THE HONOURABLE SRI JUSTICE N.V. RAMANA Company Petition Nos.4 and 5 of 2010 COMMON ORDER: The petitioners, namely M/s.Wardha Power Company Limited (hereinafter referred to as ‘the Transferor Company’) and M/s. KSK Mahanandi Power Company Limited (hereinafter referred to as ‘the Transferee Company’), which are registered under the provisions of the Companies Act, 1956, (hereinafter referred to as ‘the Act’) in the State of Andhra Pradesh, have filed these Company Petitions under Sections 391 to 394 of the Act, praying to sanction the Scheme of Arrangement, as approved by their shareholders. The Transferor Company was originally incorporated as a private limited company on 28.10.2005, under the name and style of “M/s. Wardha Power Company Private Limited” and, later, it was converted into public limited company and its name was changed to the present one with effect from 02.04.2009. Its registered Office is situated at 8-2-293/82/A/431/A, Road No.22, Jubilee Hills, Hyderabad- 500 033. The authorized share capital of the Transferor Company is Rs.3000,00,00,000/- divided into 275,00,00,000 equity shares of Rs.10/- each and 25,00,00,000 preference shares of Rs.10/- each. Its present issued, subscribed and paid up capital is Rs.245,97,15,193/- divided into 31,20,000 Class A equity shares of Rs.10/- each fully paid up, 9,24,04,380 Class A equity shares of Rs.10/- each (Re.1 paid up), 13,93,39,967 Class B equity shares of Rs.10/- each fully paid up, 13,25,35,653 Class B equity shares of Rs.10/- each (Re.1/- paid up), 6,25,00,000 equity shares of Rs.10/- each fully paid up and 1,85,17,549 0.01% redeemable cumulative preference shares of Rs.10/- each fully paid up. The main objects of the Transferor Company are to generate, harness, develop, accumulate, distribute and supply electricity by setting up power plants either by hydro, thermal, gas, and diesel oil or through renewable energy sources such as solar, photovoltaic, windmill, biomass and or other means by use of liquid, gaseous or solid fuels for the purpose of light, heat, motive, power and for all other purposes for which electrical energy can be employed and transmit, distribute, supply and sell such power either directly or through transmission lines or facilities of central/state governments or any other licensee, other consumers of electricity including for captive consumption for any industrial projects, joint venture companies or otherwise and generally to develop, generate, accumulate power at any other place or places and to transmit, distribute, sell and supply such power, etc. The Transferee Company was incorporated on 19.06.2009 and its registered office is situated at 8-2-293/82/A/431/A, Road No.22, Jubilee Hills, Hyderabad- 500 033. The authorized share capital of the Transferee Company is Rs.5,00,000/- divided into 50,000 equity shares of Rs.10/- each. Its present issued, subscribed and paid up capital is Rs.5,00,000/- divided into 50,000 equity shares of Rs. 10/- each. The main objects of the Transferee Company are to generate, harness, develop, accumulate, distribute and supply electricity by setting up power plants either by hydro, thermal, gas, and diesel oil or through renewable energy sources such as solar, photovoltaic, windmill, biomass and or other means by use of liquid, gaseous or solid fuels for the purpose of light, heat, motive, power and for all other purposes for which electrical energy can be employed and transmit, distribute, supply and sell such power either directly or through transmission lines or facilities of central/state governments or any other licensee, other consumers of electricity including for captive consumption for any industrial projects, joint venture companies or otherwise and generally to develop, generate, accumulate power at any other place or places and to transmit, distribute, sell and supply such power, etc. The Transferor Company consists of two power-generating projects. One of them is 540 MW (135 MW x 4) Coal Based Group Captive Power Project located at Warora, Maharashtra (Wardha-MH) and the other is 3600 MW (600 MW x 6) Coal Based Power Project located at Nariyara, Chattisgarh (Wardha-CG). The Scheme of Arrangement provides for de-merger of the power project Wardha-CG located at Nariyara, Chattisgarh, into the Transferee Company, with a view to provide greater business focus for the companies, and is stated to be in the best interest of the companies, their respective shareholders, creditors and employees. The