In Re: Sunehari Financial Services (P.) Ltd.

S.N. Aggarwal, J.—''M/s. Sunehari Financial Services Pvt. Ltd.'' (hereinafter to be referred as the ''transferor-company'') and ''M/s. Sunehari Exports Ltd.'' (hereinafter to be referred as the ''transferee-company'') have jointly filed this petition under Sections 391(2) and 394 of the Companies Act, 1956 seeking sanction of the proposed scheme of amalgamation for amalgamation of the transferor-company with the transferee-company.

The proposed scheme of amalgamation has been filed along with the present petition and the same has been perused by this Court.

The transferor company was incorporated under the Companies Act, 1956 as a Public Limited Company vide Certificate of Incorporation No. 55-61985, dated 6-10-1984 issued by the Registrar of Companies, Delhi and Haryana at New Delhi. Later on the transferor-company was converted into a Private Limited Company and its name was changed to ''Sunehari Financial Services Pvt. Ltd.'' vide fresh certificate of incorporation dated 12-1-2004 issued by the Registrar of Companies, Delhi and Haryana at New Delhi. The transferor-company is engaged in the business of trading in gold and other commodities, real estate investments and other related activities.

The authorized share capital of the transferor-company is Rs. 2,00,00,000 divided into 20,00,000 equity shares of Rs. 10 each out of which issued, subscribed and paid-up capital of the said company is stated to be Rs. 1,96,44,600 divided into 19,64,460 equity shares of Rs. 10 each.

The transferee-company ''M/s. Sunehari Exports Ltd.'' was originally incorporated under the provisions of the Companies Act, 1956 as Private Limited Company under the name and style of ''M/s. Sunehari Exports Pvt. Ltd.'' vide certificate of incorporation No. 55-42302, dated 6-12-1990 issued by the Registrar of Companies, Delhi and Haryana at New Delhi. The name of the company was changed to its present name ''M/s. Sunehari Exports Ltd.'' and a fresh certificate of incorporation was issued by the Registrar of Companies on 28-5-1992.

The registered office of the transferor-company as well as that of the transferee-company are situated at Delhi, within the territorial jurisdiction of this Court.

The transferor-company and the transferee-company had earlier filed a Company Application being Co. A. (M) No. 177/2007 which was allowed vide order passed by this Court on 17-12-2007. This Court vide its order passed on 17-12-2007 had dispensed with the requirement of convening and holding of meetings of the equity shareholders and the unsecured creditors of the transferor-company. However, the Court directed for convening of separate meetings of the secured creditors, unsecured creditors and equity shareholders of the transferee-company under the supervision of court appointed Chairman/alternate Chairman to consider and approve the proposed scheme of amalgamation. In compliance with the said order of this Court, separate meetings of the secured creditors, unsecured creditors and equity shareholders of the transferee-company were duly convened and held on 4-2-2008 under the supervision of the court appointed Chairman and the Alternate Chairman. The scheme of amalgamation was unanimously approved and adopted in each of the meeting. Voting pattern of the meetings is given below:

[Not Reproduced]

After the present petition was filed, this Court vide its order passed on 15-2-2008 had directed issuance of notices of the present petition to the Official Liquidator and also to the Regional Director (Northern Region). Citation of the present petition was got published in ''Financial Express'' (English Edition) and ''Jansatta'' (Hindi Edition) both dated 27-3-2008. The copies of the newspapers'' clipping showing publication of the citation and the proof of service of notices on the Official Liquidator and the Regional Director (Northern Region) have been placed on record.

Pursuant to the service of notices, a report dated 3-5-2008 has been filed by the Official Liquidator. The Official Liquidator has stated in his report that he has not received any complaint against the proposed scheme of amalgamation from any person/party interested in the scheme in any manner. He has further stated in his report that in his view the affairs of the transferor-company do not appear to have been conducted in the manner which is prejudicial to the interest of its members, creditors or public interest as enshrined in the second proviso to Section 394(1) of the Companies Act, 1956.

