1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY SCHEME PETITION NO. 511 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO. 444 OF 2010 KARMA ENERGY LIMITED...Petitioner/ First Transferor Company AND COMPANY SCHEME PETITION NO. 512 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO. 445 OF 2010 WEIZMANN FOREX LIMITED …Petitioner/ Second Transferor Company AND COMPANY SCHEME PETITION NO. 513 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO. 446 OF 2010 WEIZMANN LIMITED……Petitioner / Transferee Company/ Demerged Company AND COMPANY SCHEME PETITION NO. 514 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO. 447 OF 2010 KARMA WIND POWER LIMITED…….. Petitioner / Resulting Company No. 1 AND COMPANY SCHEME PETITION NO. 515 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO. 448 OF 2010 CHANAKYA HOLDING LIMITED …….. Petitioner / Resulting Company No. 2 In the matter of the Companies Act, 1956 (1 of 1956); AND In the matter of Sections 391 to 394 read with Section 78 and 100 to 103 of the Companies Act, 1956; 2 AND In the matter of the Composite Scheme of Arrangement BETWEEN Karma Energy Limited (“the First Transferor Company”) AND Weizmann Forex Limited (“the Second Transferor Company”) AND Weizmann Limited (“the Transferee Company” or “the Demerged Company”) AND Karma Wind Power Limited (“the Resulting Company No. 1”) AND Chanakya Holdings Limited (“the Resulting Company No. 2”) AND Their Respective Shareholders. Mr. Rajesh Shah i/b Rajesh Shah & Co. Advocate for the Petitioner in all Petitions. Dr. T. Pandian, Dy Official Liquidator, in CSP No. 511 to 512 of 2010. Mr. Vishwajit Sawant, i/b Mr. S. K. Mahapatra for Regional Director in all Petitions. CORAM: S. J. KATHAWALLA J. DATE: 29th October, 2010 PC: 1. Heard learned counsel for the parties. 2. The sanction of the Court is sought under Sections 391 to 394 read with Section 78 and 100 to 103 of the Companies Act, 1956 to the Composite Scheme of Arrangement between Karma Energy Limited, the First Transferor Company, Weizmann Forex Limited, the Second Transferor Company, Weizmann Limited, the Transferee / Demerged Company, Karma Wind Power Limited, the Resulting Company No. 1 and 3 Chanakya Holdings Limited, the Resulting Company No. 2 and their respective Shareholders. The Scheme comprises of the following arrangements:- I. The amalgamation of Karma Energy Limited and Weizmann Forex Limited with Weizmann Limited; and II. Demerger of Power Undertaking of Weizmann Limited into Karma Wind Power Limited on a going concern basis; and III. Demerger of Forex Undertaking of Weizmann Limited into Chanakya Holdings Limited on a going concern basis. 3. Counsel appearing on behalf of the Petitioners has stated that they have complied with all requirements as per directions of this Court and they have filed necessary affidavits of compliance in the Court. Moreover, the Petitioner Companies undertake to comply with all statutory requirements, if any, as required under the Companies Act, 1956 and the rules made thereunder. The said undertaking is accepted. 4. The Official Liquidator has filed his report in Company Scheme Petition Nos.511 of 2010 and 512 of 2010 stating therein that the affairs of the Transferor Companies have been conducted in a proper manner and that the Transferor Companies may be ordered to be dissolved. 5. The Regional Director has filed an Affidavit stating therein that save and except as stated in paragraphs 6 (a) to (e) of the Affidavit, the Scheme dose not appear to be prejudicial to the interest of shareholders and public. In paragraph 6 (a) to (e) of the affidavit, the Regional Director has stated that:- “ 6.(a) As per clause 17 of the Scheme the name of KWPL is proposed to be changed to “Karma Energy Limited” and as per clause 27 of the Scheme the name of CHL is proposed to be changed to “Weizmann Forex 4 Limited”. In this connection KWPL and CHL may be directed to comply with provisions of Section 20/21 of the Companies Act 1956 in respect of filing of necessary forms with the Registrar of Companies and proposed new name will be allowed subject to availability of the same, by the Registrar of Companies since under the computerized MCA 21 system of allotting the names, it is systematically not possible to reserve the names. Therefore, the name if available at the time of filing such application shall be made available by the Registrar of Companies, Mumbai. (b) As per clause 15.5 (Part C) and 25.5 (Part D) of the Scheme, the KWPL and CHL to the extent required have to increase their respective authorized share capital in order to issue new equity shares under the Scheme. In this connection the KWPL & CHL may be directed to comply with provisions of Section 94/97 read with Schedule X of the Companies Act, 1956, in respect