Board of Directors of the Transferor and Transferee Companies in their respective meetings held on 16.09.2009 have approved the proposed Scheme of Arrangement, subject to approval of the shareholders and confirmation by the Court. This Court, taking into consideration the affidavits filed by Class A and B equity shareholders, equity shareholders and Class A redeemable preference shareholders of the Transferor Company, and also the shareholders and unsecured creditor of the Transferee Company, expressing their ‘no objection’ to the Scheme of Arrangement, and in view of the undertaking of the Transferor Company to produce the consent/no objection from its secured creditors at the time of consideration of the sanction of Scheme by this Court, dispensed with the convening of their meetings, by orders dated 17.12.2009 passed in C.A. Nos. 2026, 2027, 2028, 2029, 2030, 2031, 2032 and 2033 of 2009. Thereafter, the petitioners filed the present Company Petitions, praying to sanction the Scheme of Arrangement, as approved by their shareholders to be binding on all their shareholders, creditors and all the concerned. On 18.01.2010, this Court, while admitting the Company Petitions, issued notices to the Regional Director, Ministry of Corporate Affairs, Chennai, and the Registrar of Companies, Andhra Pradesh, Hyderabad, and ordered publication of the notice of admission of the Company Petitions in “Andhra Jyothi” and “Business Standard” of Hyderabad editions. The petitioners took out notices, as ordered by this Court, and also caused paper publication and filed memo of proof of service into Court. The notices having been served, the Registrar of Companies, Andhra Pradesh, Hyderabad, filed common affidavit, raising an objection that the Transferee Company should pay the Stamp Duty as per the provisions of the Stamp Act. Answering the said objection taken by the Registrar of Companies, learned counsel for the petitioners submits that, upon sanction of the Scheme, the Transferee Company will necessarily pay the stamp duty as required under the Stamp Act, so as to make the Scheme effective. The affidavits of the secured creditors of the Transferor Company, expressing no objection to the Scheme of Arrangement, have also been filed before this Court, vide memo USR No.305 of 2010, as was undertaken by the Transferor Company at the time of seeking dispensation of the meeting of its secured creditors. Heard the learned counsel for the petitioners and perused the Scheme of Arrangement. As noted above, the shareholders, secured and unsecured creditors of the companies have consented to the Scheme of Arrangement as proposed and resolved by the Board of Directors of the respective companies, providing for de-merger of 3600 MW Power Project of the Transferor Company, located at Nariyara, Chattisgarh, into the Transferee Company. Though the notice of admission of the Company Petitions was taken out by way of paper publications, no objections whatsoever have been received by this Court from any quarter. The objection taken by the Registrar of Companies, with regard to the stamp duty payable by the Transferee Company, has been satisfactorily answered by the learned counsel for the petitioners, stating that the required stamp duty will be paid as per the provisions of the Stamp Act, upon sanction of the Scheme. The Scheme is not opposed to any provision of law or public interest, apart from being in the best interest of the companies and their respective shareholders, creditors and employees. Hence, I am of the considered opinion that this Court also should not have any objection to the sanction of the Scheme of Arrangement. Hence, this Court hereby sanctions the Scheme of Arrangement, as approved by the shareholders of both the companies, and hereby declares that the same is binding on all the shareholders, creditors and employees of both the companies. The parties to the Scheme of Arrangement or other persons interested shall be at liberty to apply to this Court for any directions that may be necessary in regard to the working of the Scheme of Arrangement. The petitioner companies shall pay the costs of these petitions set at Rs.3,000/- each to the learned Assistant Solicitor General, and that the petitioner companies do file with the Registrar of Companies a certified copy of this order within 30 days from this date. The Company Petitions are allowed accordingly. ___________________________ JUSTICE N.V. RAMANA 26th February, 2010 IBL