M/s Dharampal Satyapal Sons Pvt. Ltd vs Registrar Of Companies

P.S.N. Prasad, Member (Judicial)

This application has been filed by the applicant Companies under Sections 230 to 232 of the Companies Act, 2013, read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, and the National Company Law Tribunal Rules, 2016, for the purpose of Demerger (hereinafter referred to as the scheme) for merging its business with M/s DS Intellectual Properties Private Limited (Resulting Company).

The "Demerged Company No.l Applicant Company Number 1, Dharampal Satyapal Sons Private Limited was incorporated under the provisions of companies Act 1956 on 07.01.2004, having its registered office situated at 4828/24, Prahlad Lane, Ansari Road, Darya Ganj, New Delhi- 110002.

The "Resulting Company Applicant Company Number 2, DS Intellectual Properties Private Limited was incorporated under the provisions of companies Act 1956 on 04.03.2020, having its registered office situated at 4828/24, Prahlad Lane, Ansari Road, Darya Ganj, New Delhi- 110002.

A perusal of the petition discloses that initially the First Motion application, seeking dispensation from convening the meetings of Shareholders of the Applicant companies, was filed before this Bench, vide Company Application (CAA) No. 14 (ND)/ 2021 and based on such joint application, moved under Sections 230-232 of the Companies Act, 2013, the meetings of Equity Shareholders of the Applicant Companies and Unsecured Creditors of the Transferee companies, were dispensed with, vide order dated 22.02.2021 passed by this HonT>le Tribunal.

The Applicant Companies were directed to carry out publication in the newspapers. It is seen from the records that the petitioners have filed an Affidavit dated 07.09.2021 affirming compliance and discloses that the applicants have effected publication in 'Financial Express' English edition as well as in 'Jansatta' Hindi edition, both dated 10.08.2021. In addition to the public notice, notices were served on to the Regional Director (Northern Region), Registrar of Companies, NCT of Delhi and Haryana, the Income Tax Department and to the other concerned sectoral regulators.

Pursuant to the notice issued to the Regional Director, RoC, they have filed their report and participated in the proceedings.

The Regional Director has filed its representation dated 23.08.2021, in which it has been stated as below:-

a.  The scheme is silent about the details of the assets and liabilities which are to be transferred from the demerged company to the resulting company on approval of the scheme

b.  Prayed before the tribunal to direct the petitioner companies to make such details of the assets and liabilities to be transferred from the Demerged Company to the Resulting Company as part of the scheme to avoid any future ambiguity.

c.  In Para 14 ofpart-II of the scheme it is stated that:

I. Simultaneous with the issue and allotment of new shares by the Resulting Company to the Shareholders of demerged Company, in accordance with clause Error! Reference source not found. 3 '

II. The matter as found above in the para 14 i.e., Error! Reference Source not found. 3 does not partakes as part of the scheme. It has been clarified orally by the representative of the petitioner companies that these characters are inadvertently included herein while undertaking some spell check through the computer. In view of the above submission, the irrelevant characters as stated above and shown as part of the scheme requires to be deleted.

The Applicant Company, in support of its contention, had filed a rejoinder Affidavit dated 14.09.2021, wherein it submitted that the clause 14 of the Scheme is reproduced hereunder -

"Simultaneous with the issue and allotment of new shares by the Resulting Company to the Shareholders of Demerged Company, in accordance with clause error! Reference source not found. 3 of the Scheme, in books of the Resulting Company, all the existing equity shares issued by the Resulting Company shall stand cancelled, extinguished and annulled, without any further act, instrument or deed, without any payment thereof Such cancellation of share capital of the Resulting Company shall be effected as a part of the Scheme itself and. not in accordance with Section 66 of the Act. The order of NCLT sanctioning the Scheme shall be deemed to be an order under Section 66 of the Act confirming the reduction and no separate sanction under section 66 of the Act shall be necessary"

The said clause inadvertently mentions "Error" reference source not found.3 instead of writing "13". This error has been generated due to non-reading of auto spell and para referencing check command by printer. It is hereby clarified that clause 14 of the Scheme refers to simultaneous reduction of share capital of the demerged Company with issue and allotment of new shares by the resulting company, in accordance of clause 13, i.e., Consideration for the scheme. A copy of the corrected scheme is attached with the rejoinder affidavit and marked as Annexure-A.

The Income Tax Department filed its report dated 22.10.2021 wherein, the office of Deputy Commissioner of Income Tax, issued "No Objection Certificate". However, in order to protect the interest of the Revenue, it is clarified that there shall be no limitation on the power of the Income tax Department for recovery of pending Income Tax dues, including imposition of penalties etc. as provided in law.

In view of the foregoing, upon considering the approval accorded by the members and creditors of the Petitioner Companies to the proposed Scheme and the affidavits filed by the Regional Director, Northern region, and the Income Tax Department, whereby no specific objections have been raised to the proposed Scheme or if raised has been met by filing undertaking, there appears no impediment to grant sanction to the Scheme. However, the Companies shall remain bound by the undertaking filed by either of them. Consequently, sanction is hereby granted under Sections 230-232 of the Companies Act, 2013. The Petitioners shall however remain bound to comply with the statutory requirements in accordance with law.

In view of absence of any other objections having been placed on record before this Tribunal and since all the requisite statutory compliances having been fulfilled, this Tribunal sanctions the Scheme of Arrangement annexed with the Company Petition as well as the prayer made therein.

Notwithstanding the above, if there is any deficiency found or, violation committed qua any enactment, statutory rule or regulation, the sanction granted by this Tribunal will not come in the way of action being taken, albeit, in accordance with law, against the concerned persons, directors and officials of the petitioners.

While approving the Scheme as above, it is clarified that this order should not be construed as an order in any way granting exemption from payment of stamp duty, taxes or any other charges, if any and payment in accordance with law or in respect to any permission/compliance with any other requirement which may be specifically required under any law.

THIS TRIBUNAL DO FURTHER ORDER:

That in terms of the Scheme:

A. All the property, rights and powers of the Demerged Undertaking of the Demerged Company be transferred without further act or deed to the Resulting company and accordingly the same shall pursuant to section 232 of the Act, be transferred to and vest in the Resulting company for all the estate and interest of the Demerged Undertaking of the Demerged Company therein but subject nevertheless to all charges now affecting the same;

B.  All the liabilities and duties of the Demerged Undertaking of the Demerged Company be transferred without further act or deed to the Resulting company and accordingly the same shall pursuant to section 232 of the Act, be transferred to and become the liabilities and duties of the Resulting company;

C.  All proceedings now pending by or against the Demerged Undertaking of the Demerged Company be continued by or against the Resulting company,

D.  All the employees of the Demerged Undertaking of the Demerged Company in service on date immediately preceding the date on which the scheme finally take effect shall become the employees of the Resulting company without any break or interruption in their service;

E. Any person interested shall be at liberty to apply to the Tribunal in the above matter for any directions that may be necessary.

The Petition stands allowed on the above terms.