IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO.316 OF 2009 CONNECTED WITH COMPANY APPLICATION NO.242 OF 2009 ORBIT SHELTER PRIVATE LIMITED …………Petitioner / Transferor Company. COMPANY PETITION NO.317 OF 2009 CONNECTED WITH COMPANY APPLICATION NO.243 OF 2009 ORBIT CORPORATION LIMITED .………Petitioner / Transferee Company. Mr. Shyam Mehta i/b Rajesh Shah & Co., for the Petitioners. Mr. M. Chandanamuthu, Dy. Official Liquidator in C.P. No.316 of 2009. Ms. Bharti Mahant i/b Mr. S.K. Mohapatra for Regional Director in all Petitions. CORAM: A. M. Khanwilkar, J. DATE: 26th June, 2009 PC: 1. Heard learned counsel for the parties. 2. The sanction of the Court is sought under Sections 391 to 394 of the Companies Act, 1956, to the Scheme of Amalgamation of Orbit Shelter Private Limited with Orbit Corporation Limited. 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, Petitioner Companies also undertake to comply with all statutory requirements if any, as required under the Companies Act, 1956 and the Rules made there under. 4. The Regional Director has filed Affidavit stating therein that save and except as stated in paragraphs 6(a) and 6(b) of the said Affidavit, it appears that the Scheme is not prejudicial to the interest of shareholders, creditors and the public. In paragraph 6(a) he has stated that Orbit Corporation Limited, the Transferee Company was recently inspected under Section 209A of the Companies Act, 1956 and various violations like under Section 295, 297, 383A, 256, 211 and 292A etc. were observed by the Inspecting Officer and that the Inspection Report was submitted to the Ministry for directions on the follow-up action. It is further stated that the Transferee Company has suo-moto filed compounding application under section 621A of the Companies Act, 1956 in respect of violation of section 295 and 297 of the Act. 5. In paragraph 6(b) of the said Affidavit, the Regional Director has further stated that the Transferor Company also appears to have violated the provisions of the section 295 of the Act 2 in respect of acceptance of loans from the Transferee Company before it become a subsidiary of the latter and that the Registrar of Companies has been directed to initiate necessary penal action in that regard. 6. Mr. Nitin Bavisi, the General Manager Finance of the Transferee Company has filed his affidavit dated 23rd June, 2009 in Company Petition No.317 of 2009 in reply to the objections raised by the Regional Director in his Affidavit. In the said Affidavit, the Transferee Company has, inter alia, stated that as regards the alleged violation under section 295 and 297 of the Act by the Petitioner / Transferee Company, separate application for compounding of the said violations has been filed under section 621A of the Act and that the said Applications are presently pending for consideration and disposal by the Registrar of Companies. The counsel appearing on behalf of the Petitioner / Transferee Company undertakes to take such further steps as required under the law for compounding the said violations. The said undertaking is accepted. It is further stated that none of the alleged violations referred to by the Regional Director have any bearing whatsoever on the Scheme and hence do not come in the way of the scheme being sanctioned by the Court. It is also stated that it is always open to the Regional Director to adopt such proceedings in accordance with law with regard to the alleged violations against the Company and its Directors, as the case may be, even after the scheme is sanctioned. It is also stated that the Transferee Company 3 has no objections to such liberty being reserved to the Regional Director subject to the Company’s right to defend such proceedings in accordance with law and that if any such proceedings are adopted against the Transferee Company, the same can be and may be continued against the Transferee Company. 7. Mr. Vikram Phatarpekar, the Authorised Signatory of the Transferor Company has also filed his affidavit dated 25th June, 2009 in Company Petition No.316 of 2009 in reply to the objections raised by the Regional Director in paragraph 6(b) of his Affidavit. In the said Affidavit, the Transferor Company has stated that the Transferor Company has filed an application for compounding of the said violation under section 621A of the Act. The counsel appearing on behalf of the Petitioner / Transferor Company undertakes to take such further steps as required under the law for compounding the said violation. The said undertaking is accepted. 8. In view of the statements made in the said affidavits, the Regional Director/Registrar of Companies is at liberty to adopt appropriate proceedings in accordance with Law against the Petitioner Companies for the aforesaid violations. Moreover, it is not stated and there is nothing to suggest that the alleged violations are detrimental to the scheme as such. 9. The Official Liquidator has filed report in Company Petition No.316 of 2009 stating therein that the affairs of the 4 Transferor Company have been conducted in a proper manner and that the Transferor Company may be ordered to be dissolved. 10. Upon perusal of the entire material placed on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to any public policy. None of the parties concerned has come forward to oppose the Scheme. Moreover, the Regional Director has stated that the Scheme as proposed is not prejudicial to the interest of shareholders, creditors and the public and the Official Liquidator has stated that the affairs of the Transferor Company have been conducted in a proper manner. 11. There is no objection to the Scheme, save and except as stated in paragraph 4 and 5 hereinabove, and since all the requisite statutory compliances have been fulfilled, Company Petition No.316 of 2009 filed by the Transferor Company is made absolute in terms of prayer clauses (a) to (j) and Company Petition No.317 of 2009 filed by the Transferee Company is made absolute in terms of prayer clauses (a) to (i). 12. The Petitioner Companies to lodge a copy of this order and the Scheme with the concerned Superintendent of Stamps for the purpose of adjudication of stamp duty payable, if any, on the same within 30 days of obtaining the certified copy and/or an authenticated copy of the order. 5 13. The Petitioners in all the Company Petitions to pay cost of Rs.7,500/- each to the Regional Director and to the Official Liquidator by the Petitioner in the Company Petition No.316 of 2009 filed by the Transferor Company. Costs to be paid within four weeks from today. 14. Filing and issuance of the drawn up order is dispensed with. 15. All concerned authorities to act on a copy of this order along with Scheme duly authenticated by the Company Registrar, High Court, Bombay. (A .M. Khanwilkar, J.) 6