In Re: Dolphin Holdings Private Limited and Ors.

Sudershan Kumar Misra, J.—This joint petition has been filed under Sections 391(1) to 394 read with Section 100 of the Companies Act, 1956 by the petitioner companies seeking sanction of the Scheme of Amalgamation of Dolphin Holdings Private Limited (hereinafter referred to as the transferor company no. 1); Kakade Holdings Private Limited (hereinafter referred to as the transferor company no. 2) and Garud Impex Private Limited (hereinafter referred to as the transferor company no. 3) with Dolphin International Private Limited (hereinafter referred to as the transferee company).

The registered offices of the transferor and transferee companies are situated at New Delhi, within the jurisdiction of this Court.

The transferor company no. 1 was incorporated under the Companies Act, 1956 on 4th March, 1991 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.

The transferor company no. 2 was incorporated under the Companies Act, 1956 on 10th June, 1992 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.

The transferor company no. 3 was incorporated under the Companies Act, 1956 on 1st November, 1989 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.

The transferee company was originally incorporated under the Companies Act, 1956 on 2nd March, 1990 with the Registrar of Companies, NCT of Delhi & Haryana under the name and style of Dolphin Sales Private Limited. The company changed its name to Dolphin International Private Limited and obtained a fresh certificate of incorporation on 8th January, 1991. Thereafter, the word ''Private'' was deleted from the name of the company w.e.f. 28th June, 1992. Subsequently, the company was converted into Public Limited Company w.e.f. 10th August, 2004. The company finally converted into a private limited company and changed its name to Dolphin International Private Limited and obtained a fresh certificate in this regard on 21st February, 2013.

The authorized share capital of the transferor company no. 1, as on 31st March, 2014, was Rs. 7,00,000/- divided into 70,000 equity shares of Rs. 10/- each. The issued, subscribed and paid up capital of the company is Rs. 6,62,000/- divided into 66,200 equity shares of Rs. 10/- each fully paid-up.

The authorized share capital of the transferor company no. 2, as on 31st March, 2014, was Rs. 1,00,00,000/- divided into 10,00,000 equity shares of Rs. 10/- each. The issued, subscribed and paid up capital of the company is Rs. 5,45,200/- divided into 54,520 equity shares of Rs. 10/- each fully paid-up.

The authorized share capital of the transferor company no. 3, as on 31st March, 2014, was Rs. 10,00,000/- divided into 1,00,000 equity shares of Rs. 10/- each. The issued, subscribed and paid up capital of the company is Rs. 5,18,000/- divided into 51,800 equity shares of Rs. 10/- each fully paid-up.

The authorized share capital of the transferee company, as on 31st March, 2014, was Rs. 6,00,00,000/- divided into 60,00,000 equity shares of Rs. 10/- each. The issued, subscribed and paid up capital of the company is Rs. 5,42,43,000/- divided into 54,24,300 equity shares of Rs. 10/- each fully paid-up.

Copies of the Memorandum and Articles of Association of the transferor and transferee companies have been filed on record with the joint application, being CA(M) 1/2015, earlier filed by the petitioners. The audited balance sheets, as on 31st March, 2014, of the transferor and transferee companies, along with the report of the auditors, had also been filed.

A copy of the Scheme of Amalgamation has been placed on record and the salient features of the Scheme have been incorporated and detailed in the petitioner and the accompanying affidavit. It is submitted by the petitioners that the transferee company is a recognized export house and it has been considered appropriate to eliminate multiplicity of companies by merging the transferor companies into the transferee company, so as to be able to work more cohesively, efficiently and effectively as a single unit and thereby bring about overall economy and reduction in costs and at the same time enable the management to give better focus on its core business and improve and enhance its working and operations. It is claimed that the proposed amalgamation would enable pooling of physical, financial and human resources of these companies for their most beneficial utilization in the combined entity which would result in usual economies of a centralized and large company including elimination of duplicate work, reduction in overheads, better and more productive utilization of human and other resources and enhancement of overall business efficiency. It will enable these companies to combine their managerial and operating strength, to build a wider capital and financial base and to promote and secure overall growth of their businesses.

So far as the share exchange ratio is concerned, the Scheme provides that, upon coming into effect of this Scheme, the transferee company shall issue and allot equity shares to the shareholders of the transferor companies in the following ratio:-

"1 (one) equity share of Rs. 10/- each of the transferee company, credited as fully paid up, for every 3 (three) equity shares of Rs. 10/- each held in the transferor company no. 1."

"2 (two) equity shares of Rs. 10/- each of the transferee company, credited as fully paid up, for every 5 (five) equity shares of Rs. 10/- each held in the transferor company no. 2."

