IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO.489 OF 2009 CONNECTED WITH COMPANY APPLICATION NO.587 OF 2009 ARPANNA AUTOMOTIVE PRIVATE LIMITED …………Petitioner / Transferor Company In the matter of Scheme of Amalgamation of Arpanna Automotive Private Limited (“the Transferor Company’) with Arpanna Motors Private Limited (‘the Transferee Company’) and their Respective Shareholders and Creditors. Mr. Rajesh Shah i/b Rajesh Shah & Co., for the Petitioners. Ms. Purnima Awasthi and Mr. P. Khosla i/b Mr. S.K. Mohapatra for Regional Director. Mr. Chandanamuthu, Deputy Official Liquidator present. CORAM: S. J. Kathawalla , J. DATE: 7th August, 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 Arpanna Automotive Private Limited, the Transferor Company with Arpanna Motors Private Limited, the Transferee Company and their respective shareholders and Creditors. 3. The Petitioner which is the Transferor Company is the wholly owned subsidiary of the Transferee Company. By Order dated 8th May, 2009 passed by this Court in Company Application No. 587 of 2009 the filing of the separate Application and Petition by the Transferee Company was dispensed with in view of the judgement of this Court in Mahaamba Investment Limited v/s. IDI Limited (2001) 105 Company Cases, page 16 to 18. Hence 2 no separate Petition was filed by Arpanna Motors Private Limited, the Transferee Company. 4. Counsel appearing on behalf of the Petitioner has stated that it has complied with all requirements as per directions of this Court and it has filed necessary affidavits of compliance in the Court. Moreover, the Petitioner Company also undertakes to comply with all statutory requirements, if any, as required under the Companies Act, 1956 and the Rules made there under. 5. The Regional Director has filed Affidavit stating therein that save and except as stated in para 6 of the said Affidavit, it appears that the scheme is not prejudicial to the interest of shareholders and public. 6. The Paragraph 6 of the said Affidavit reads thus: “That the Deponent further submits that, as per clause 6(i) of the Scheme, upon the Scheme becoming effective, the AMPL (Transferee 3 Company) shall record the assets / liabilities of AAPL (Transferor Company) vested in it pursuant to the Scheme, at their respective fair values and an equivalent amount would be debited or credited, as the case may be to the General Reserve. If this Accounting Treatment is to be adopted then, in that case, the surplus, if any, of assets over the share capital is be treated as “General Reserve” in the books of the Transferee Company. This appears to be not in consonance with generally accepted Accounting Principle as also Accounting Standard - 14 prescribed by the Institute of Chartered Accountants of India which provide that in case of adoption of purchase method of accounting, the reserves arising out of the amalgamation ought to be transferred to Capital Reserve and not to General Reserve”. 7. In reply to the aforesaid objection raised by the Regional Director, the Petitioner Company has filed its Affidavit 4 dated 29th July 2009, stating that the Transferee Company agrees to transfer the profits/excess arising out of the merger to a reserve of capital nature namely; the Securities Premium Account instead of the General Reserve Account. Accordingly, clause 6(i) of the Scheme would stand amended to the said extent. 8. The Official Liquidator has filed report in Company Petition No.489 of 2009 stating that the affairs of the Petitioner Company have been conducted in a proper manner and that the Petitioner Company may be ordered to be dissolved without winding up. 9. Upon perusal of the entire material placed on records, 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. No other parties concerned have 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 and public and 5 the Official Liquidator has stated that the affairs of the Petitioner Company have been conducted in a proper manner. 10. There is no objection to the Scheme and since all the requisite statutory compliances have been fulfilled, Company Petition No.489 of 2009 filed by the Petitioner Company is made absolute in terms of prayer clauses (a) to (d) of the Petition. 11. The Petitioner Company 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 30 days from the date of the order. 12. The Petitioner company to pay costs of Rs.7,500/- each to the Regional Director and to the Official Liquidator, High Court, Bombay. Costs to be paid within four weeks from today. 6 13. Filing and issuance of the drawn up order is dispensed with. 14. All concerned authorities to act on a copy of this order along with Scheme duly authenticated by the Company Registrar, High Court, Bombay. (S. J. Kathawalla, J.) 7