THE HON’BLE SRI JUSTICE N.V. RAMANA C.P. Nos. 177, 178, and 179 of 2009 Oral order: The petitioners, namely M/s. Techno Blast India Limited (hereinafter referred to ‘the First Transferor Company’), M/s. VIS Industries Private Limited (hereinafter referred to as ‘the Second Transferor Company’) and M/s. Regenesis Private 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, and having their Registered Offices at 29/B, P & T Colony, Trimulgherry, Secunderabad – 500 015, have filed these Company Petitions under Sections 391 and 394 of the Act, praying to sanction the Scheme of Amalgamation, as approved by the shareholders of the Transferor and Transferee Companies. The First Transferor Company was incorporated on 09.07.1999. The authorized share capital of the First Transferor Company is Rs. 1,20,00,000/- divided into 1,20,000 equity shares of Rs.100/- each. Its present issued, subscribed and paid up capital is Rs. 25,00,000/- divided into 25,000 equity shares of Rs.100/- each fully paid up. The First Transferor Company has been incorporated with the main objects of carrying on the business of manufacturers, assemblers, designers, developers, processors, producers, preparers, contractors, converters, buyers, sellers, purchasers, importers, exporters, installers, repairers, cleaners, stores, warehouses, distributors, dealers, factors, agents and suppliers of detonators, fulminators and all other kinds and types of explosives etc. The Second Transferor Company was incorporated on 10.04.2001. The authorized share capital of the Second Transferor Company is Rs. 3,05,00,000/- divided into 3,05,000 equity shares of Rs.100/- each. Its present issued, subscribed and paid up capital is Rs. 1,24,26,600/- divided into 1,24,266 equity shares of Rs.100/- each fully paid up. The Second Transferor Company has been incorporated with the main objects of carrying on the business of manufacturers, assemblers, designers, developers, processors, producers, preparers, contractors, converters, buyers, sellers, purchasers, importers, exporters, installers, repairers, cleaners, stores, warehouses, distributors, dealers, factors, agents and suppliers of detonators, fulminators and all other kinds and types of explosives etc. The Transferee Company was incorporated on 14.03.2001. The authorized share capital of the Transferee Company is Rs.1,50,00,000/- divided into 1,50,000 equity shares of Rs.100/- each. Its present issued, subscribed and paid up capital is Rs. 84,33,300/- divided into 84,333equity shares of Rs. 100/- each fully paid up. The Transferee Company has been incorporated with the main objects of carrying on the business of manufacturers, assemblers, designers, developers, processors, producers, preparers, contractors, converters, buyers, sellers, purchasers, importers, exporters, installers, repairers, cleaners, stores, warehouses, distributors, dealers, factors, agents and suppliers of detonators, fulminators, and all other kinds and types of explosives, etc. The Transferor and Transferee Companies are all in the business of manufacturers of detonators, fulminators and all kinds of explosives etc. They are closely held companies. With a view to have optimum utilization of the products with a wide range of markets geographically, it was felt to amalgamate the Transferor Companies with the Transferee Company, so that the shareholders will give more financial edge, marketing tie up, cost effective and develop multi- product range with effective production by availing the infrastructural facilities. Further, it was felt that the amalgamation will ensure greater synergy to the activities and would result in carrying on the business more efficiently by improved means and enlarge the area of operations and optimum utilization of the management and other resources and surplus funds, if any, would be invested in new area of operations, which would yield income and pave way for further growth of the company. It was further felt that the proposed amalgamation will increase the business/market share and reduce the overhead costs. Hence, it has been decided to amalgamate the Transferor Companies with the Transferee Company, so that the amalgamation will not only be beneficial to their shareholders, but also to the employees, stakeholders and public at large. The Board of Directors of the Transferor and Transferee Companies in their respective meetings held on 01.09.2009 have approved the proposed Scheme of Amalgamation between the Transferor and Transferee Companies, to be effective from 01.04.2009 subject to approval of the shareholders and confirmation by the Court. This Court taking into consideration the affidavits filed by the shareholders of the Transferor and Transferee Companies expressing their ‘no objection’ to the Scheme of Amalgamation, by separate orders dated 27.10.2009 passed in C.A. Nos. 1861, 1862 and 1863 of 2009, dispensed with the convening of the meeting of their respective shareholders. 