HON’BLE SRI JUSTICE G.V.SEETHAPATHY COMPANY PETITION No.13 OF 2010 ORDER: This petition is filed under Sections 391 and 394 of the Companies Act, 1956 read with Rule 79 of the Company Court Rules, 1959, seeking sanction of proposed scheme of amalgamation, whereunder the petitioner-transferor company i.e., Gems Techno Solutions (India) Private Limited is proposed to be merged with the transferee company i.e., Hewelett Packard Global Soft Private Limited. 2. Heard the learned counsel for the petitioner, learned Assistant Solicitor General representing the Registrar of Companies, Hyderabad and Regional Director, Ministry of Corporate Affairs, Chennai and the learned counsel representing the Official Liquidator attached to this Court. Perused the records. 3. The petitioner company (hereinafter referred to as ‘transferor company’) was incorporated on 15-12- 2004 under the Companies Act, 1956 as a private limited company. The registered office of petitioner company is situate at Visakahpatnam. The authorized share capital of the transferor company is Rs.10 lakhs, comprising 1,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid up share capital of the transferor company as on 31-03-2009 is Rs.5 lakhs divided into 50,000 equity shares of Rs.10/- each, fully paid up. 4. The main objects of the transferor company, as set out in the Memorandum of Association, is to design, develop, export and import computers, computer software relating to all kinds of projects, including medical services, scientific, technical, financial, economic, legal, outsourcing works and other services. The detailed objects of the transferor company are set out in the Memorandum of Association and Articles of Association annexed to the company petition and is also extracted in the petition and hence they are not reiterated here for the sake of brevity. 5. The transferee company was incorporated on 20-01-1988 under the Companies Act, 1956, originally under the name and style of Digital Equipment (India) Limited at Bombay. Subsequently, the registered office was changed from Bombay to Karnataka and a fresh certificate of registration was issued on 24-04-2000 by the Registrar of Companies at Bangalore. The name of the transferee company was changed to Digital Global Soft Limited and a fresh certificate of incorporation was issued on 07-08-2001 and the name was again changed to Hewlett Packard Global Soft Private Limited and a fresh certificate of incorporation was issued on 23-07- 2004 by the Registrar of Companies, Bangalore. The status of the transferee company was changed from public limited company to private limited company with the approval of the Central Government. The name of the transferee company was changed to Hewlett Packard Global Soft Private Limited and a fresh certificate of incorporation on conversion into private limited company was issued on 05-04-2007. The registered office of the transferee company is situate at Bangalore. 6. The objects of the transferee company are fully set out in the Memorandum of Association, which is enclosed to the company petition and extracted in the petition also. 7. The authorized share capital of the transferee company is Rs.5 lakhs comprising 4,000 equity shares of Rs.2,50,000/- each. The issued, subscribed and paid up share capital of the transferee company as on 31-03-2009 is Rs.33,92,14,070/-, divided into 1356 equity shares of Rs.2,50,000/- each, fully paid up. 8. It is proposed to amalgamate the transferor company with the transferee company and the benefits of such amalgamation are set out in detail in the scheme of amalgamation annexed to the petition. The salient features of the scheme of amalgamation are set out in the petition also. It is stated that the proposed amalgamation would enable both the companies to synergize the customer offerings under one management and consolidate the business of the transferor company with the transferee company and bring in administrative and operational rationalization resulting in reduced overheads and other expenses and optimal utilization of various resources. It is further stated that the proposed amalgamation will enable more efficient and economic control and conduct of the companies and the financial resources of the companies will be conveniently merged and pooled leading to more effective and centralized management. The transferee company is already well established in the same filed of business and related activities as that of the transferor company and hence there would be convenient integration of the business of the petitioner company with the transferee company. It is stated that the proposed amalgamation is in the interest of both the companies and respective shareholders and employees and all concerned and the scheme does not, in any way, adversely affect their integrity. 