THE HON'BLE MR JUSTICE G.V.SEETHAPATHY COMPANY PETITION Nos :95; 96 & 97 of 2010 DATED:02-09-2010 COMMON ORDER: These three petitions are filed under Sections 391 and 394 of the Companies Act, 1956 (for brevity, ‘the Act’), seeking sanction for the scheme of amalgamation, whereunder M/s Maata Cements Limited (hereinafter referred to 1st transferor company) and M/s Sakthi Stonewares Private Limited (hereinafter referred to as 2nd transferor company) merged with M/s Sri Maata Infratech Limited (hereinafter referred as transferee company). 2. Heard learned counsel for the petitioner; learned Assistant Solicitor General, representing the Registrar of Companies, and the learned counsel representing the Official Liquidator in all the three matters. Perused the record. 3. Petitioner in C.P.No.95 of 2010-1st transferor company was originally incorporated as Private Limited company under the name and style ‘M/s Maata Cements Private Limited’ on 06-12-1989 and later, the name of the company was changed to M/s Maata Cements Limited’ and a fresh certificate of incorporation was issued on 13-12-1994. The registered office of the transferor company is situate at Punjagutta, Hyderabad. The authorized share capital of the 1st transferor company is Rs.1,00,00,000/- divided into 10.00 lakhs equity shares of Rs.10/- each. The issued, subscribed and paid up share capital of the 1st transferor company is Rs.73,93,100/- divided into 7,39,310 equity shares of Rs.10/- each. Apart from that, there is a share application money of Rs.177,805/-. 4. The main objects of the 1st transferor company are: 1. To manufacture, produce, sell, purchase and generally to deal in all kinds of cement, clinker, lime, limestone gypsum, and cement products of any description (pipes, poles, asbestos, sheets, blocks, tiles, slabs, planks and garden wares. 2. To carry on the trades and business of cement, cement products, ceramics refractions and any other building products in India and elsewhere. 3. To carry on any business relating to manufacture, fabrication and sale of various machineries and there components, spares for the cement industry and building products in India and elsewhere. 5. The detailed objects of the 1st transferor company are set out in detail in the Memorandum and Articles of Association, annexed to the petition. 6. Petitioner in C.P.No.96 of 2010, 2nd transferor company, was originally incorporated as a Private Limited company under the name and style ‘M/s Sakthi Stone Wares Private Limited on 15-02-1983. The registered office of the 2nd transferor company is situate at Punjagutta, Hyderabad. The authorized share capital of the 2nd transferor company is Rs.25,00,000/- divided into 25,000 equity shares of Rs.100/- each. The issued, subscribed and paid up capital of the 2nd transferor company is Rs.14,31,000/- divided into 14,310 equity shares of Rs.100/- each. 7. The main objects of the 2nd transferor company are: 1. To produce, manufacture, refine, prepare, install, import, export, purchase, sell, mine and generally deal in all kinds of stoneware pipes and fittings such as salt glazed stoneware, pipes and fittings of all sizes, water closets, perforated pipes, channels, pickle, and acid jars, and any other related types of products. 2. To purchase, sell, import, export, refine, process, mine, quarry and generally due in all kinds of clays such as ball clay, chine clay, bauxite, garg, kyanite, sillimanite, quary, felsper, silica and any other clays and related type of products. 3. To produce, manufacture, refine, prepare, install, import, export, purchase, sell, mine and generally deal in all kinds of refractories and sanitarywares. 8. The detailed objects of the 2nd transferor company are set out in the Memorandum and Articles of Association, which is annexed to the petition. 9. Petitioner in C.P.No.97 of 2010-transferee company was originally incorporated as a Limited company under the name and style ‘M/s Viswam Cement Limited’ on 07-11-1984 and later the name was changed to ‘M/s Sri Mata Infratech Limited’ and a fresh certificate of incorporation was issued by the Registrar of Companies on 13-12-2007. The registered office of the transferee company is situate at Punjagutta, Hyderabad. The authorized share capital of the transferee company is Rs.18,00,00,000/- divided into 1,80,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid up capital of the transferee company is Rs.12,59,75,000/- divided into 1,25,97,000 equity shares of Rs.10/- each. There is also share application money of Rs.74,65,821/-. 10. The main objects of the transferee company are: 1 To produce, manufacture, refine, prepare, import, export, purchase, sell and generally to deal in all kinds of Portland cement (Portland pozzolana cement, Portland slag cement, Portland rapid hardening cement, Portland high alumina, Portland all well cement, special cement, masanory cement, lime pozzolana cement) cement products of any description (pipes, poles asbestos sheet, blocks, tiles, garden wares etc) 2 To carry on in India or elsewhere the trades and business of the survey, prospecting and providing of cement grade limestone deposits, asbestos and of manufacture of cement and building materials of all kinds, miners and engineers in all their respective branches. 3 To carry on the construction of apartments, commercial building/residential houses, factories, mills, cottages, shops, depots, warehouses, roads, dams, bridges, heavy engineering civil works and deal in any real estate including lands, mines etc., 11. The detailed objects of the transferee company are set out in the Memorandum and Articles of Association, which is annexed to the petition. 