 is Rs.5,13,00,00,000/-, divided into 51,30,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid-up share capital of the company as on 31.03.2016 is Rs.3,94,11,960/-, divided into 39,41,196 equity shares of Rs.10/- each. CO.APPL.(M) 159/2016 Page 4 of 9 10. Copies of the Memorandum of Association and Articles of Association, the latest audited annual accounts for the year ended 31.03.2016, pertaining to the Applicants, have been placed on record.
11. It has been stated that no proceedings under sections 235 to 251 of the Act (or corresponding provisions of the Companies Act, 2013) are pending against the Applicants as on the date of institution of the present Application.
12. A copy of the Scheme of Amalgamation has been placed on record and salient features of the Scheme have been incorporated in the affidavit in support of the summons for directions under sections 391 to 394 of the Act. It has been stated on behalf of the Applicants that the proposed amalgamation will simplify management; would lead to cost savings resulting from rationalization, standardization and simplification of business processes. It has been further stated that the proposed Scheme would inter alia, lead to improved organizational capability arising from pooling of financial, managerial and technical resources and that Amalgamation would maximize the overall shareholders value by strengthening its core competencies.
13. So far as the share exchange ratio is concerned, the Scheme provides that there will be no issue and allotment of shares by the Transferee Company in consideration of amalgamation of the Transferor Companies with the former due to the following reasons: CO.APPL.(M) 159/2016 Page 5 of 9 The entire share capital of Transferor Company No.1 is held by the Transferee Company; The entire share capital of Transferor Company No.2 is held by Transferor Company No.1; About 16% of the paid up share capital of the Transferee Company is held by Transferor Company No.2; Upon the scheme becoming effective, the investment of Transferor Upon the scheme becoming effective, Company No.1 in Transferor Company No.2 shall stand cancelled; the investment of the Transferee Company in Transferor Company No.1 shall stand cancelled; Upon the scheme becoming effective, the investment of Transferor Company No.2 in the Transferee Company shall stand cancelled.
14. The Board of Directors of the Transferor Company No.1, Transferor Company No.2 and the Transferee Company, in their separate meetings, held on 30.09.2016, 29.09.2016 and 01.10.2016, respectively, have unanimously approved the proposed Scheme. Copies of the Resolutions passed at the meetings of the Board of Directors of the Applicants whereby the scheme has been approved have been filed with the application and the same are on record.
15. The status showing the number of equity shareholders, secured and unsecured creditors of the Applicants along with the consent obtained therefrom, have been set out in the following table: CO.APPL.(M) 159/2016 Page 6 of 9 Company Transferor Company No.1 Transferor Company No.2 Transferee Company No.of Equity Share- holders Consent Given No.Preference Shareholders Consent Given No.of Secured Creditors Consent given Consent given No.of Un- Secured Creditors 2 2 8 ALL1ALL NIL N.A NIL NA ALL NIL N.A. NIL N.A1ALL ALL NIL N.A. NIL N.A NIL N.A16 A prayer has been sought seeking dispensation of the requirement of convening meetings of the shareholders, secured and unsecured creditors of the Applicant Companies.
17. Transferor Company No.1 has 02 equity shareholders and 01 preference shareholder. All the shareholders (equity and preference) have given their written consents/NOCs to the proposed Scheme. The written consents/NOCs have been placed on record. The same have been examined and found in order.
18. In view of the foregoing, the requirement of convening the meetings of equity and preference shareholders of Transferor Company No.1, to consider and if thought fit, approve, with or without modifications, the Scheme, is dispensed with. CO.APPL.(M) 159/2016 Page 7 of 9 19. Transferor Company No.1 does not have any secured or unsecured creditor. Therefore, the question of requirement of convening meetings thereof does not arise.
20. Transferor Company No.2 has 02 equity shareholders. Both the equity shareholders have given their written consents/NOCs to the proposed Scheme. The written consents/NOCs have been placed on record. The same have been examined and found in order.
21. In view of the foregoing, the requirement of convening the meeting of the equity shareholders of Transferor Company No.2, to consider and, if thought fit, approve, with or without modification, the proposed Scheme, is dispensed with.
22. Transferor Company No.2 does not have any secured creditor. Therefore, the question of requirement of convening a meeting thereof does not arise.
23. Transferor Company No.2 has 01 unsecured creditor. The sole unsecured creditor has given its written consent/NOC, to the proposed Scheme. The written consent/NOC has been placed on record. The same has been examined and found in order.
24. In view of the foregoing, the requirement of convening the meeting of the unsecured creditor of Transferor Company No.2, to consider and, if thought fit, approve, with or without modification, the proposed Scheme, is dispensed with. CO.APPL.(M) 159/2016 Page 8 of 9 25. The Transferee Company has 08 equity shareholders. All the equity shareholders have given their written consents/NOCs, to the proposed Scheme. The written consents/NOCs have been placed on record. The same have been examined and found in order.
26. In view of the foregoing, the requirement of convening the meeting of the equity shareholders of the Transferee Company, to consider and, if thought fit, approve, with or without modification, the proposed Scheme, is dispensed with.
27. The Transferee Company does not have any secured or unsecured creditor. Therefore, the question of requirement of convening meetings thereof does not arise.
28. The Application stand allowed in the aforesaid terms and is disposed of accordingly. JANUARY24 2017 sb/mk SIDDHARTH MRIDUL, J CO.APPL.(M) 159/2016 Page 9 of 9