In Re: Placer Mercantile and Investments (P.) Ltd.

M.R. Shah, J.—Company Petition No. 224/2009 has been preferred by the petitioner-Placer Mercantile and Investments Private Ltd. (transferor-company) to sanction the proposed scheme of arrangement in the nature of amalgamation of Placer Mercantile and Investments Private Ltd. (transferor-company) with Gufic Private Ltd. (transferee-company) u/s 391 read with Section 394 of the Companies Act, 1956.

Company Petition No. 225/2009 has been preferred by the petitioner-Gufic Private Ltd. (transferee-company) to sanction the aforesaid proposed scheme of arrangement in the nature of amalgamation of Placer Mercantile and Investments Private Ltd. (transferor-company) with Gufic Private Ltd. (transferee-company) u/s 391 read with Section 394 of the Companies Act, 1956.

Mrs. Soparkar, learned advocate has appeared on behalf of the respective petitioners, the Official Liquidator has appeared in Company Petition No. 224/2009 and Shri Pankaj Champaneri, learned Assistant Solicitor General has appeared on behalf of the Central Government i.e., the Regional Director; Western Region, Ministry of Corporate Affairs, Mumbai.

It has been pointed out that vide order dated 4-9-2009 passed in Company Application No. 351 (pages 47-54) and Company Application No. 352/2009 (pages 51-58) that meetings of the equity shareholders and the unsecured loan creditors of both the Companies were dispensed with in view of the written consent letters placed on record.

It has been further submitted that vide the aforesaid orders, directions were issued for convening the meetings of the unsecured trade creditors of both the companies and the secured creditors of the transferee-company, there being no secured creditors of the transferor-company. It has been pointed out that the said meetings were duly convened on 26-10-2009 and the proposed scheme was unanimously approved at the meeting of the unsecured trade creditors of both the companies. It is also pointed out that the secured creditors of the transferee-company approved the scheme vide consent letters presented at the said meeting. The results of the aforesaid meetings are placed on record vide the respective Chairman''s report and the affidavit dated 3-11-2009.

It is submitted by Mrs. Soparkar, learned advocate appearing on behalf of the respective petitioners that there was an error with respect to the exchange ratio in the scheme and, therefore, additional affidavit has been filed to correct the said error in the proposed scheme of amalgamation, more particularly Clause 9.1 of the Scheme. It is submitted that the consent of the shareholders of the transferor-company as well as the transferee-company has been obtained with respect to such modification and, therefore, it is requested to permit the respective petitioners to amend the proposed scheme of arrangement in the nature of amalgamation, more particularly, Clause 9.1 as requested. The aforesaid would be dealt with hereinafter.

Both these petitions were admitted vide order dated 19-11-2009 and it is reported that public notices for the same have also been duly advertised in the ''Indian Express'' (English Daily), Vadodara edition and ''Sandesh'' (Gujarati Daily), Surat edition dated 4-12-2009 and the publication in the Government gazette was dispensed with. Affidavit dated 14-12-2009 confirms the publication of the notice in the aforesaid newspapers (at page 60). No one has come forward with the objections even after publication of the notices. The same has been further confirmed by the additional affidavit dated 4-3-2010 (at pages 108-109).

It has been submitted that an inadvertent error has been noticed in the scheme as well as in the petition with regard to the exchange ratio and modification of the same has been sought vide additional affidavit dated 23-12-2009 and Civil Application for amendment permitting the respective petitioners to amend the Company Petitions, more particularly, paragraph 8 of Clause 9.1 has been made. It has been submitted that the aforesaid contention is substantiated by the copy of the valuation report as well as the clarificatory consent letters of all the shareholders.

