BANIHAL HOLDINGS PRIVATE LIMITED Vs. STATE

JUDGEMENT

(1.) THESE are the petitions filed by nine companies for the purpose of obtaining the sanction of this Court to a Composite Scheme of arrangement in the nature of amalgamation of seven companies, being either the group companies or associates viz. Banihal Holdings Private Limited, Kargil Holdings Private Limited, Kulgam Holdings Private Limited, Leh Holdings Private Limited, Uri Holdings Private Limited, Kanak Castor Products Private Limited and Siddhi Vinayak Cement Private Limited with Nirma Limited and Demerger and Transfer of Healthcare Division of Nirma Limited to Aculife Healthcare Private Limited, proposed under section 391 and 394 of the Companies Act, 1956.

(2.) IT has been submitted that out of seven Transferor companies five of them viz. Banihal Holdings Private Limited, Kargil Holdings Private Limited, Kulgam Holdings Private Limited, Leh Holdings Private Limited, Uri Holdings Private Limited are mainly engaged in the activities of investment and finance. All of them are registered as NBFCs under the RBI Act. They are also engaged in agricultural activity mainly of coffee beans production in the state of Karnataka where they have made investments in coffee estates. All of them are profit making companies. Kanak Castor Products Private Limited, the sixth Transferor Company is the associate company of Nirma Limited, the Transferee Company. It is engaged in the business of processing the castor seeds for extraction of oil and deals in other allied castor products. Currently it is a loss making company. Siddhi Vinayak Cement Private Limited, the seventh Transferor Company is the wholly owned subsidiary of the Transferee Company. It has been incorporated with the object of implementing a project of an integrated cement plant with Captive power plant and waste heat recovery system. It is still in the implementation stage and has not yet commenced its commercial operations. It has been further submitted that it is proposed to amalgamate all these companies with the Transferee Company with an objective of consolidation of the companies. It is envisaged that it will be beneficial to the Transferee Company for greater integration and greater financial strength. It shall enable the amalgamated company to achieve operational and managerial efficiency. It will be in the interest of the shareholders as well as the creditors of the Transferee Company.

(3.) IT has been pointed out that Nirma Limited was a listed public limited company and its shares were listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. However, subsequently, a Delisting offer was made by the acquirers -promoters of the Company and since the public shareholding of the petitioner Company fell below the 10% limit as provided under the stock exchange norms, it became a delisted company with effect from 28th March 2012. Further, vide the order dated 27th December 2013, passed by the Gujarat High Court, it was granted the Reduction of Capital and repayment of the capital to its small shareholders. Hence, as on today, it has become a closely held public limited company. Nirma Limited has been a leading multi -locational, multi product company and an established player in the fast moving consumer goods segment has been one of the largest selling detergent brands in Indian Market. As a part of backward integration strategy, the company has set up manufacturing facilities of various products used as raw material or by products. The company has diversified in the pharma business by acquiring a running plant manufacturing I.V. fluids. It has further diversified and operates the largest solar salt works of Asia. It is highly profit making company with bright future prospects for growth. However, it is realized by the management of Nirma Limited that the Healthcare Division acquired by the company needs a different business strategy and focus. It has been thought appropriate to segregate the same from the main commercial activity of the company viz. Detergents and other fast moving consumer goods. It is envisaged that the de -merger of Healthcare Division would interalia have the following benefits -