CSP. No.34/2010 with CSP. No. 35/2010 - 1 - VPH IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY SCHEME PETITION No. 34 OF 2010 CONNECTED WITH COMPANY APPLICATION No. 1300 OF 2009 Luxury Exports Pvt. Ltd. ... Petitioner Vs -------- ... Respondent WITH COMPANY SCHEME PETITION No. 35 OF 2010 CONNECTED WITH COMPANY APPLICATION No. 1301 OF 2009 Natraj Financial & Services Ltd. ... Petitioner Vs -------- ... Respondent *** Ms. Alpana Ghone i/b M/s. Rajesh S. Shah & Co., for the Petitioner. Mr. Vikramaditya Deshmukh i/b S. K. Mohapatre, Regional Director. Dr. T. Pandian, Dy. Official Liquidator (in CSP No. 34/2010.) CORAM : S.J. VAZIFDAR, J. CSP. No.34/2010 with CSP. No. 35/2010 - 2 - DATED : JULY 16, 2010. P.C. : 1. Both the petitions are for sanction to the scheme of amalgamation. The Petitioner in Company Scheme Petition No. 34 of 2010 is the transferor Company and the Petitioner in Company Scheme Petition No. 35 of 2010 is the transferee Company. 2. There are no objections from any third parties to the scheme being sanctioned. The procedure stipulated by the previous order of this Court have been complied with. 3. The Official Liquidator has filed an affidavit dated 16th April, 2010, stating that affairs of the transferor Company have been conducted in a proper manner. 4. The Regional Director has filed an affidavit dated 7th July, 2010 in which it is stated that save and except as stated in paragraph 6A to 6E, it appears that scheme is not prejudicial to the interest of the shareholders. Paragraphs 6(a) to 6(e) of said affidavit read as under- “(a ) That the Registrar of Companies, Mumbai in his report CSP. No.34/2010 with CSP. No. 35/2010 - 3 - dated 03/03/2010 at point No.20 has stated that, one complaint was received by him against the Transferor and Transferee Company from Shri Dr. Kirti Somaiya Ex- MP alleging involvement of these companies in the Madhu Koda Finance Scam. A Copy of Letter received by him from the Ministry together with said compliant annexed and marked as Exhibit “E”, In this regard the Registrar of Companies, Mumbai was advised to Examine the complaint and the Balance Sheet of the subject companies under section 234 of the Companies act 1956 . The Registrar of Companies Finally submitted his report dated 16/06/2010 in respect of M/s. Luxury Exports Private Limited, and report dated 17/06/2010 in respect of Natraj Financial and Services Limited. Copies of said reports are annexed here to and marked as Exhibit ‘F-1’ & ‘F-2’ respectively. In the said report in respect of various issues considered by him, he has opined for inspection of the books of account of both the companies forming part of the scheme under section 209-A of the Companies Act, 1956, giving reason that true purpose of the transaction can be ascertained only through CSP. No.34/2010 with CSP. No. 35/2010 - 4 - inspection of the books of account of the said companies under section 209A of the Companies Act, 1956. After considering the aforesaid reports received from the Registrar of Companies, the same have been forwarded to the Ministry by the Regional Director, vide his letter dated 22/06/2010 for Ministry’s further consideration and instructions thereof are awaited form the Ministry. b) the Deponent further respectfully submits that, the Registrar of Companies vide his letter dated 16/02/2010 has bought to the notice of the Regional Director that the investigation are also being conducted by other investigating agencies namely Enforcement Directorate, etc., in connection with Mudha Koda Finance Scam. A copy of said letter dated 16/02/2010 of the Registrar of Companies, Mumbai is annexed herewith and market as Exhibit ‘G’. c) I say that it is alleged that Luxury Exports Private Limited and Nartaj Financial & Services Limited are belonging to the Madhu Koda Group. It is now a matter of record that the activities of the companies and other entities forming CSP. No.34/2010 with CSP. No. 35/2010 - 5 - part of the Madhu Koda Group are being investigated by the various agencies and regulators like Enforcement Directorate and Income Tax Department. It is suspected that these companies may be involved in the alleged scam. Registrar of Companies has also informed that the investigations are at various stages and the concerned authorities are likely to conclude their investigations and submit their reports in due course. The source of the fund used by Luxury Exports Private Limited and Natraj Financial & services limited is relevant and will be revealed by the investigation conducted by other agencies. d) Further it is bought to the notice of this Hon’ble High Court, in another scheme of arrangement between Balaji Bullions & Commodities (India) Private Limited (Demerged Company) and Hillview Impex Private Limited (Resulting Company) were filed by the said companies bearing Petitions No. 938 & 941 of 2009 connected with Company Application No.1094 & 1095 of 2009. This Hon’ble High Court was Pleased to sanction the said Scheme and both the company petitions are made absolute in terms of CSP. No.34/2010 with CSP. No. 35/2010 - 6 - Prayers clause (a) to (h) vide order dated 05/05/2010 with the observation that “This order will in no way prejudice the pending investigation” (e) The deponent further respectfully submits that, the companies involved in the scheme are alleged to have involved in “Madhu Koda Group companies” The Hon’ble High Court may kindly consider the above directions of this court and may be pleased to issue similar direction in this case also, so that the pending investigation proceedings initiated by the regulatory agencies are completed to reach final conclusion in respect of the affairs of the above companies.” 5. The Regional Director has not come to any conclusion against the petitioner on the basis of these allegations and investigations. However, the investigations admittedly, are pending. 6. A learned Single Judge of this Court by an order dated 5th May, 2010 sanctioned a scheme of arrangement, involving the merger in respect of two other companies, which are also a part of the same group. It is stated that similar facts were brought to the notice of the CSP. No.34/2010 with CSP. No. 35/2010 - 7 - learned Single Judge by the Regional Director in those Petitions. The learned Judge sanctioned the scheme with the clarification that said order will in no way prejudice the pending investigations. 7. In respect of the information furnished by the Regional Director, the facts in the present case are similar. In any event, it is clarified that this order will also in no way affect any pending proceedings or investigations. 8. In the circumstances, Company Scheme Petition No. 34 of 2010 is made absolute in terms of prayer clauses (a) to (j), and Company Scheme Petition No. 35 of 2010 is made absolute in terms of prayer clauses (a) to (i). 9. The petitioner in Company Scheme Petition No. 34 of 2010 shall pay the costs of the Official Liquidator and the Regional Director, fixed at Rs.10,000/- each. The Petitioner in Company Scheme Petition No. 35 of 2010 shall pay the costs of the Regional Director, fixed at Rs.10,000/-. The costs shall be paid within four weeks from today. 10. This order will in no way prejudice the pending CSP. No.34/2010 with CSP. No. 35/2010 - 8 - proceedings or investigations whatsoever against the Petitioner. 10. In the event of any difficulty, liberty to the parties, including the Official Liquidator and the Regional Director to apply. . The Petitioner Company to lodge a copy of this order and the Scheme, duly authenticated by the Company Registrar, High Court (O.S.), Bombay, with the concerned Superintendent of Stamps for the purpose of adjudication of stamp duty payable, if any, on the same, within 60 days from the date of the order. . Filing and issuance of the drawn up order is dispensed with. . All concerned authorities to act on a copy of this order along with Scheme duly authenticated by the Company Registrar, High Court, Bombay.