M/s. Anand Nishikawa Company Limited v. M/s. ALP Plastics Private Limited

Judgment

1. This application has been filed under Section 391 to 394 of the Companies Act, 1956 by the applicant/transferee company seeking directions of this court to dispense with the . . requirement of convening the meetings of its equity shareholders and for convening, holding and conducting of separate meeting of its secured and unsecured creditors to consider and approve, with or without modification, the proposed Scheme of Arrangement between M/s. ALP Plastics Private Limited (hereinafter referred to as the transferor company) and M/s. CA (M) 210/2008 Page No. 1 of 8 Anand Nishikawa Company Limited (hereinafter referred to as the applicant/transferee company).

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

3. The transferor company was incorporated under the Companies Act, 1956 on 24th November, 2004 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.

4. The applicant/transferee company was incorporated under the Companies Act, 1956 on 2"d August, 1996 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi.

5. The authorized share capital of transferor company, as on 3Pt March, 2008, is Rs.2,50,00,000/- divided into 15,00,000 equity shares of Rs.10/- each and 1,00,000 5% non- cumulative, non-redeemable preference shares of Rs.100/- each. The present issued, subscribed and paid up capital of the company is Rs.1,16,00,100/- divided into 1,60,010 equity shares of Rs.10/- each and 1,00,000, 5% non-cumulative, non- redeemable preference shares of"Rs.100/- each. CA (M) 210/2008 Page No. 2 of 8

6. The authorized share capital of the applicant/ transferee company as on 3Pt March, 2008 was Rs. 7,00,00,000/ divided into 70,00,000 equity shares of Rs.lO/- each. The issued, subscribed and paid up capital of the company is Rs.6, 75,00,000/ divided into 67,50,000 equity shares of Rs.lO/- each fully paid up.

7. Copies of Memorandum and Articles of Association of the transferor and transferee companies have been filed on record. The audited balance sheets as on 3Pt March, 2008 of the transferor and the transferee companies along with the report of the auditors have also been placed on record.

8. A copy of the Scheme of Arrangement has been filed on record and the salient features of the Scheme have been incorporated and detailed the application and accompanying affidavit. It is claimed the proposed arrangement would provide consolidation of activities and y' elimination of duplication of efforts generating substantial savings in fixed costs and administrative overheads on account of normal economies of scale. would also result It is further claimed that the merger - improving and utilization of valuable resources in proper fashion, enhancing profit margins. It is also claimed that the proposed arrangement will enable pooling of financial/production, marketing and distribution resources of both CA (M) 210/2008 Page No. 3 of 8 the companies to their best advantage.

9. 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 members of the transferor company holding fully paid-up shares in the following manner:- · "1 (one} fully paid up equity share of Rs.10/- each of ·· the transferee company shall be issued and allotted for every 3 (three} equity shares of Rs.10/- each held in the transferor company."

10. It is claimed by the applicant that no investigation proceedings have been instituted and/or pending against the applicant/transferee company under Sections 235 to 251 of the Companies Act, 1956.

11. The Board of Directors of the transferor and the transferee companies in their separate meetings held on 3Pt August, 2008 and 2nd September, 2008 respectively have unanimously approved the proposed Scheme of Arrangement. A copy of the Resolution passed at each of the meeting of the Board of Directors of the transferor and transferee companies has been placed on record. CA (M) 210/2008 Page No.4 of 8 (

12. The applicant/transferee company 15 shareholders. All the shareholders have given their consent/no objection in writing to the proposed Scheme of Arrangement. Their consents/no objection have been placed on record. In view of the same, the requirement of convening the meeting of the shareholders of the transferee company to consider and, thought fit, approving, with or without modification, the proposed Scheme of Arrangement is dispensed with.

