THE HON'BLE MR JUSTICE G.V.SEETHAPATHY COMPANY PETITION No :116 of 2010 DATED:11-08-2010 ORDER: This petition is filed under Sections 391 and 394 of the Companies Act, 1956 (for brevity, ‘the Act’) seeking sanction for the proposed scheme of amalgamation of the petitioner company-M/s CC Health Care Products Private Limited, IDA Nacharam, Hyderabad (hereinafter referred to as ‘transferor company’) with M/s Colgate Palmolive (India) Limited (hereinafter referred to as ‘transferee company’). 2. Learned Assistant Solicitor General, representing the Central Government, filed a common affidavit and the learned counsel representing the Official Liquidator filed a report. 3. Heard learned counsel for the petitioner- company; learned Assistant Solicitor General, representing the Central Government; and the learned counsel representing the Official Liquidator, attached to this Court. Perused the records. 4. Petitioner-transferor company was incorporated on 01.07.1987 under the name and style ‘M/s Crystal Cosmetics Private Limited’, under the provisions of the Act and it became a deemed public company under Section 43A (1A) of the Act with effect from 15-03- 1991. Subsequently, it was reconverted into private limited company and thereafter the name was changed as ‘M/s CC Health Care Products Private Limited’ with effect from 06-01-2003. The registered office of the transferor company is situate at Nacharam, Hyderabad. The present authorized share capital of the transferor company is Rs.20,00,000/- divided into 2.00 lakhs equity shares of Rs.10/- each. The issued, subscribed and paid up share capital is Rs.20,00,000/- divided into 2.00 lakhs equity shares of Rs.10/- fully paid up. 5. The main object of the transferor company is: to carry on business as manufacturers, buyers, sellers, distributors, agents, exporters and importers of all kinds of Cosmetic, toilet and dentifrice requisites and preparations including toothpowder, toothpaste, toothbrushes, face creams, shaving creams, talcum and face powder, shampoos, soaps, detergents and other washing materials, cleansing agents, perfumes, lotions and oils. 6. The objects of the transferor company are set out in detail in the Memorandum and Articles of Association, annexed to the petition. 7. M/s Colgate Palmolive (India) Limited-transferee company was incorporated on 23-09-2007 under the provisions of the Indian Companies Act, 1913 and subsequently it was converted into a public limited company on 06-10-1978. The registered office of the transferee company is situate at Mumbai. The authorized share capital of the transferor company is Rs.1,37,00,00,000/- divided into 1,37,00,00,000 of equity shares of Rs.1/- each. The issued, subscribed and paid up capital of the transferor company is Rs.13,59,92,817/- divided into 13,59,92,817 equity shares of Rs.1/- each fully paid up. 8. The main object of the transferee company set out in detail in the Memorandum of Association is: to carry on business in manufacturer, sale and distribution of washing material, cleansing compounds of every character and all kinds of laundry materials, cosmetics, perfumes, detergents and toilet preparations etc. 9. It is stated that the transferor company is wholly owned subsidiary of the transferee company and that the consolidation of the transferor company and transferee company would result in benefits in terms of synergies and operations, pooling of financial, managerial, and technical resources. It is further stated that it would result in reduction of common administrative costs and will make the management control systems more effective as the proposed restructuring through the scheme of amalgamation is stated to be to the mutual advantage of both the companies. The benefits of the proposed scheme of amalgamation of the transferor company with the transferee company are set out in the scheme, annexed to the company petition and also extracted in the petition, and hence they are not reiterated herein for the sake of brevity. 10. It is stated that the Board of Directors of the transferor company have approved the proposed scheme of amalgamation in their meeting held on 29- 03-2010 subject to approval of the same by the share holders. By order, dated 30-04-2010, in C.A.No.363 of 2010, this Court dispensed with the meeting of the share holders as there are only seven share holders in the transferor company and they filed affidavits stating no objection to the proposed scheme which was placed on record. It is also stated that the Board of Directors of the transferee company in their meeting on 21-03- 2010 passed resolution approving the proposed scheme of amalgamation. It is stated that there are no secured creditors of the transferor company and there is only one unsecured creditor, which is holding the company and which gave a letter of ‘no objection’ for the proposed scheme and fully supported the claim. As the transferor company is 100% subsidiary of the transferee company, it is stated that no separate application is filed on behalf of the transferee company seeking sanction of the proposed scheme. 11. While admitting the petition, on 30-06-2010, this Court directed issuance of notice to the Regional Director, Ministry of Corporate Affairs; Registrar of Companies; and the Official Liquidator, attached to this Court. A general notice by way of publication in ‘Business Standard’ English daily and ‘Andhra Jyothi’ Telugu daily of local editions was also directed to be issued. 12. Learned Assistant Solicitor General representing the Registrar of Companies filed a common affidavit stating ‘no objection’ except that the transferee company should pay the stamp duty, wherever applicable. Learned counsel for the petitioner would submit that the transferee company would pay the stamp duty wherever applicable. 13. Learned counsel representing the Official Liquidator filed a report stating that the verification of material papers made available revealed that the affairs of the transferor company do not appear to have been conducted in a manner prejudicial to the interest of its members or to the public interest. The Official Liquidator, however, stated that the material placed before him opinion regarding the other object has not revealed anything about the pending litigation and prosecution either by or against the transferor company or its Directors. 14. Learned counsel for the petitioner would submit that there is no pending litigation, civil or criminal, either by the company or against the company or its Directors. 15. In paragraph No.21 of the petition, it is stated that no investigation or proceedings is pending under Sections 235 and 251 of the Act or other provisions of the Act against the petitioner company. 16. In view of the said averment and submission made by the learned counsel, the objection raised by the Official Liquidator in the report stands duly taken care of. No objections have been received from any quarter in response to the general notice issued by way of publication in the newspapers opposing the proposed scheme of amalgamation. 17. In the circumstances, as the transferor company is 100% subsidiary of the transferee company and the proposed scheme of amalgamation is stated to be to the mutual benefit of both the companies and also in the interest of the members thereof, the creditors, employees, Board of Directors of the companies, the share holders and the creditors having stated no objection for the proposed scheme and no objections having been received from any quarter, it is considered that the proposed scheme of amalgamation can be sanctioned and the same is accordingly sanctioned with effect from the appointed date, i.e. 01-04-2009. As consequence thereof, the petitioner-transferor company shall stand dissolved with effect from 01-04-2009 without going through the process of winding up. 18. As the proposed scheme envisages total amalgamation of the transferor company, which is a 100% subsidiary of the transferee company and there is no allotment of shares by the transferee company, the question of paying stamp duty under Article 20 (d) of Schedule-1A of the Indian Stamp Act,1899 does not arise in view of the explanation contained therein, as contended by the learned counsel for the petitioner and also held by this Court in the order, dated 12-03-2010 in C.P.No.25 of 2010 and batch. 19. Petitioner shall file a certified copy of this order within 30 days from the date of receipt of the same before the Registrar of Companies, Hyderabad for the purpose of registration and necessary follow up action. Petitioner shall pay a sum of Rs.3000/- (rupees three thousand only) to the learned Assistant Solicitor General towards costs. 20. Accordingly, Company Petition is allowed. _______________________ G.V.SEETHAPATHY,J 11th August, 2010. Tsy