Notices of the petitions have been served upon the Central Government i.e., Regional Director, Western Region, Ministry of Corporate Affairs, Mumbai and Shri Pankaj Champaneri, learned Assistant Solicitor General has appeared for the Regional Director, Western Region, Ministry of Corporate Affairs in both of the petitions. An affidavit dated 22-2-2010 has been filed by Shri Rakesh Chandra, Regional Director, Western Region, Ministry of Corporate Affairs whereby the observation pertains to the said aforesaid error with regard to the exchange ratio. It is submitted that the exchange ratio in Clause 9.1 of the Scheme may be substituted as follows:

Fully paid equity shares of face value of Rs. 1,000 each credited as fully paid-up of the Transferee Company i.e., Gufic Private Ltd., shall be issued and allotted at par against 10,000 equity shares of face value of Rs. 10 each to the shareholders of the Transferor-Company i.e., Placer Mercantile and Investment Private Ltd.

It has been pointed out that the same is with respect to the exchange ratio of the scheme, which is not prejudicial to the interest of the shareholders and public and, therefore, it is requested to pass an appropriate order by sanctioning the Scheme with the above modification with respect to the exchange ratio."

Notice of the petition of the transferor-company has been served upon the Official Liquidator attached to Gujarat High Court and vide report dated 5-3-2010 filed by the Official Liquidator, which has been filed after the report submitted by the Chartered Accountant, who has carried out the investigation, ultimately it has been stated that the affairs of the Company have not been conducted in a manner prejudicial to the interest of its members or the public interest and, therefore, as such, there is no objection to sanction the proposed scheme of amalgamation by the Official Liquidator.

Heard Mrs. Swati Soparkar, learned advocate appearing on behalf of the respective petitioners, Shri P.S. Champaneri, learned Assistant Solicitor General appearing on behalf of the Regional Director, Western Region, Ministry of Corporate Affairs, Mumbai and the Official Liquidator attached to the Court. The Scheme has benefits, which may bring to both the Companies under the scheme of arrangement in the nature of amalgamation of both the Companies. The assets of both the combined units after amalgamation are enough and sufficient to meet with all the liabilities and the proposed amalgamation will not adversely affect the creditors or class of creditors and will enable them to realise their dues in a normal manner. The shareholders and the secured and unsecured creditors of both the Companies have given their consent to the proposed scheme of amalgamation. Despite advertisement of public notice of both the petitions in two daily newspapers having wide circulation, nobody has objected to the proposed scheme of amalgamation of the transferor-company with the transferee-company. The scheme of amalgamation does not appear to be contrary to law and/or public interest. As stated hereinabove, even the Central Government i.e., Regional Director, Western Region, Ministry of Corporate Affairs has no objection if the scheme is sanctioned subject to modification and/or substitution of Clause 9.1 of the scheme as mentioned in the affidavit filed by Shri Rakesh Chandra, Regional Director, Western Region, Ministry of Corporate Affairs. Hence, there does not appear to be any impediment in granting the proposed scheme of amalgamation.

For the reasons stated hereinabove, both the petitions i.e., Company Petition Nos. 224 and 225/2009 are allowed subject to the modification and substitution in the proposed scheme of amalgamation i.e., substituting Clause 9.1 as under:

Fully paid equity shares of face value of Rs. 1,000 each credited as fully paid-up of the Transferee-Company i.e., Gufic Private Ltd., shall be issued and allotted at par against 10,000 equity shares of face value of Rs. 10 each to the shareholders of the Transferor-Company i.e., Placer Mercantile and Investment Private Ltd.

12.1 With the above modification and substitution of Clause 9.1, the proposed scheme of amalgamation is hereby sanctioned. Prayer in terms of paragraph 21(a) is hereby granted in Company Petition No. 224/2009 and prayer in terms of paragraph 23(a) is granted in Company Petition No. 225/2009 subject to the above modification of the proposed scheme of amalgamation i.e., substitution of Clause 9.1 as stated hereinabove.

In view of the above, both the petitions are disposed of with modification of the scheme as stated hereinabove. The cost to be paid to the learned Assistant Solicitor General, Shri P.S. Champaneri is quantified at Rs. 5,000 in each of the petition, which the respective petitioners shall pay directly by an account payee cheque and the cost to be paid to the Official Liquidator is quantified at Rs. 4,000, which is to be paid by Placer Mercantile and Investments Private Ltd. (transferor-company).