13. The transferee company has 6 secured creditors. The v applicant" company has sought a direction for holding the meeting of its 6 secured creditors to seek their approval to the proposed Scheme of Arrangement. Considering circumstances aforesaid, the meeting of the secured creditors of the transferee COf"Dpany is directed to be held on 14th February, 2009 at 10.30 am at pt Floor, Anbros House, 25/31, East Patel

Nagar, New Delhi-110008. Ms. Rajdeepa Behura, Advocate (Mobile No. 9811533814) is appointed as the Chairperson and Mr. Amit Arora, Delhi High Court {Mobile No.9899797927) appointed as the Alternate Chairperson to conduct the said meeting. The Quorum of the meeting of the secured creditors of the transferee company shall be 2 in number and more than 5% in value in terms of the total secured debt. CA (M) 210/2008 Page No.5 of 8

14. The transferor company has 627 unsecured creditors. The applicant company has sought a direction for holding the meeting of its 627 unsecured creditors to seek their approval to the proposed Scheme of Arrangement. Learned counsel however submits that out of 627 unsecured creditors, only 404 unsecured creditors, representing 99.7%.of debt in value are creditors above Rs.lO,OOO/-. It is, therefore, prayed that the requirement of sending individual notices to unsecured creditors who have credit value of less than Rs.lO,OOO/- be dispensed with. Considering the facts and circumstances aforesaid, the meeting of the unsecured creditors of the transferee company is directed to be held on ·14th February, 2009 at 12.00 noon at pt Floor, Anbros House, 25/31, East· Patel Nagar, New Delhi-110008. Mr. Mayank Goel, Advocate {Mobile No.9810329623) is appointed as the Chairperson and Mr. Anil Koushal, Deputy Registrar, Delhi High Court {Mobile No.9910390949) is appointed as the Alternate Chairperson to conduct the said meeting. The requirement of sending individual notices to unsec;::ured creditors who have credit value of less than Rs.lO,OOO/- is dispensed with. The Quorum of the meeting of the unsecured creditors of the transferee company shall be 50 in number and more than 5% in value in terms of the total unsecured debt. CA (M) 210/2008 Page No. 6 of 8 ·.

15. In case the quorum as noted above for the above 1 meetings is not present at the meetings, then the meetings would be adjourned by half an hour and thereafter the persons present and voting shall be deemed to constitute the quorum. For the purpose of computing the quorum the valid proxies shall also be considered, if the proxy in the prescribed form duly signed by the person entitled to attend and vote at the meetings is filed with the registered office of the applicant company at least 48 hours before the meeting. The Chairpersons and Alternate Chairpersons shall ensure that the proxy registers are _properly maintained. ·Y

16. The Chairpersons and Alternate Chairpersons shall ensure that notices for convening the aforesaid meetings of the secured and unsecured creditors of the transferee company along with copies of the Scheme and statement under Section 393 of the Companies Act, 1956 shall be sent to (i) secured creditors of the transferee company and (ii) unsecured creditors of the transferee company having credit value of more than Rs.10,000/- by UPC at their registered or last known addresses at least 21 days before the date appointed for the meetings, in their presence or in the presence of their authorized representatives. Notice of the meetings shall also be published in the newspaper "Statesman" {English Edition) and "Jansatta" {Hindi Edition) in CA (M) 210/2008 Page No. 7 of 8 terms of the Company (Court) Rules, 1959 at least 21 days before the date appointed for the meetings. f!'

17. The Chairpersons and Alternate Chairpersons will be at liberty to issue suitable direction to the management of the applicant company so that the aforesaid meetings of the transferee company are conducted in a just, free and fair manner.

18. The fee of the Chairpersons for the aforesaid meetings y shall be Rs.45,000/- each and fee of the Alternate Chairpersons shall be Rs.40,000/- each, in addition to meeting their incidental expenses. The Chairpersons will file their reports within two weeks from the date of holding of the above said meetings.

19. The application stands allowed in the aforesaid terms. Dasti December 18, 2008 -~~ MITT~J. CA (M) 210/2008 Page No.8 of 8