Mr. Sumeet Goel v. D.P. Ojha

Judgment

1. This Second Motion Petition has been filed under Sections 391 to 394 of the Companies Act, 1956 (hereinafter referred to as “the Act”) for sanction of the Scheme of Arrangement for reduction of share capital, creation and utilization of Business Reconstruction Reserve Account (in short, “the Scheme”) between VXL Technologies Limited (petitioner- company) and its shareholders.

2. The petitioner Company was incorporated on 28.12.1966 as a private company limited by shares under the provisions of the Act under the name and style of “Eastern Electronics (Delhi) Private Limited” in the NCT of Delhi. Thereafter, the Company was converted into a deemed Public Limited Company and the name was also changed to “Unitorn Limited.” From 7.12.1993, the name was again changed to “VXL Engineers Limited” CP No.115 of 2011 2 and the Company obtained fresh certification of incorporation. Further with effect from 16.7.2001, the name was changed to VXL Technologies Limited and it obtained fresh certificate of incorporation. On 24.7.2003, the Company changed its registered office from NCT of Delhi to the State of Haryana. Its registered office is at 20/3, Mathura Road, Faridabad 121006. The objects of the company are detailed in Memorandum and Articles of Association annexed as Annexure P.2. The authorized share capital of the company is Rs.35,00,00,000/- divided into 3,50,00,000 Equity shares of Rs.10/- each. The issued, subscribed and paid up share capital is Rs.20,00,00,000/- divided into 2,00,00,000 equity shares of Rs.10/- each all fully paid up.

3. The Board of Directors of the Company considered the scheme of arrangement and adopted the same by resolution Annexure P.4 dated

31.3.2011.

First Motion Petition being CP No.77 of 2011 was filed in this Court and vide order dated 1.6.2011, this Court directed that a meeting of the Equity Shareholders of the petitioner company be convened and held for the purpose of considering and if thought fit, approving with or with modification, the proposed scheme of arrangement. It was further directed that Mr. Salil Sagar, Senior Advocate should act as Chairperson of the said meeting of the equity shareholders of the petitioner-company. It was further directed that as the creditors were not part of the Scheme and not likely to be prejudiced in any manner, there was no requirement for holding of meeting of the creditors. Accordingly, it was resolved in the meeting of the equity shareholders to approve the scheme. Thereupon, the Second Motion Petition has been filed. CP No.115 of 2011 3

5. On presentation, notice of this petition was issued to the Official Liquidator and Regional Director, Ministry of Corporate Affairs, Noida. Notice was also directed to be published in Indian Express (English), Dainik Bhaskar (Vernacular) and the Official Gazette of Government of Haryana. Affidavit of publication has been filed by the counsel for the petitioner company alongwith the copies of the newspaper cuttings and official gazette.

6. Reports of the Regional Director and of the Official Liquidator have been filed. A perusal of the same shows that similar objection has been raised in both the reports which is to the following effect:- “It is submitted that the Memorandum of Association of a company can be changed/altered only after following the procedure prescribed under the relevant provisions of the Companies Act, 1956. It is, therefore, submitted that this aspect may kindly be considered by this Hon’ble Court and petitioner company may be asked to follow the procedure prescribed under the relevant provisions of the Companies Act, 1956 for change/alteration in Memorandum of Association.”

7. Learned counsel for the petitioner has filed an affidavit of Mr. Ratan Agarwal s/o late Shri N.M.Agarwal, Vice President (Finance & Accounts), VXL Technologies Limited 20/3, Mathura Road, Faridabad dated 25.11.2011 stating that no objection has been raised by the Official Liquidator and also the Regional Director with regard to the scheme. However, it has been stated that memorandum of association of the company can be changed/altered only after following the procedure prescribed. It has been undertaken in the affidavit that all due procedure shall be followed in accordance with law before changing/altering the CP No.115 of 2011 4 memorandum of association of the petitioner company. Para 1 of this affidavit reads as under:- “1. That the Official Liquidator as also the Regional Director, Northern Region, Ministry of Corporate Affairs have not raised any objection to the Scheme of the petitioner-company but have only submitted that the Memorandum of Association of the company can be changed/altered only after following the procedure prescribed under the provisions of Companies Act, 1956. In this regard, it is humbly submitted and undertaken by the petitioner company that all due procedures shall be followed in accordance with law including the Companies Act, 1956 before changing/altering the Memorandum of Association of the petitioner-company. It is also submitted that the petitioner-company undertakes to abide by all such terms and conditions that may be imposed upon it by this Hon’ble Court while allowing the company petition filed by the petitioner- company.” Thus, there is no substance in the objection raised by Official Liquidator and the Regional Director.

8. According to the learned counsel for the petitioner, all the formalities and legal requirement under the Act have been complied with. It is stated that no proceedings under Sections 235 to 251 of the Act are pending against the petitioner company.

9. After hearing learned counsel for the petitioner-company and the official liquidator and perusing the record, it is noticed that the Official Liquidator and the Regional Director have not raised any specific legal requirement which has not been followed by the petitioner-company. Further, as submitted by learned counsel for the petitioner- company, all CP No.115 of 2011 5 relevant provisions of the Act have been adhered to which are required for the scheme of arrangement. In the opinion of this Court, the scheme will be in the interest of the company and its shareholders. The scheme is also not against public interest and is fair, reasonable and practical. No person has objected to the sanction of the scheme of arrangement after notice was published in the newspapers and official Gazette of the Haryana Government.

10. I, accordingly, sanction the scheme of arrangement. The scheme shall come into operation from the effective date on completion of necessary formalities.

11. A notice of this order be published in Indian Express (English), Dainik Bhaskar (Vernacular) and the Official Gazette of Government of Haryana within 30 days of receipt of certified copy thereof. Any person interested shall be at liberty to approach this Court in the above matter for any directions that may be necessary.

12. Let formal order of sanction be drawn in accordance with law and the certified copy of the same shall be filed with the Registrar of Companies within 30 days of its receipt.

13. Petition stands disposed of accordingly. December 15, 2011 ‘gs’ (Ajay Kumar Mittal) Judge