Pursuant to the service of notice on the Regional Director (Northern Region), he too has filed his report in the form of his affidavit sworn on 2-5-2008 at Noida. In Para 4.1 of the affidavit filed by the Regional Director (Northern Region), he has stated that the transferee-company viz. M/s. Sunehari Exports Ltd. may be directed to comply with the listing agreement and SEBI guidelines in this regard. This objection taken by the Regional Director (Northern Region) has been dealt with in para 10(e) of the proposed scheme of amalgamation, which reads as follows:

The transferor-company is presently listed on the OTC Exchange of India (OTCEI). In terms of the provisions of the Securities and Exchange Board of India (Disclosures and Investors Protection) Guidelines, 2000, and other applicable provisions, if any, post merger equity share capital of the transferee company will be listed on OTCEI. The transferee company will make necessary application(s) for this purpose and comply with the Listing Agreement and SEBI guidelines in this regard?

A reading of the above would show that the transferee-company has taken upon itself to comply with the listing agreement and SEBI guidelines, on approval of the scheme of amalgamation. This adequately satisfies the objection taken by the Regional Director (Northern Region) in para 4.1 of his report. Mr. R.D. Kashyap, Dy. Registrar of Companies, appearing as representative of the Regional Director (Northern Region) has submitted on instructions that he has no objection to the sanction of the proposed scheme of amalgamation.

During arguments, Ms. Manisha Tyagi appearing on behalf of the Official Liquidator has also submitted that she has no objection in case the proposed scheme of amalgamation, which provide for amalgamation of the transferor-company with the transferee-company, is approved by this Court.

Para 7 of the proposed scheme of amalgamation contains a provision for protecting the employees of the transferor-company on its roll by providing that all the employees of the transferor-company on its roll on the effective date would become the employees of the transferee-company with all benefits including benefit of continuity of service on same terms applicable to them on such date. This Court is of the opinion that no prejudice is likely to be caused to the employees of the transferor-company by approving the proposed scheme of amalgamation which provide for amalgamation of the transferor-company with the transferee-company.

Para 11(a) of the proposed scheme of amalgamation deals with the accounting upon the amalgamation scheme becoming effective. It provides that the amalgamation of the transferor-company with the transferee-company shall be accounted for under the ''Pooling of interest'' method in accordance with Accounting Standard (AS) 14 prescribed under the Companies (Accounting Standard) Rules, 2006.

The share exchange ratio between the members of the transferor-company and the transferee-company is stated to have been fixed at a fair and reasonable basis on the basis of the valuation report of the Chartered Accountant, according to which four fully paid up shares of Rs. 10 each in the transferee-company shall be issued against five equity shares of Rs. 10 each held in the transferor-company.

The scheme of amalgamation is aimed at to consolidate the transferor-company and the transferee-company into one large company with a strong assets base and the same would enable pooling of physical, financial and human resources of these companies for the most beneficial utilization of these factors in the combined entity. The arrangement mentioned in the proposed scheme of amalgamation will unlock the operational efficiencies and derive synergies in the combined business. The amalgamation of the transferor company with the transferee-company would further create economies in administrative and managerial costs by consolidating operations and is likely to reduce substantial duplication of administrative responsibility and multiplicity of records and legal and regulatory compliances and thereby provide effective management and unified control of operations The scheme of amalgamation also provides that on approval of the said scheme and its becoming effective, the transferor-company shall stand dissolved without winding up.

In view of the above and having regard to the facts and circumstances of the case there does not appear to be any legal impediment in sanctioning the proposed scheme of amalgamation. Consequently, sanction is hereby granted to the proposed scheme of amalgamation under Sections 391 and 394 of the Companies Act, 1956 for amalgamation of the transferor-company with the transferee-company. The certified copy of this order shall be filed with the Registrar of Companies within five weeks. It is clarified that this order should not be construed as an order granting exemption from payment of stamp duty if payable in accordance with law in regard to increase in the share capital of the transferee-company. Upon sanction becoming effective and from the appointed date, the transferor Company shall stand dissolved without its formal winding up.

The transferee-company is directed to deposit Rs. 20,000 towards costs in the Common Pool Fund of the Official Liquidator within a period of three weeks from today.

In view of the above, this petition stands disposed of.