THE HON'BLE MR JUSTICE G.V.SEETHAPATHY COMPANY PETITION Nos :63 & 64 of 2010 DATED:19-07-2010 COMMON ORDER: These petitions are filed under Sections 391 and 394 of the Companies Act, 1956 ( for brevity, ‘the Act’) seeking sanction for the proposed scheme of amalgamation of the transferor and transferee companies. 2. Company Petition No.63 of 2010 is filed by M/s Rank Readymix Concrete Private Limited, Hyderabad (hereinafter referred to as ‘transferor company’). 3. Company Petition No.64 of 2010 is filed by M/s Rank Silicon and Industries Private Limited, Hyderabad (hereinafter referred to as ‘transferee company’). 4. Heard learned counsel for the petitioner-company; learned Assistant Solicitor General, representing the Central Government; and the learned counsel representing the Official Liquidator, attached to this Court. 5. The transferor company is incorporated on 06-01- 2006 under the provisions of the Act with its registered office situate at KPHB colony, Hyderabad and the transferee company was incorporated on 22-08-2002 under the provisions of the Act with its registered office situate also at KPHB colony, Hyderabad. The authorized share capital of the transferee company is Rs.3.00 crores divided into 30,00,000 equity shares of Rs.10/-each. The present issued, subscribed and paid up share capital of the transferor company is Rs.3.00 crores divided into 30,00,000 equity shares of Rs.10/- each fully paid up. The present authorized share capital of the transferee company is Rs.3,25,00,000/- divided into 32,50,000 equity shares of Rs.10/- each. The issued, subscribed and paid up share capital of the transferee company is Rs.3,14,00,000/- divided into 31,40,000 equity shares of Rs.10/- each fully paid up. 6. The main object of the transferor company is to carry on the business of manufacturing/trading of Readymix Concrete products used in constructions, roads, dams and other civil works. The objects of the transferor and transferee companies are set out in detail in the respective Memorandum of Association and they are extracted in the petitions. 7. The two companies proposed a scheme of amalgamation as both the companies are stated to be engaged in the same business and the proposed amalgamation would give more financial edge, marketing tie up apart from being cost effective by availing the infrastructure facilities. It is stated that the proposed scheme would also lead to forwarding integration and there will be wider financial leverage to the transferee company besides increase of business/market share and reducing the overhead cost. It is further stated that the proposed scheme of amalgamation of the transferor company with the transferee company will be beneficial to the shareholders, employees and also the creditors. 8. The Board of Directors of the two companies in their respective board meetings held on 22-02-2010 approved the scheme of amalgamation with effect from 01-04-2009, subject to the consent of the shareholders and confirmation by this Court. The salient features of the proposed scheme of amalgamation are set out in detail in the scheme annexed to the Company Petitions and also extracted in the petitions. 9. Earlier, the transferor company filed C.A.No.196 of 2010 and the transferee company filed C.A.No.197 of 2010 praying that the meeting of the shareholders may be dispensed with. It is stated that there are eight shareholders in the transferor company and all of them gave their consent for the proposed scheme of amalgamation by filing affidavits. There are fourteen shareholders in the transferee company and they gave consent for the proposed scheme by means of affidavits. This Court by order, dated 22-03-2010, heard both the applications C.A.No.196 and 197 of 2010 and dispensed with convening of the meeting of the shareholders. 10. It is stated that the transferor company has availed cash credit and term loans from the A.P.S.F.C., State Bank of India and hire purchase loans from ICICI bank, Kotak Mahindra bank, ING Vysya bank limited, SREI Infrastructure and HDFC bank. All the above secured creditors have stated no objection for the proposed scheme of amalgamation by way of letters addressed to the petitioner, which are filed today along with a memo. It is stated that the said secured creditors are common to both the transferor and transferee companies and they have no objection for the proposed scheme of amalgamation. It is stated that there are no other creditors to the transferor or transferee companies. 11. While admitting the Company Petitions on 08-04- 2010, this Court directed issuance of notices to the Regional Director, Ministry of Corporate Affairs, Chennai and the Official Liquidator, attached to this Court, and also ordered publication of general notice in ‘Andhra Bhoomi’ Telugu daily and ‘Business Standard’ English daily of Hyderabad Editions. In response to the said notices, the learned Assistant Solicitor General, representing the Registrar of Companies, filed common affidavit stating no objection, subject to the transferor and transferee companies obtaining and producing no objection letters from the secured and unsecured creditors and also subject to payment of the stamp duty by the transferee company. 12. Learned counsel representing the Official Liquidator filed a report in O.L.R.No.278/2010 stating that on examination of the auditor’s reports and other material furnished by the companies, no adverse remarks have been found in the auditor’s report as to the affairs of the transferor company and it appears that the affairs of the company have not been conducted in a manner prejudicial to the interest of the members or to the public. In response to the general notice by way of publication in newspapers, no objections have been received from any quarter to the proposed scheme of amalgamation. 13. The first objection raised by the Registrar of Companies and the Official Liquidator regarding securing of no objection letters from the creditors has since been complied with as the said letters issued by the creditors stating no objection to the proposed amalgamation are filed today. Regarding the second objection, the transferor company states no objection to pay the stamp duty. 14. In the circumstances, having regard to the fact that both the companies are engaged in a similar type of business and the proposed amalgamation is stated to be in the interest of the shareholders, creditors and employees of the companies and the proposed amalgamation does not in any way affect the interest of the employees or the creditors or the shareholders and the board of directors of the two companies having approved the proposed scheme and the shareholders also expressed consent for the proposed scheme by way of affidavits and the creditors of both the companies have also stated no objection to the proposed amalgamation and the Central Government and the Official Liquidator, attached to this Court, also having no objection for the scheme and there being no objection received from any quarter in response to the general notice, issued by way of publication in newspapers, it is considered that in view of the benefits of amalgamation, stated in the scheme and also in the petitions, it is considered that the proposed scheme of amalgamation can be sanctioned and the same is accordingly sanctioned with effect from the appointed date i.e. 01-04-2009. Consequently, the transferor company stands dissolved with effect from 01- 04-2009, without going through any process of winding up. The petitioner shall file a certified copy of this order within thirty days from the date of receipt of the same before the Registrar of Companies, Andhra Pradesh for the purpose of registration and necessary follow up action. 15. Accordingly, both the petitions are allowed. _______________________ G.V.SEETHAPATHY,J 19th July, 2010. Tsy