"2 (two) equity shares of Rs. 10/- each of the transferee company, credited as fully paid up, for every 5 (five) equity shares of Rs. 10/- each held in the transferor company no. 3."

It has been submitted by the petitioners that no proceedings under Sections 235 to 251 of the Companies Act, 1956 and the Companies Act, 2013 (to the extent application) have been initiated or are pending against the applicant companies.

The Board of Directors of the transferor and transferee companies in their separate meetings held on 2nd June, 2014 have unanimously approved the proposed Scheme of Amalgamation. Copies of the Resolutions passed at the meetings of the Board of Directors of the transferor and transferee companies have been placed on record.

The petitioner companies had earlier filed CA (M) No. 1/2015 seeking directions of this court to dispense with the requirement of convening the meetings of their equity shareholders, secured and unsecured creditors, which are statutorily required for sanction of the Scheme of Amalgamation. Vide order dated 20th January, 2015, this court allowed the application and dispensed with the requirement of convening and holding the meetings of the equity shareholders of the transferor companies and equity shareholders and secured creditors of the transferee company, there being no secured or unsecured creditors of the transferor companies and no unsecured creditors of the transferee company, to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Amalgamation.

The petitioner companies have thereafter filed the present petition seeking sanction of the Scheme of Amalgamation. Vide order dated 3rd February, 2015, notice in the petition was directed to be issued to the Regional Director, Northern Region, and the Official Liquidator. Citations were also directed to be published in ''Business Standard'' (English) and (Hindi) editions. The petitioners have filed an affidavit showing compliance regarding publication of citations in the aforesaid newspapers on 9th March, 2015. Copies of the newspaper clippings containing the publications have been filed along with the said affidavit.

Pursuant to the notices issued, the Official Liquidator sought information from the petitioner companies. Based on the information received, the Official Liquidator has filed a report dated 14th July, 2015 wherein he has stated that he has not received any complaint against the proposed Scheme of Amalgamation from any person/party interested in the Scheme in any manner and that the affairs of the transferor companies do not appear to have been conducted in a manner prejudicial to the interest of their members, creditors or public interest, as per second proviso of Section 394(1) of the Companies Act, 1956.

In response to the notices issued in the petition, Mr. A.K. Chaturvedi, Regional Director, Northern Region, Ministry of Corporate Affairs has filed his report dated 20th July, 2015. Relying on Clause 14.1 of Part-III of the Scheme, he has stated that, upon sanction of the Scheme of Amalgamation, all the employees of the transferor companies shall become the employees of the transferee company without any break or interruption in their services. He has further submitted that in Clause 7.5 of Part-II of the Scheme, it has been stated that the transferee company shall account for amalgamation in accordance with Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006, for the time being in force and/or the converged international Financial Reporting Standards (IFRS) issued by the Institute of Chartered Accountants of India from time to time. He further submitted that in Clause 9 of Part-II of the Scheme, it has been stated that upon this scheme becoming effective, the transferor companies no. 1 to 3 shall stand dissolved without the process of winding up.

No objection has been received to the Scheme of Amalgamation from any other party. The petitioner companies, in the affidavit dated 17th July, 2015 of Mr. K.V. Rao, Director of the transferee company, have submitted that neither the petitioner companies nor their counsel have received any objection pursuant to the citations published in the newspapers on 9th March, 2015.

Considering the approval accorded by the equity shareholders and creditors of the petitioner companies to the proposed Scheme of Amalgamation and the affidavits filed by the Regional Director, Northern Region and the Official Liquidator having not raised any objection to the proposed Scheme of Amalgamation, there appears to be no impediment to the grant of sanction to the Scheme of Amalgamation. Consequently, sanction is hereby granted to the Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956. The petitioner companies will comply with the statutory requirements in accordance with law. Certified copy of this order be filed with the Registrar of Companies within 30 days. It is also clarified that this order will not be construed as an order granting exemption from payment of stamp duty as payable in accordance with law. Upon the sanction becoming effective from the appointed date of Amalgamation, i.e. 1st April, 2014, the transferor companies no. 1 to 3 shall stand dissolved without undergoing the process of winding up.

Learned counsel for the Official Liquidator prays that keeping in view the fact that the matter has involved examination of extensive records and also prioritized hearings, costs of at least Rs. 1,00,000/- should be paid by the petitioners. Learned counsel for the petitioners submits that he has no objection to the prayer being granted. Considering the facts and circumstances of the case, petitioners shall deposit a sum of Rs. 1,00,000/-, by way of costs, with the Common Pool Fund of the Official Liquidator within two weeks.

The petition is allowed in the above terms.