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 members, creditors and employees. On 10.11.2009, this Court while admitting the Company Petitions, issued notices to the Central Government and the Official Liquidator, and ordered publication of the notice of admission of the Company Petitions in “Business Standard” and “Andhra Bhoomi” of Hyderabad edition. As ordered, the petitioners took out notices to the Registrar of Companies, Andhra Pradesh, Hyderabad, the Regional Director, Ministry of Company Affairs, Chennai, and also by way of paper publication on 17.11.2009 and filed memo of proof of service into Court. The notices having been served, the Registrar of Companies, Andhra Pradesh, Hyderabad, filed affidavit stating that the Regional Director, Ministry of Corporate Affairs, Chennai, who is the competent authority on behalf of the Central Government, examined the scheme carefully with reference to the material papers made available to him and upon such examination, he found that the First Transferor Company has two secured creditors, namely M/s. HDFC Bank and M/s. Tata Capital Limited and the Second Transferor Company has one secured creditor, namely M/s. HDFC Bank, and that both of them have to furnish “No Objection Letters”, if any, from the secured creditors. Complying with the objection taken by the Central Government, the counsel for the petitioners filed memo, enclosing “No Objection letters” received from the secured and unsecured creditors of the Transferor and Transferee Companies. Heard the learned counsel for the petitioners and perused the Scheme of Amalgamation. The Transferor and Transferee Companies are closely held companies. All of them are engaged in similar businesses, namely manufacturers of detonators, fuminators, all kinds of explosives etc. The Memorandum of Associations of the Transferor and Transferee Companies, enable amalgamation with other companies that are engaged in similar businesses. Considering the similarity of businesses, with a view have optimum utilization of products with wide range of markets geographically, have more financial edge, marketing tie-up, cost effective and develop multi-product range with effective production, to have greater synergy of activities and carry on business with improved means and enlarge area of operations and optimum utilization of management and other resources and surplus funds, if any, can be invested in new area of operations, which would yield income and pave way for further growth and substantially improve asset utilization and provide financial leverage, which will be beneficial to not only to the shareholders, but also the employees, stake holders and public at large, the Board of Directors of the Transferor and Transferee Companies, as noted above, in their respective meetings held on 01.09.2009 have approved the Scheme of Amalgamation subject to approval by their shareholders and orders of this Court. As the shareholders of the Transferor and Transferee Companies, filed affidavits expressing their “No Objection” to the Scheme of Amalgamation, this Court by separate orders dated 27.10.2009, passed in C.A. Nos. 1861, 1862 and 1863 of 2009, dispensed with the convening of the meeting of their respective shareholders. Though notice of admission of the Company Petitions, as ordered by this Court was taken out by the Transferor and Transferee Companies by way of paper publication, no objections whatsoever were received by this Court from any quarter. The petitioners meeting the objection taken by the Central Government filed memo accompanied with the “No Objection Letters” of the secured and unsecured creditors of the Transferor and Transferee Companies, which are placed on record. The Official Liquidator in his reports, reported that the affairs of the Transferor and Transferee Companies appear to have not been conducted in a manner prejudicial to their members of public interest. The Scheme of Amalgamation apart from being in the interests of their shareholders secured and unsecured creditors, is also said to be in the interest of the employees, for consequent to merger of the Transferor Companies with the Transferee Company, the employment of the employees of the Transferor Companies, shall stand protected on the same terms and conditions on which they were originally appointed. Since the persons interested in the affairs of the Transferor and Transferee Companies, namely their shareholders and secured and unsecured creditors, have consented to the Scheme of Amalgamation, as proposed and resolved by the Board of Directors of the respective companies, I am of the considered opinion that this Court also should not have any objection to the sanction of the Scheme of Amalgamation. Hence, the Scheme of Amalgamation is approved. By reason of approval of the Scheme of Amalgamation, the Transferor and Transferee Companies shall stand dissolved without going through the process of winding up. All the assets and liabilities of the Transferor Companies, shall stand transferred and vested with the Transferee Company from the appointed date. Accordingly, the Company Petitions are allowed. The Transferor and Transferee Companies shall serve a copy of this order on the Registrar of Companies, Andhra Pradesh, Hyderabad, within a period of four weeks from the date of receipt of a copy of this order. The Transferor and Transferee Companies, shall pay to the Assistant Solicitor General and the Official Liquidator, a sum of Rs. 3,000/- each towards fee. No costs. ________________ N.V. RAMANA, J. Dated: 28th January, 2010 KSR