Karnataka High Court
Tanishq (India) Limited vs Nil on 2 December, 2011
Author: B.Manohar
Bench: B.Manohar
IN THE HIGH COURT OF KARNATAKA AT BANG ALORE DATED THIS THE 28P DAY OF DECEMBER 201 h . BEFORE THE HON'BLE MR.JUSTICE B MANGLIAR 7 | COP No. S/20)1. | BETWEEN: Yanishg (India) Limited, Having Registered Office at Golden Enclave, Tower "A', Airport Road, we a oe Bangalore-560 017. Ss Petitioner (By Sri Uday Shankar, Adv} AND : Nil 6 ~ ... Respondent This C@Pis- fied under Sections 391 and 394 of the Companies Aet, 1956, praying to sanction the scheme of amdigamation Gf. Tanishq (India) Limited with Titan Industries Limited and their respective shareholders, * Annexure-A "hereto, 80 aS 16 be binding on the petitioner / Transleror Conipany and the Transferee Company and their respective shareholders and creditors and other "persons and that upon the scheme of amalgamation becoriing effective the pelilioner/ Transferor Company be eter winding up proceedings. Aan This conmpany petition is coming on for orders this day. the Court made the iolowing: ~ x 4 * Cd ORD This petition is fled under Sections 391 and S94 'of the Companies Act. 1956, seeking lor sanction of scheme: ol: amalgamation of petitioner/corn pany with: 'Titan Inch (ries | Limited. 2. The petitioner/transferar- comipany . was" originally incorporated under the provisions of othe Companies Act, 1956 as a private company ON, ld, 8.1 Lo 66 winder the name and style of T aus nq (india) Pp Private simati Later on the company was co conve orted, into a 2 public limited company with effect from SH. S 1997 having US registered office at Golden 2 niclave, Tower 2 Airpor' Read. 'Bangalore-560 O17. 3. The oajects of the 'petitioner / company is to carry on oo the "business ol des signing, manufacturing, producing, S plating, assembling fabricating, altering, repatring, buying, selling me, "trading, acquiring, representing manulaciures, 7 storing, > packing. ivansporting, forwarding, distributing, dg iporting and disposing of clocks and watches. as morefy: lly described in the Memorandum and Articles of Associalion, "Copy of which is produced as Annexure-B. hiv ~ SS, ...--_--:. .. . nae ee 4. The authorized capital of the petitioner/company is Rs.3,00,00,000/- (Rupees three Crores only} divided into 30,00 ,000/- [ lakhs} equity shares of Rs. l of cael. The issued, subscribed = and _ paid-up capital : Rs.1.93.13.190/- (One crore ninety thie, lakhs 'inirtee: "e thousand one hundred and, ninety 0 ony) - ae wided was 19,31,319 (Nineteen lakhs thirty one - Hiéusdnd three hundred and nineteen) 'equiiy shares of F Ks. 10/- each fully paid up. The "audited | balance sheet ol of the petitioner- company for: tie, year ending: ; 4.2009 to S1.3.2010, is produced as Atimexuve-C - th e oak, audited d balance sheet of the petitione:-company.. irom _ "4.2010 to 30.9.2010 is produced as Annexure-D.- 5. ¢ The Board of Directors of of the petitioner/Company has - pasved 'resolution at its meeting held on 24.9.2016 S approvirig 'ihe | proposed scheme of amalgamation of the transferor company with the transferee company subject te os the cor nfiema tion of this Court. Clause Hl-fo)15}) of the Memorandum of Association of the transferor company authorizes for amalgamation of the petitioner-Company with any other co mpany. 6. The transferee company was incorporated as Titan Watches Lid. on 26.7.1984 and subsequently char name to Titan Industries Limited on 21.9.1993 under' the: provisions of Companies Act, 1956, the transferee company is situated at No.3, SIPCOT, Industrial Compiex, Hosur --635 126 in Tamil Nadu. The ~ transferee Company is a listed vornpany being listed at The Bombay Stock Exchange.Ltd: and' National Stock Exchange of India Lid. 7, The maim opje ste of the transferee company is to carry on the business: of cesigning, engineering, manufacturing, producing, assembling, ~ fabricating. altering, repairing, buying, -- . selling, _ trading, acquiring, representing £ manufacturers. storing, . sacking, transporting, forwarding, : distributing, importing and disposing of watches, clocks, me, chronumeters,-horologice Linstruments and other devices for measuriig 'ime and components ete... Copy of the ~ Memorandum and Articles of Association of the Transferee Company is produced as Annexure-F. 5. The share capital of Transferee