Company Application No. 954 of 2008 · High Court · 2010

Order

Both these Company Petitions have been taken out under Sections 391 and 394 of the Companies Act, 1956, r/w. Rule 79 of the Companies (Court) Rules, 1959, seeking sanction of the Scheme of Arrangement among Nuziveedu Seeds Limited (NSL), NSL Seeds Limited, Mandava Holdings Private Limited, NSL Properties Private Limited, NSL SEZ Chennai Private Limited, Ascendant Estates Private Limited. More precisely, C.P.No.77 of 2008 is filed by Ascendant Estates Private Limited (hereinafter referred to as ‘the transferee Company No.5) and C.P.No.78 of 2008 is filed by NSL SEZ Chennai Private Limited (hereinafter referred to as ‘the transferee Company No.4).

2. Under the scheme of arrangement, Seed Undertaking in Nuziveedu Seeds Limited (hereinafter referred to as ‘NSL’) is being demerged from NSL and amalgamated with NSL Seeds Limited (hereinafter referred to as ‘the transferee Company No.1’), the Real Estate and Investment Undertaking in NSL is being demerged from NSL and amalgamated with Mandava Holdings Private Limited (hereinafter referred to as ‘the Transferee Company No.2), the IT Infrastructure Undertaking is being demerged from NSL and amalgamated with NSL Properties Private Limited (hereinafter referred to as ‘the transferee Company No.3’), the Chennai SEZ undertaking is being demerged from NSL and amalgamated with NSL SEZ Chennai Private Limited. The Gurgaon SEZ undertaking is being demerged from NSL and amalgamated with Ascendant Estates Private Limited and the Real Estate undertaking is being demerged from NSL SEZ Chennai Private Limited and amalgamated with Mandava Holdings Private Limited.

3. The transferee Company No.4 was incorporated under the provisions of the Companies Act, 1956. The authorized share capital of the transferee Company No.4 as per the audited balance sheet as on 31.03.2008 is Rs.6,00,00,000/- comprising of 60,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid up share capital was Rs.5,01,00,000/- comprising of 50,10,000 equity shares of Rs.10/- each. The main objects of the transferee company No.4 are: 1) to carry on the business of real estate promoters, to purchase land, to lay out, convert and develop the same as housing plots, commercial plots and industrial plots and sell them outright sale basis or by any mode or method which is convenient and suitable to the Company; 2) to carry on the business of hotels, restaurants, amusement and holiday resorts; and 3) to carry on the business of development and maintain special economic zones and commercial and residential complex, and infrastructure facilities for the above.

4. The transferee Company No.4 proposed a scheme of arrangement by which it seeks to acquire a Special Economic Zone facility situated at Navlur undertaking. There are only shareholders and both the shareholders, of which one is a Company, have given their consent letters followed up by the resolution passed by the company as well, setting out that the scheme of arrangement of demerger has been carefully studied and has been considered as beneficial from the stand point of the interests of the shareholders and that there is nothing, which is likely to cause prejudice to the interest of the shareholders thereby. The meeting of the shareholders and unsecured creditors of the transferee Company No.4 came to be dispensed with as per Order dated 10.09.2008 passed in Company Application No.954 of 2008.

5. The transferee Company No.5 was incorporated under the provisions of the Companies Act, 1956, on 05.12.2005. The authorized share capital of the transferee Company No.5 as per the latest audited balance sheet on 31.03.2008 is Rs.1,00,000/- comprising of 10,000 equity shares of Rs.10/- each. The issued, subscribed and paid up share capital was Rs.1,00,000/- comprising of 10,000 equity shares of Rs.10/- each. The main objects of the transferee Company No.5 are: 1) to carry on the business of real estate, builders, developers, promoters, architects, supervisors, contractors/consultants, dealers and agents for real estate including development of townships and sale of plots; 2) To purchase, sell, develop, take in exchange or in lease, hire or otherwise acquire whether for investment for sale or working in same, any real or personal estate including lands, buildings, houses, easement or interest in or with respect to any property or whatsoever for the purpose of the company in consideration gross sum or rent or partly in one way or partly in other or for any other consideration and to carry on the business of real estate dealers, estate owners, undertaking construction activities and development of housing plots, suites and projects, design, build, operate, own and manage software technology parks, malls entertainment parks, theme parks, integrated townships including construction of apartments, houses, housing colonies and commercial complexes and industrial estates, export processing zones, special economic zones and business zones.

