1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO.207 OF 2008 CONNECTED WITH COMPANY APPLICATION NO.196 OF 2008 In the matter of the Companies Act, I of 1956 AND In the matter of Sections 391 and 394 of the Companies Act, I of 1956 AND In the matter of Scheme of Amalgamation of Hem Apparels Pvt. Ltd. and Prit (India) Engineering Pvt.Ltd. with Mangal Singh Brothers Private Limited Hem Apparels Pvt.Ltd. ..Petitioner WITH COMPANY PETITION NO.208 OF 2008 CONNECTED WITH COMPANY APPLICATION NO.197 OF 2008 Prit (India) Engineering P.Ltd. ..Petitioner WITH COMPANY PETITION NO.209 OF 2008 CONNECTED WITH COMPANY APPLICATION NO.196 OF 2008 Mangal Singh Brothers P.Ltd. ..Petitioner 2 CORAM : S.C.DHARMADHIKARI, J CORAM : S.C.DHARMADHIKARI, J CORAM : S.C.DHARMADHIKARI, J DATED : 6TH JUNE, 2008 DATED : 6TH JUNE, 2008 DATED : 6TH JUNE, 2008 P.C.: 1. This is a Company Petition under section 391 and 394 of the Companies’s Act, 1956. The sanction of the court is sought to the scheme of amalgamation of petitioner in Company Petition no.207 of 2008 with Mangalsingh Brothers P.Ltd. The scheme has been set out and copy thereof annexed to the Company Petition. It is stated that this is a scheme of merger. The three companies are under the same management. The merger will give certain benefits which are set out in para 17 of the petition. It has been very clearly stated that on the scheme becoming effective the transferor company shall be dissolved without being wound up. Para 19 onwards sets out the statutory and other compliances including with the orders of this court. All declarations are also given on oath. 2. A copy of the Company Petition has been 3 served upon the official liquidator and the Regional Director. The Official Liquidator has submitted his report. In the report, it has been stated that the Chartered Accountants have been appointed to investigate into the affairs of the Transferor’s Company. The Chartered Accountants have for the purpose of the report scrutinised the audited accounts for a period of 5 years more particularly referred to in para 4 of the report. A copy of the report of the Chartered Accountant is also annexed. The Liquidator has submitted that on perusal of the report of the Chartered Accountant and specifically the answers to the queries raised by them would show that the affairs of the Transferor’s Company have been conducted in a proper manner. Transferor company can be dissolved by this court. 3. As far as Regional Director is concerned, an affidavit is filed. After reference to the scheme and the reply is submitted to the queries raised, It is stated that in para 5 of the affidavit that the Director of the Transferor and Transferee Company have filed affidavits which 4 disclose that there is no transaction of the Company and its directors resulting in violation of various laws including Companies Act, 1956. The relevant accounting standards have also not been violated. 4. It is stated by the deponent that the Transferee Company is holding 20,000 equity shares of the 2nd Transferor Company. However, the scheme does not provide for cancellation of shares held by the Transferee Company in the 2nd Transferor Company. A further affidavit is filed on behalf of the petitioner company and the General Manager / Deponent has stated that the Chartered Accountants have certified that on merger of 2nd Transferor Company into the Transferee Company, 20,000 shares will automatically stand cancelled. This is the accounting effect or consequence which will follow after the scheme is sanctioned. The relevant accounting treatment would be made and that is what the Chartered Accountants also have stated in their communication dated 02.06.08 being Exhibit - 1 to the further affidavit. 5 5. In the light of the above, I have no hesitation in concluding that the scheme is not prejudicial to the interest of the creditors, shareholders and general public. The scheme does not contravene any law or public policy. In such circumstances, it deserves to be sanctioned. 6. In the result, Company Petition is made absolute in terms of prayer clause (a) to (j). The cost of Regional Director and Official Liquidator is quantified at Rs.5,000/- Costs to be paid within 4 weeks from today. 7. Filing and issuance of the drawn up order is dispensed with. All concerned authorities to act on a copy of this order duly authenticated by Company Registrar, High Court, Bombay. (S.C.DHARMADHIKARI,J.) (S.C.DHARMADHIKARI,J.) (S.C.DHARMADHIKARI,J.)