Precision Interconnect India Pvt. Ltd. vs Nil

N. Kumar, J.—These two petitions are taken up together for consideration and ore disposed of by a common order, as the scheme of amalgamation which is proposed and approved in both these petitions are one and the same.

The petitioner in Company rotation No. 57/2006 Precision Interconnect India Private Limited (for short hereinafter referred to as the transferor company) waft incorporated on 15.2.2000 in the State of Karnataka under the provisions of the Companies Act, 1956 (for short hereinafter referred to as the ''Act''). Its registered office is situated at ''TE Park'', 22B, Doddanakundi, 2nd Phase, Industrial Area, White field Road, Bangalore-560018. The authorised share capital of the transferor company is Rs. 21,00,00,000/- (Rupees twenty one crores only) consisting of 2,10,00,000 (Two crores ten lakhs) equity snares of Rs. 10/- each. The issued, subscribed and paid up share capital of the transferor company is Rs. 19,94,03,250/- (Rupees nineteen cranes ninety four lakhs three thousand two hundred fifty only) consisting of 1,99,40,325 (one crore ninety nine lakhs forty thousand three hundred twenty five only) equity shares of Rs. 10/- each. The said company was incorporated to engage in the design, production, manufacture, purchase, sale and to perform other functions which are dearly set out in the articles of memorandum of association which is produced as Annexure-B to the petition. The latest audited balance sheet as on 31st March 2005 shows the assets and liabilities of the company. The entire shares of the transferor company held by Tyco Ask Investments Ltd., Mauritius which along with its nominee Tyco Group S.A.R.L., Luxembourg, holds the entire issued, subscribed and paid up share capital. The Board of Directors of the transferor company have approved and adopted a scheme of amalgamation at its meeting held on 29.12.2005 by virtue of which the transferor company is proposed to be merged with the transferee company i.e., Tyco Electronics Systems India Pvt. Ltd., which is also held by the same holding company. As on today the said holding company is now called by the name Tyco Electronics torn Investment Ltd. Thereafter the transferor company filed an application before this court u/s 391 of the Act seeking permission of the court to convene a meeting of the shareholders and unsecured creditors in Co.R. No. 43/2006. Accordingly on 20.02.2006 permission Bought for we granted. In pursuance of the said permission, the meeting of the shareholders and unsecured creditors was held on 03.04.2006 in its registered office. The majority of the shareholders and unsecured creditors in the said meeting approved the scheme. The Chairman of the meeting filed his report to the court. Thereafter the transferor company has filed this petition on 22.04 2006 seeking approval of the scheme by this court On 31.5.2006, this court directed notice to the Regional Director of Company Affairs and also to the Official Liquidator as well as advertisement was ordered in the Hindu and Kannada Prabha newspapers.

The Registrar of the companies has submitted his report objecting to the word ''Authorised share capital'' in the scheme of amalgamation. Now in answer to the objections, the company has filed an affidavit agreeing to delete the word ''authorised share capital'', used in the scheme of amalgamation. In so far as Official Liquidator in concerned, he has no objection for according sanction to the scheme. The matter is listed today before the court for hearing. No one has appeared before the court to object to the aforesaid scheme.

The petitioner in W.P. No. 56/2006 Tyco Electronics Systems India Pvt. Ltd., (for short hereinafter referred to as the Transferee company) was originally incorporated on 26.04.1995 under the name and style of Dulmison W.S. Power Systems Ltd., in the State of Tamil Nadu. It became a deemed pubic company and also changed its name to Tyco Electrodes Systems India Limited with effect from 29.01.2001. Subsequently, the name was again changed to Tyco Electronic Systems India Private Limited with effect from 29.05.2001. Hour it is known as Tyco Electronics Systems India Pvt. Ltd. Therefore they have decided to shift the registered office from tits State of Tamil Nadu to the State of Karnataka and is at present having registered office at "TE Park", 22B, Doddenakudni, 2nd phase. Industrial Area, Whitefield road, Bangalore-560048. The authorised share capital of the transferee company is 18 crores consisting of Rs. 1 crore eighty lakhs equity shares of Rs. 10/- each. The issued, subscribed and paid up capital in Rs. 17,79,36,020 (Rupees seven crores seventy nine lakhs thirty six thousand and twenty only) divided into 1,77,93,602 equity shares of Rs. 10/- each fully paid up. The main object of the Transferee company is to design, assemble, manufacture, teat, distribute, buy, sell deal in export, import and other activities as set out in the articles of memorandum of association which is produced as Annexure-B to the petition. The Transferee company has produced the latest balance sheet upto 31.03.2005 disclosing the assets and liabilities as per Annexure-C. The Board of Directors of the transferee company has proved and adopted the scheme of amalgamation in the meeting held on 29th December 2005, by virtue of which the above said transferor company is merged with the transferee company subject to confirmation of this court The transferee company is a subsidiary of Tyco Asia Investments limited, Mauritius and the entire shares of the transferee company are held by the said holding company as stated above. The said holding company is called by name Tyco Electronics Asia Investments Ltd.