12. It is proposed to amalgamate the 1st transferor and 2nd transferor companies with the transferee company and a scheme of amalgamation was proposed. It is stated that as the transferor and transferee companies are engaged in similar business of manufacture of cement and infrastructure and allied products like stoneware, pipes and fittings and are being managed and controlled by the common shareholders, the proposed merger would reduce overhead and administrative costs and give financial leverage to both the companies. The benefits of the amalgamation and the salient features of the proposed scheme of amalgamation are set out in detail in the scheme, annexed to the petition, and they are also extracted in the petitions and hence they are not reiterated here for the sake of brevity. 13. The Board of Directors of the transferor and transferee companies in their respective meetings held on 29-10-2009 approved the proposed scheme of amalgamation with effect from 01-04-2009, i.e., the date of appointment, subject to the approval and consent of the share holders and confirmation by this Court. 14. By order, dated 26-04-2010, in C.P.Nos.317; 318 and 319 of 2010, this Court dispensed with the convening of the meeting of the shareholders of the 1st and 2nd transferor companies and the transferee company respectively. It is stated that there are only 7 shareholders in the 1st transferor company and 2 shareholders in the 2nd transferor company and 7 shareholders in the transferee company and all of them have given their consent by way of affidavits which are placed on record. It is stated that the 1st transferor company has no secured creditors and there is only one unsecured creditor i.e. K.S.N.Raju, who gave a letter of consent for the proposed scheme of amalgamation and the said letter is also filed today along with a memo. It is stated that there are no secured or unsecured creditors to the 2nd transferor company and there are no secured creditors to the transferee company. There are, however, 5 unsecured creditors for the transferee company and all of them have given letters of no objection for the proposed scheme of amalgamation and they are filed today along with a memo. All the letters issued by the unsecured creditors stating no objection for the proposed scheme of amalgamation are taken on record. 15. While admitting these petitions, this Court directed issuance of notices to the Regional Director, Ministry of Corporate Affairs, Chennai, the Registrar of Companies, Hyderabad and the Official Liquidator, attached to this Court, besides ordering general notice by publication in ‘Business Standard’ English Daily newspaper and ‘Andhra Bhoomi’ Telugu Daily newspaper of Hyderabad Editions. In response thereto, the learned Assistant Solicitor General, representing the Registrar of Companies, filed a common affidavit stating no objection, except that the transferor companies and transferee company shall produce no objection certificates from the unsecured creditors and the transferee company should pay the stamp duty as per the regulations of the A.P.Stamp Act. 16. No objection letters from the unsecured creditors have since been filed, the first objection is taken care of and the learned counsel for the petitioner-transferor company would submit that the transferee company would pay the necessary stamp duty. 17. Learned counsel representing the Official Liquidator filed a report stating that as per the information made available, 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. 18. Learned counsel for the petitioner would submit that the money available with the first and second transferor companies would stand transferred to the account of the transferee company as consequence of the amalgamation. No objection has been received from any quarter in response to the general notice, issued by way of publication in newspapers. 19. In the circumstances, as the two transferor companies and the transferee company are engaged in a similar business and the proposed scheme of amalgamation is stated to be in the interest of the companies and their members, creditors and the employees and the interest of the shareholders, creditors and employees are duly taken care under the proposed scheme of amalgamation and there being no objection from any quarter to the proposed scheme of amalgamation and the Board of Directors; shareholders and creditors having given their consent for the proposed scheme of amalgamation and there being no objection from the Central Government for the Official Liquidator, it is considered that the proposed scheme of amalgamation can be sanctioned and the same is accordingly sanctioned with effect from 01-04-2009. Consequent upon such amalgamation, the two transferor companies shall stand dissolved with effect from the appointed date i.e., 01-04-2009, without going through the process of winding up. Petitioner shall file certified copy of this order within thirty days of the receipt of the same before the Registrar of Companies for 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 for the Central Government. 20. In the result, all the three Company Petitions are allowed accordingly. There shall be no order as to costs. _______________________ G.V.SEETHAPATHY,J 02nd September, 2010. Tsy