1. This is an application filed by the applicant company herein under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 (for brevity ‘The Act’) read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (for brevity ‘The Rules’) in relation to the composite Scheme of Arrangement (for brevity the “Scheme”) between the Go Airlines (India) Limited (Transferor Company), Wadia Reality Private Limited (Transferee Company), Applicant Company and Nowrosjee Wadia & Sons Limited (“NWS”) for (i) demerge the real estate development undertaking of the Transferor Company (i.e. the Demerged Undertaking” has been defined in the ‘Scheme’) into the transferee Company; (ii) the reduction of equity share capital of the transferee Company; (iii) giving an option to Small Shareholders (as defined in clause 1(n) of the Scheme) to exit the transferee Company in terms of the Scheme; and (iv) the reduction of preference share capital of Applicant Company;, the said Scheme is also annexed to the application. The present application has been filed by applicant to seek appropriate directions for, inter alia, dispensing from holding or convening and holding meeting of the shareholders, Secured and Unsecured Creditors of the Applicant Company.
2. Counsel for the applicants took us through the averments made in the application as well as the typed set of documents annexed there with. Learned Counsel represents that the Scheme does not contemplate any corporate debt restructuring exercise as contemplated under Section 230(2) of the Act. It is further represented that an application filed by the applicants are maintainable in view of Rule 3(2) of the Rules and it is also represented that the registered office of all the transferor companies are situated within the territorial jurisdiction of this Tribunal and fall within domain of Registrar of Companies, NCT, New Delhi.
3. The applicant Company was incorporated on 5 August, 1988 under the name and style “Sevakunj Investments & Trading Company Private Limited under the provisions of the Companies Act, 1956, Subsequently the name of the Applicant Company was changed from “Sevakunj Investments & Trading Company Private Limited” to “Go Investments & Trading Private Limited”. A fresh certificate of change of name reflecting the new name was issued by the Registrar of Companies, on 23 November, 2007.
4. It is submitted that the applicant company has 9 equity shareholders, consent letters of whom have been placed on record through an additional affidavit dated 12.04.2017. the Applicant Company has no Secured and Unsecured creditor as on March 2017. In relation to the Equity shareholders the applicant company seeks dispensation from convening and holding their meeting. As there are no Secured and Unsecured creditors in the applicant company hence, question of convening meeting does not arise.
5. In light of the notification of the provisions for Sections 230 to 232 of Companies Act, 2013 and as well as Companies (Compromises, Arrangements and Amalgamation) Rules, 2016 framed thereunder this Tribunal proceeds to entertain the above joint application. Further, the registered office of applicant is situated within New Delhi and subject to the territorial jurisdiction of Registrar of Companies, NCT of Delhi and Haryana as well as that of this Tribunal.
6. We have perused the application and the connected documents/papers filed along with the Scheme of Arrangement contemplated between the Go Airlines (India) Limited (transferor company), Wadia Reality Private Limited (Transferee Company), Applicant Company and Nowrosjee Wadia & Sons Limited (“NWS”).
7. The authorised capital of the applicant company is Rs. 1,100,000,000 divided into 10,000,000 Equity shares of Rs. 1/- each Preference Shares 10,900,000 Preference Shares of Rs. 100/- each. The Issued, Subscribed and Paid-up Capital of the applicant company is Rs. 938,651,020/- divided into 201,020 equity shares of Re. 1/- each Preference Shares 9,384,500 0.01% Non-Convertible Redeemable Non-Cumulative Preference Shares of Rs. 100/- each.
8. That the main objects of the Applicant Company are as follows:
“1. To invest in stock, or to acquire, or hold or sell, or buy or otherwise deal in shares, units, obligation and other securities of any company or other securities issued by any government or any lawful authority.
2. To purchase, sell, import, export and trade in all kinds of merchandise, including medicinal, chemicals pharmaceutical and biological preparations, all types of stationery items, toilet requisites, preserved food items and perfumery articles”
9. The applicant company has filed its Memorandum and Articles of Association as well as the last available audited financial statements as on 31 March 2016.
10. The meeting of Board of Directors of the applicant company was held on 20 March 2017, through which the Board have unanimously passed resolution and approved the proposed Scheme of as contemplated above and copies of resolution have also been placed on record by the company.
11. It is submitted by the applicant that since the reduction is an integral part of the Scheme under Section 230 to 232 and will be made effective pursuant to order(s) of this tribunal sanctioning the Scheme in terms of Section 230 to 232 of the Act, the provisions of Section 66 of the 2013 Act shall not be applicable unless this tribunal holds otherwise. In any event it shall be deemed that the members of applicant company who have approved the Scheme have also resolved and accorded all relevant consents under Section 66 of the Companies Act, 2013 or any other provisions of the Act to the extent the same may be considered applicable and that there will be no need to pass a separate shareholders' resolution as required under Section 66 or otherwise of the Companies Act, 2013.
12. Accounting treatment as prescribed in the Scheme is as follows:
“6.12 Accounting Treatment for the Reduction of Preference Share Capital of Go Investments:
6.12.1 On allotment of the equity shares to Go Investments by the Transferee Company pursuant to the Demerger in terms of Part-III of the Scheme, Go Investments shall record the equity shares in its books of accounts as under:
(i) The equity shares as aforesaid shall be registered at their value based on apportionment of the cost of the original shares of the transferor company held based on the Net Assets of the Demerged undertaking over the total ne tworth of the demerged company in accordance with section 49(2C) of the Income Tax Act, 1961; and
(ii) The carrying amount of equity shares of the Transferor Company in its books of accounts will stand reduced corresponding by the value of equity shares of the Transferee Company recognized in the books of accounts.
6.12.2 Go Investments shall pass the following entry to record discharge of its preference share redemption liability as stated in the clause above.
(i) The preference share redemption liability account will be debited and
(ii) The investment account in respect of equity shares of the Transferee Company will be credited to the extent of the carrying amount of such Equity Shares determined as per Clause 19.8.1 (i) of the Scheme.
(iii) The excess of the amount payable against preference share redemption liability over the carrying amount of the equity shares transferred shall be recorded as gain on transfer of investment. Conversely, the deficit, if any, shall be recorded as loss on transfer of investment.”
13. The companies have submitted that no investigation proceedings are pending against them either under Sections 235 to 251 of the Companies Act, 1956 or any other law.
14. Taking into consideration the application and the documents filed therewith, we propose to issue the following directions with respect to calling, convening and holding of the meetings of the shareholders, Secured and Unsecured Creditors or dispensing with the same as well as issue of notices including paper publication which are as follow:
A. In relation to the Applicant Company:-
(i) With respect to Equity Shareholders, the holding of meeting is dispensed with as there are only nine equity shareholders and their consent letters have been placed on record. (ii) The meeting of Secured Creditors is also dispensed with because there is no Secured Creditor, so requirement of convening meeting of secured creditors does not arise.
(iii) The meeting of Unsecured Creditors is also dispensed with because there is no Unsecured Creditor, so requirement of convening meeting of Unsecured creditors does not arise.
15. The application stands allowed in the aforesaid terms.