9. The Board of Directors of the transferor company have considered the scheme of amalgamation and given their approval at the board meeting held on 12- 10-2009. It is stated that the petitioner has previously filed C.A.No.2034 of 2009 seeking to dispense with the convening of holding of the meeting of the shareholders and by order dated 17-12-2009, this Court dispensed with the said meeting of the shareholders and unsecured creditors of the transferor company, as there are only two shareholders who have given their no objection letters which are placed on record and out of the 23 unsecured creditors, 20 of them have given no objection letters, which are also placed on record. It is stated that there are no secured creditors for the transferor company. 10. While admitting the company petition on 04- 02-2010, this Court directed issuance of notice to the Regional Director, Ministry of Corporate Affairs, Chennai and Registrar of Companies, A.P., Hyderabad and also directed publication of general notice in ‘Andhra Jyothi’ Telugu daily and ‘Indian Express’ English daily of Visakhapatnam editions. The learned Assistant General, representing the Registrar of Companies, filed common affidavit wherein no objection was raised except that as the transferee company is situate in the State of Karnataka, the scheme is subject to approval of the High Court of Karnataka and the transferee company is liable to pay the stamp duty wherever applicable. The Official Liquidator also filed a report stating that upon verification of information and material made available to him by the petitioner company, it is found that the affairs of the said company do not appear to have been conducted in a manner prejudicial to the interests of its members or the public. The Official Liquidator also stated that the information and records furnished have not revealed anything about pending litigation and prosecution either by or against the transferor company and its Directors. In para 21 of the application, it is stated that there are no proceedings pending under the provisions of the Companies Act either by or against the Directors of the transferee company and the learned counsel for the petitioner would submit that no legal proceedings, civil or criminal, are also pending relating to the transferor and transferee companies. It is stated that the transferee company filed C.O.P.No.209 of 2009 before the High Court of Karnataka at Bangalore and by order dated 08-07-2010, the High Court of Karnataka at Bangalore allowed the said application, sanctioning the scheme, subject to sanction of the same by this Court also in respect of the transferor company. A copy of the said order is filed by the learned counsel for the petitioner along with a memo. 11. No objections have been received from any quarter in response to the general notice published in the newspapers. 12. In the circumstances, as both the companies are engaged in similar business activity and 99.99% of the shareholding in the transferor company is said to be held by the transferee company and the proposed scheme is intended to benefit both the companies and safeguard the interest of the members, creditors and employees thereof and as the Board of Directors have approved the proposed scheme of amalgamation and the shareholders have also given consent for the same and the scheme has already been sanctioned by the High Court of Karnataka at Bangalore in respect of the transferee company, it is considered that the proposed scheme of amalgamation, insofar as the transferor company is concerned, can be sanctioned and the same is accordingly sanctioned with effect from the appointed dated i.e., 01-04-2009. On such amalgamation, the transferor company stands dissolved without going through the process of winding up. 13. The petitioner shall file a certified copy of this order within 30 days of receipt of the same before the Registrar of Companies for registration and taking necessary follow up action. The petitioner shall pay Rs.3,000/- towards costs of this petition to the learned Assistant Solicitor General. 14. In the result, the company petition is allowed accordingly. ____________________ G.V.SEETHAPATHY, J 11th August, 2010. Lrkm HON’BLE SRI JUSTICE G.V.SEETHAPATHY COMPANY PETITION No.13 OF 2010 WEDNESDAY, THE ELEVENTH DAY OF AUGUST TWO THOUSAND AND TEN IN THE MATTER OF THE COMPANIES ACT, 1956 (1 OF 1956) AND IN THE MATTER OF SECTIONS 391 TO 394 OF THE COMPANIES ACT, 1956 Between: GEMS Techno Solutions (India) Private Limited, Regd. Office at Plot No.100, Section 1, MVP Double Road, Opp: State Bank of Mysore, Visakhapatnam – A.P – 530 017. ….Petitioner/ Transferor Company