6. The transferee Company No.5 had proposed a scheme of arrangement, by which it seeks to acquire a Special Economic Zone facility situated at Gurgaon in the State of Haryana. There are only two shareholders and both the shareholders, of whom one is a Company, have given their consent letters followed up by the resolution passed by the Company as well, setting out that the scheme of arrangement of demerger has been carefully studied and has been considered as beneficial from the stand point of the interests of the shareholders and that there is nothing, which is likely to cause prejudice to the interests of the shareholders thereby. The meeting of the shareholders and unsecured creditors of the transferee company No.5 came to be dispensed with by this Court as per order dated 10.09.2008 passed in Company Application No.955 of 2008.

7. Notice to the Central Government and Registrar of Companies as well as publication in ‘THE NEW INDIAN EXPRESS’ (English daily newspaper) and ‘ANDHRA BHOOMI’ (Telugu daily newspaper) notifying the date of hearing as 15.12.2008 came to be ordered on

14.10.2008. The petitioners carried out the publication and filed copies of publication as proof of the same.

8. ICICI Bank Limited moved Company Application Nos.338 and 339 of 2009 seeking its impleadment as party respondent in C.P.Nos.77 and 78 of 2008 respectively. The company applications came to be ordered on 12.06.2009. Subsequently, on 06.04.2010, the learned counsel appearing for the ICICI Bank Limited submitted that the claim of the ICICI Bank Limited has been settled by the transferor company and therefore, the ICICI Bank Limited seeks its deletion from the array of the respondents. The request of the learned counsel appearing for the ICICI Bank Limited came to be considered and accordingly, ICICI Bank Limited came to be deleted from the array of the respondents.

9. The Registrar of Companies placed on record a common affidavit. Para.3 of the common affidavit reads as follows: “3. That it is humbly submitted that pursuant to the instructions received from Regional Director, Ministry of Corporate Affairs, Chennai, the following facts are placed for consideration of the

Hon’ble High Court: a) As the transferor company 1, 2, 3 are situated at New Delhi, the scheme is subject to approval of Hon’ble High Court of Delhi also. b) The working details on the valuation of shares of the petitioner companies have not been furnished along with the valuation report. Hence, the reasonableness or otherwise of the exchange ratio can not be commented upon. c) The transferee companies have to comply with the provisions of AS-14 issued by ICAI while preparing the accounts of Demerger units of respective companies. d) The name of the company is wrongly mentioned as ‘Nuziveedu Seeds Limited’ the petitions instead of “Nuziveedu Seeds Private Limited’. The status of the said company has to be suitably corrected in the petitions.”

10. The petitioners in both the petitions filed C.A.Nos.652 and 653 of 2009 seeking permission of the Court to amend the company petitions by correcting the name of Nuziveedu Seeds Private Limited from ‘Nuzineedu Seeds Limited’ to ‘Nuziveedu Seeds Private Limited’. Both the said company applications are being ordered on this day. The petitioners in both the petitions also filed C.A.Nos.289 and 290 of 2010 seeking permission to modify the scheme of arrangement by changing the appointed date defined in Clause 1.1.(b) of the scheme of arrangement from 01.04.2008 to 01.04.2010. The said applications are also being ordered on this day.

11. Heard Sri S.Ravi, learned Senior Counsel appearing for the petitioners and learned Assistant Solicitor General representing the Registrar of Companies appearing for the respondents in both the petitions.

12. From the material on record, the scheme of arrangement appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy. None of the parties concerned have come forward to oppose the scheme. Since, the petitioner Companies have complied with all the requirements, I do not see any impediment for sanctioning the proposed scheme of arrangement subject to the order to be passed by the Delhi High Court on the petitions moved by the transferor company.

13. Accordingly, both the Company Petitions are allowed sanctioning the scheme of arrangement subject to the order to be passed by the Delhi High Court on the petitions moved by the transferor company. The transferee Companies lodge an authenticated copy of this order and the scheme with the concerned Superintendent of Stamps for the purpose of adjudication of stamp duty payable, if any, within 60 days from the date of the order.

14. The petitioners in both the Company Petitions to pay costs of Rs.3,000/- each to the Regional Director, Department of Company Affairs, Southern Region, Chennai and also the Official Liquidator attached to this Court towards costs of this petition. Costs are to be paid within four weeks from today. _____________________ B.SESHASAYANA REDDY, J Date:22nd April, 2010. THE HON’BLE SRI JUSTICE B.SESHASAYANA REDDY Company Petition Nos.77 and 78 of 2010 Dated:22nd April, 2010