HONOURABLE SRI JUSTICE G. BHAVANI PRASAD C.P.NO.118 OF 2010 DATE: 15.09.2010 Between: M/s. Arsin Systems Private Limited, rep. By its Director, Banjara Hills, Hyderabad. …… Petitioner Company (Transferor Company) HONOURABLE SRI JUSTICE G. BHAVANI PRASAD C.P.NO.118 OF 2010 ORDER: 1. The petitioner/transferor company desires this Court to sanction the scheme of amalgamation between the petitioner company and the transferee company so as to bind all the equity share holders and creditors of both the companies and for other proper orders under Sections 391 to 394 of the Companies Act. 2. The petitioner company was incorporated as a Private Limited Company on 24.03.2000 with its registered office at Banjara Hills, Hyderabad and it is engaged in the business of manufacturing and developing computer systems, Computer peripherals, accessories, micro fiche and like and designing and development of systems and application software as per the Memorandum and Articles of Association of the company. The authorised share capital of the transferor company is Rs.1.00 crore divided into equity shares of Rs.10/- each with a subscribed and paid-up capital of Rs.85,58,600/-. The copy of the annual report of the company for the year ending 31.03.2009 and a copy of the unaudited balance sheet of the company as on 31.03.2010 are enclosed to the petition. 3. The transferee company/Semantic Space Technologies Limited was incorporated on 24.11.1997 as a private limited company and became a public limited company on 12.01.2000 in a different name and again changed its name to the present name on 03.07.2000. The transferee company has its registered office at Jubilee Hills, Hyderabad and as per its Memorandum and Articles of Association, it is engaged in the business of consultancy and other services in computers, software development etc. The authorised share capital of the transferee company is Rs.25.00 crores divided into equity shares of Rs.10/- and the subscribed and paid-up capital is Rs.12,02,82,150/- as on date of the scheme being approved by the Board of Directors of the transferee company. A certified copy of the Annual Report of the transferee company for the year ending 31.03.2009 and unaudited certified copy of the balance sheet of the said company as on 31.03.2010 are enclosed to the petition. 4. The transferor company is wholly owned subsidiary of the transferee company and it is proposed by the transferee company to acquire the business of the transferor company in order to bring about better synergies, strengthening the existing business and better administrative control of the transferee company. The employees of either company who are engaged in any manner, would continue to enjoy the same benefits as they used to before the proposed amalgamation and the details of the scheme of amalgamation stated in the petition show that the scheme is in the interest of both the companies. The Boards of Directors of the transferor and transferee companies had approved the scheme in their respective meetings held on 01.04.2010 and there was no irregularity or mis-management in the affairs of either company as per auditors reports and the transferor company has no secured creditors. The assets of both the companies are sufficient to meet the liability in favour of 11 unsecured creditors of the transferor company and the said creditors remained unaffected in the value of their debt or security by the proposed amalgamation. The amalgamation does not involve reorganisation of the share capital of the transferee company and thereby no separate petition for the same is required for transferee company. In C.A.No.362 of 2010, this Court has already permitted dispensing with the meeting of the share holders and unsecured creditors of the transferor company and there are no petitions under Sections 397 and 398 of the Companies Act against the transferor company. There are no proceedings or investigation pending against the transferor company. Therefore, the petitioner sought for sanction of the scheme of amalgamation after issuing notice to the Regional Director, Department of Company Affairs; Registrar of Companies and Official Liquidator, apart from general notice published in news papers. 5. This Court ordered general notice by way of publication in ‘Business Standard’ English Daily and ‘Andhra Jyothi’ Telugu Daily, Hyderabad editions on 05.07.2010 and the publications have been accordingly made, the copies of which are filed into this Court. 6. In response to notice issued to the Official Liquidator, a report of the Official Liquidator has been filed stating that upon verification of information and material papers made available to him by the petitioner company, the affairs of the transferor company do not appear to have been conducted in a manner prejudicial in the interests of its members or to the public interest. 7. The Registrar of Companies filed his common affidavit through the Assistant Solicitor General of India in response to the notice issued to the Regional Director (Southern Region),Chennai and Registrar of companies, stating that the transferee company should pay the stamp duty wherever applicable as per the regulations of Stamp Act and the typographical errors in para-7 of the petition should be corrected. 8. In so far as typographical errors in para-7 of the petition are concerned, Sri Ch. Pushyam Kiran, learned counsel for the petitioner has been permitted to make the corrections in open Court. 9. No other objections have been raised either in the report of the Official Liquidator or in the report of the Registrar of Companies. 10. A close perusal and consideration of the contents of the petition and other material on record discloses no reason for not considering the request for approval of the scheme of amalgamation of the wholly owned subsidiary company with the holding company and no separate petition by the transferee company appears to be required under such circumstances as held in Andhra Bank Housing Finance Limited v. M/s.Andhra Bank[1] wherein it was held that where the scheme of amalgamation is in between the subsidiary and holding companies, the holding company need not file a separate application. So far as the liability to pay the stamp duty under the Stamp Act is concerned, transferee company is bound to pay the same wherever applicable and subject to the same, the petition can be ordered. 11. Therefore, the petition is allowed. The scheme of amalgamation is sanctioned and is declared to be binding on all the share holders and creditors of the transferor and transferee companies. Within 30 days from the date of this order, a certified copy of this order shall be caused to be filed before the Registrar of Companies and the order of the Court shall be made in Form No.42 subject to such variation as the circumstances may require in terms of Rule 84 of the Companies (Court) Rules, 1959. ________________________ G. BHAVANI PRASAD,J Date:15.09.2010. GK HONOURABLE SRI JUSTICE G. BHAVANI PRASAD C.P.NO.118 OF 2010 Date: 15.09.2010 Gk. [1] 2003(3) ALD 654