The Transferee company filed an application before this court in C.A. No. 42/2006 u/s 391 of the Act seeking permission of the court to convene a meeting of the shareholders and the unsecured creditors of the company. Accordingly by order dated 20.02.2005 the said permission sought was grouted and approval was granted to convene the meeting On 03.04.2005, the meeting of the share holders end unsecured creditors was convened and the Chairman has filed his report stating that the scheme of amalgamation has been approved by the majority of the shareholders and unsecured creditors. Notice was issued. It is thereafter the present petition No. 56/2006 is filed by the Transferee company seeking approval of the scheme. Notice was ordered in this petition to the Regional Director of Company Affairs, Chennai, who has filed his statement objecting to the use of the word ''share capital'' in the scheme of amalgamation. In reply to the scheme an affidavit is filed agreeing to delete the said word from the scheme. Notices have been duty published about the hearing of this petition in the Hindu and Kannada Prabha. The Registrar of the company has also filed his report stating that he has no objection. Today when the matter is listed for hearing, no shareholder or creditor of the company or even the workmen has appeared before the court upholding the scheme of amalgamation.

I have heard the learned Counsel fat the companies. I have gone through the scheme. The Transferor and the Transferee company are both companies incorporated in India under the Act and the shares of the respective share capital is held by the shareholders i.e., Tyco Asia Investments Incorporated in Mauritius and its nominee Tyco Group S.A.R.L. Luxembourg which is now called as Tyco Electronics Asia Investments Ltd. Thus, both the transferor and transferee company are wholly owned subsidiaries of the said holding company. On the scheme being effective, all the assets, properties, rights, interests and claims whatsoever of the Transferor company and its entire undertaking shall without further act or deed, pursuant to Section 394(2) of the Act, be transferred to and vest in the Transferee company with effect, from the Transfer date, so as to become the assets, properties, rights, interests and claims of the Transferee company but subject nevertheless to all charged then affecting the same. All the liabilities, debts, obligations fend duties of the Transferee company upto the effective date shall also stand transferred to and vest in the Transferee company with effect from the Transfer date without. On the Scheme taking effect, all the officers and employees of Transferor company shall be deemed to have become she officers and employees of the Transferee compare with effect from the Transfer date and the terms and conditions of service applicable to such officers and employees shall not be less favourable to them than those applicable to them prior to the Transfer date and the service also shall not be treated as having been broken or interrupted for any purpose, the said amalgamation shall not effect any transaction or proceedings already concluded by the Transferor company.

In view of the objections raised by the Registrar of Companies, both the Transferor and the Transferee company have filed an affidavit agreeing to delete the word ''authorised share capital'' in 3rd line of Clause 8, where the definition of undertaking is given. The proposed merger will be for the benefit of both the companies, and it would result in considerable reduction of administration and operational coats and the amalgamated company will be able to benefit from the same resulting in better turnover and profits. There will be operational synergy in terms of procurement benefits, common license reduction of administration work for the amalgamated company and the financial resources, managerial and technical expertise of both the companies would be better utilised by the amalgamated company. The amalgamation will also enable more efficient and economical control and conduct of the companies.

The shareholders, and unsecured creditors of the company have approved thus scheme with requisite majority. The workmen have not opposed the scheme. The material on record do not disclose that the affairs of the company are conducted in a manner detrimental to the interest of the shareholders and creditors of the company. The terms of the scheme do not violate or are contrary to the law which is in force for the time being. There is no legal impediment for granting the approval to the scheme. Hence I pass the following order:

The scheme of (sic) sought for in Annexure-A is hereby sanctioned so as to be binding on the sanctioned shareholders, creditors of both Transferor and Transferee companies with effect from, the approval date, viz., 01.04.2005. All the business, assets and undertakings including the moveable and immovables and other assets of whatsoever nature and all licenses, rights, privileges, claims, etc. of the Transferor company without further act or deed be transferred to and vested in the Transferee company pursuant to Section 394 of the Companies Act. Similarly RB the debts and liabilities, duties and obligations also shall stand transferred to and vested in the Transferee company from the Transfer date. Thus the Transferor company stands dissolved without a formal winding up order. The Transferor company is directed to file a copy of this order within one month from the date of receipt of this order before this Registrar of Companies

Office is directed to draw decree in Form No. 42.