Company as on G1.3.2010 is as under ted Office ot: Ce ea) u The authorized share capital of the transferee company is at present Rs.120,00,00,000/- (Rupees One hundred twenty crore only} divided into 8,00,00,.600 femht crore) equity share of Rs.1O/- (Rupees ter only) cach and, 40,00,000 (forty lakh) redeemable curnulative. preferencs shares of Rs.100/- (Rupees one hundred only) each. ii) The issued, subscribed.and paid up share capital of the transferee company is Rs.44,38,93,080/- (Rupees forty four crores thirty cighi lace ninety three thousand eighty only) divided. injo 4.43 89,308 Your crores forty three lacs eighty nine-theusand three hundréd and eight) equity shares of Rs.10/-4 Rupees ter-orly) each, fully paid up. 9. - ~The audited balance sheet of the Transieree Comipany made afpto 31.38.2010 is produced as Annexure-G. The un- . atidited- balance sheet of the Transferee Company from 14.2010 to 30.9.2010 is produced as Annexure-H. "10, The Board of Directors of the Transferee Company has "passed a resolution al iis meeting held on 27.7.2010 for approving the scheme of amalge Company with the Transierce Company subject to the pee corlirmation of this Court. Clause Hifpj}ii7) of the Pe ee 3 ea 6 Memorandum and Articles of Association of transferee company permits for the amalgamation of the company. ~ Court in CA No.1108/2010 seeking. for dinpensaion of meeting of the shareholders ofthe Petitioner © Company. | Tis © Court by its order dated 8.12. 2010 has alc owed the company application and dispensed the | holding. of meetings of the shareholders of the Petitione: Company and permitted the petitioner-company to. Me this. corpany pelition within a period of ves Piirsus nt 'to "the same. the present compat / petition hae been filed." 12. lt is seen that this.Court by its order dated 31.1.2011 . isstred notice te the Regional Director and Official Liquidator. Poe Further. - (he petitioner was also permitted to takeout advertisernent' of this petition in "The Hindu' and "Kannada Prabha' (Bangalore Edition) daily newspapers on or before 35.2.2011 fixing the date of hearing as 18.3.2011. In pursuance to that, the Petitioner-Company has taken out advertisement in the aforesaid newspapers. A mera to that pe Gas effect has been filed along with the said newspapers. The Official Liquidator as well as the Regional Director Aled their ee UC 2 eae ~d affidavits. The Official Liquidator. on the basis of the report submitted by M/s.Ramraj & Co., Chartered Accountants, who have scrutinized the books of accounts arid records. of the Transferor Company, fled OLR No.258/2011, sabmitting . that the aflairs of the Transieror Compainy do net ¢ pear te have been conducted in the manner prejudicial b the : interests of the members or to the public.and the 'Transferor Company may be ordered to be dissulved. i3. The Regional Dirécitor in his affidavit has observed the following observations: (A) AS: 'stated in para i2 of the petition, straiseferee ce oimpany is not making any peren before the. High Court of Judicature at Madra for sanctionmg of the scheme, keeping in view of the fact of 'he petitioner/transferor company belie fully owned subsidiary company of transferee company. Phe tra unsferee « company is required to file its petition before the Hon'ble High Court of Judicature at Madras in accordance with Rule &4; S3-and 84 of the Companies (Court) Rules, 1959. Jurisdiction of Court is prescribed in Sec. 10 of the Companies Aci, 1956. As per said section, Hon'ble High Court of Judicature at Madras is having the jurisdiction over the transferee company as its registered office is situated in Taxnil Naud and accordingly no Court other than the High Court of Judicature al Madras can decide whether the petition by the ransferee company before that Court be exempted. Hence, the transferee company has to obtain the order of the High Court of Judicature at Madras ordering that no such petition by the transferee company is not ALY" a a a ne required to be Hled before that Court. Besides that there are other consequential actions anc. procedures have to be followed when such petition is filed. Therefore the company will be escaping from scrutiny from jurisdiction of Migh Court of Judicature at Madras as well as such regulatory authorities before whom the subject company is under