of filing of necessary forms with the Registrar of Companies after payment of necessary filing fee and stamp duty as applicable on the said forms. (c) It is observed that, the shareholding pattern post merger in the Transferee Company/Demerged Company as against public holding would be reduced from 30.48% to 22.70%. The said company (WL) should ensure that promoter holding is suitably reduced so that public holding is maintained not less than 25% so as to comply with listing norms. (d) It is observed that after post demerger in the First Resulting Company and Second Resulting Company, the public holding would be about 22.60% and 22.61% respectively. As the shares of these two Resulting Companies are required to be listed as per clause No. 15.3 & 25.2 of the Scheme respectively, both the Resulting Companies should undertake to increase the public holding not less than 25% to comply with listing norms. (e) The Second Transferor Company (WFL) is registered with RBI as Authorised Dealer Category II for carrying out the money changing business. If the Scheme is approved, the said business will be transferred to Second Resulting Company (CHL). In this connection it is submitted 5 that the order of this Hon’ble High Court on the present scheme of arrangement shall be filed by Second Transferor Company (WFL) and Second Resulting Company (CHL) within 30 day’s with Reserve Bank of India.” 6. Mr. S. Srinivasan, Authorised Signatory of the Petitioner Companies has filed his affidavit dated 27th October, 2010 in reply to the observation made by the Regional Director in his Affidavit. With reference to paragraphs 6(a) and 6(b) of the affidavit of Regional Director are concerned, an undertaking has been given on behalf of the Resulting Company No. 1 and Resulting Company No. 2 to comply with applicable provisions of the Companies Act, 1956. Further counsel appearing on behalf of the Resulting Company No. 1 and Resulting Company No. 2 undertakes that new name will approved subject to availability of the same on the MCA-21 system at the time of such application. The said undertaking is accepted. 7. So far as paragraph 6(c) and 6(d) of the affidavit of Regional Director are concerned, it is stated that the Regional Director has not considered shareholding of Private Corporate Bodies and Non Resident Indian / Overseas Corporate Bodies, not belonging to promoter category, while calculating part arrangement public shareholding pattern. It is further stated that the public shareholding of the Transferee/ Demerged Company, Resulting Company No. 1 and Resulting Company No. 2 will be above the minimum threshold of 25% of listing norms and that the Transferee / Demerged Company has also made such necessary disclosures in the notice and explanatory statement sent to its equity shareholders. The Transferee /Demerged Company, Resulting Company No.1 and Resulting Company No. 2 have also given an undertaking to comply with the applicable provision of the Listing Agreement. The said undertaking is accepted. 6 8. So far as paragraph 6(e) is concerned, the Second Transferor Company and the Resulting Company No. 2 have given an undertaking to file order of this Court on the present Scheme of Arrangement within 30 days from the date of the order with the Reserve Bank of India. The said undertaking is accepted. 9. From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy. None of the parties concerned have come forward to oppose the Scheme. 10. Since all the requisite statutory compliances have been fulfilled, the Company Scheme Petition Nos. 511 of 2010 and Company Scheme Petition Nos. 512 of 2010 filed by the Transferor Companies is made absolute in terms of prayer clauses (a) to (d), of the respective Petitions and the Company Scheme Petition No. 513 of 2010 filed by the Transferee Company/Demerger Company is made absolute in terms of prayer clauses (a) to (c) and the Company Scheme Petition No. 514 of 2010 and Company Scheme Petition No. 515 of 2010 filed by the Resulting Companies is made absolute in terms of prayer clauses (a) to (b) of the respective Petitions. 11. The Petitioner Companies 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. 12. The Petitioners in all the Petitions to pay costs of Rs.10,000/- each to the Regional Director, Western Region, Mumbai, and the Petitioners in Company Scheme Petition No. 511 of 2010 and Company Scheme Petition No. 512 of 2010 to pay costs of Rs. 10,000/- each to the Official Liquidator, High Court, Bombay. Costs to be paid within four weeks from today. 7 13. Filing and issuance of the drawn up order is dispensed with. 14. All authorities concerned to act on a copy of this order along with Scheme duly authenticated by the Company Registrar, High Court (O.S.), Bombay. (S. J. KATHAWALLA J.)