regulations" Tee (8) tis seen that the provision for Accounting Treatment has not beer.provided in the scheme.. On seeking the c larifieation on the same. the petitioner company clarified ~ that 'fitan fadustries Lid, the transferee company: would be following the "Pooling of Interest Method' as per Accounting Staridard --) 14. it is therefore submitted that petitioner sompany nuay file an undertakin Bg afidavl .cf conypliance -- of Accountiy . - £ Standard- 4 one 'gabriit eat "there are no complaints received: against the transferor company and its directors. "alse further submit that for any stechnical non-compliance of the provisions of the 'Companies Act which may come to the notice of the off iee-at the Regional Director, there shall. be dealt. in accordance with law m due eOuUrse > Except the-above observations, the Registrar of Companies . Kas no objection. ~ 14. "The Petitioner Company filed reply affidavit stating iHal the 'Transferor Company is the subsidiary of the Transferee Company. In view of the law laid down by various Seeger feed High Courts, the Transieree Company nmeec mot ile a company application seeking for amalgamation. He relied upon the folowing Judgements (2O01)1€ pocoed : Su ' Nant oa 2 faa Net! ae ms MPpany Case es BE OS ES e page 16 (Bombay) (MAHAAMBA INVESTMENTS LTD. v/s (DI LIMITED): (2009) 150 Company cases 728 (Kare aii aka) (NOKIA SIEMENS NETWORK INDIA PRIVATIC LMA. A COMPANY INCORPORATED UNDER THI DRC VSI ONS OF. THE COMPANIES ACT v/s NIL). . and, (2006}134_ Company case page 99 (Madras} (BY SANI Cc ONSUMEE ELECT RONICS: . LTD., v/s JAINSONS CORPOR ATION "Lay: Further the petitioner-company undertook to. follow the "Accounting Standard. 14. Under the' terms "of scheme of amalgamation. the petitioner Transtel or Conipany is ordered to be merged with the 'Tyansferee Companys, From the appointed date, all the assets and . liabilities ofthe petitioner-Transieror Company shall stand transferred and vest with the Transferee Company," All contracts entered ito by the Petitioner- 'Transierer Company with outsiders, the transferee company would "become a party and is enforceable against the 'wansfer ne | Company. The workmen of the petitioner transferor company from the appointed date would become the employees of the transferee company on the terms and conditions, which are not less favourable than the terms in the transieror company. The Transferee Company being the £ fe wut fy | ANGE ESE FA ENP companies together use their resources for smooth flow of holding company of the petitioner-company, the question of issuing any shares in the Transferee Company to. the shareholders of the petitioner/company would not. arise, Me z i The Official Liquidator has filed his report.stating that the. allairs of the company are not conduct ad . in the . manner which is prejudicial to the: interest. of its, ie -miber 'or to" public. The Registrar of Companies has 'also filed an afiidavil, Except the obser vations made above, he has no objection for approval of the Scheme ar amalgamation. The petitioner-conpany his also ited AX alfidavit to follow the pattern of accounting noted by the 'Registrar of Companies. in pe rsa ance te "the "advertisement published in the newspaper, "none "of "the shareholders have fled their objections..to the: scheme of amalgamation. The terms of scheme an amaigamation are not contrary or in violation of the prov ision's of lav Lo. Tue abject ol the amalgamation is to see that both the the companies. The merger of two companies would immensely be beneficial in terms of economy of scale and administrative control. Accordingly. | pass the following: ae ORDER
<oeDRANSR ERR as DE The company petition is allowed. The scheme of amalgamation proposed _ by - the pelilioner-company is hereby sanctioned and "it 7 would Be binding on the petitioner-company and. its "shareholders. subject to complying with the observations made bythe Registrar of Companies.
The petitioner-Company. shall stand dissolved without there being any order for winding up... Office is directed to draw up a decree in Form No.42. The petitioner company is directed to file a certified copy of this order before the Registrar of Companies within a period of one month froin ihe date of receipt of a copy of this order.
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