IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH : HYDERABAD MONDAY, THE TWENTY EIGHTH (28TH) DAY OF JUNE, TWO THOUSAND AND TEN Present: THE HON’BLE SRI JUSTICE G.V.SEETHAPATHY Company Petition Nos.57 & 58 of 2010 C.P.No.57 of 2010: M/s VENUS ELASTOMERS PRIVATE LIMITED, rep. by its Director, G Raghunatha Reddy, having its registered Office at Ameenpur Road, Bachupally village, Quthbullapur Mandal RR district … Applicant C.P.No.58 of 2010: M/s EXCEL RUBBER LIMITED, rep. by its Director, G Raghunatha Reddy, having its registered Office at flat No.507, Sai Sadan Apartments Balkampet, SR Nagar, Hyderabad. … Applicant THE HON’BLE SRI JUSTICE G.V.SEETHAPATHY Company Petition Nos.57 and 58 of 2010 COMMON ORDER: The petitioner in C.P.No.57 of 2010 is the Transferor Company. The petitioner in C.P.No.58 of 2010 is the transferee Company. The above petitions are filed under sections 391 and 394 of the Companies Act. 2. CP No.57 of 2010 is filed by M/s Venus Elastomers Private Limited, a Company incorporated under the provisions of the Companies Act 1956, vide certificate of incorporation dated 20.05.2006. The registered office of the said company is situated at Bachupalle, Ranga Reddy district. The authorized share capital of the company is Rs.25 lakhs, divided into 2,50,000 equity shares of Rs.10/- each. The issued, subscribed and paid up capital is Rs.24,70,400/-, divided into 2,47,040/- equity shares of Rs.10/- each. The main object of the applicant Transferor Company as set out in the Memorandum and Articles of Association is to take over running business of M/s Moral Powers, a partnership with all assets and liabilities as on the date subsequent to incorporation of the company and to carry on the business of the firm The objects of the transferor company are set out in detail in the Memorandum and Articles of Association and they are not repeated herein for the sake of brevity. 3. CP No.58 of 2010 is filed by M/s Excel Rubbers Limited, which is incorporated as a private limited company under the provisions of the Companies Act 1956, vide certificate of incorporation dated 09.12.1987 and subsequently it became deemed public company on 01.07.1997. The registered office of the Transferee Company is situated at S.R.Nagar, Hyderabad. The authorized share capital of the transferee company is Rs.75 lakhs, divided into 7,50,000 equity shares of Rs.10/- each. The issued, subscribed and paid up capital of the company is Rs.60 lakhs, divided into 6,00,000 equity shares of Rs.10/- each. The main object of the company is to promote, deal, trade, manufacture, import and export all varieties of rubber and rubber products, more particularly the Butyl Rubber tubes and natural rubber flaps. The objects of the company are set out in detail in the Memorandum and Articles of Association and they are not repeated herein for the sake of brevity. 4. The two companies have proposed a scheme of merger and the benefits of the merger are set out in detail in the scheme, which are annexed to the applications. 5. While admitting both the petitions, notices were ordered to the Regional Director, Department of Company Affairs, Chennai, and the Official Liquidator and publication was also made in ‘Business Standard’ (English daily) and ‘Vaartha’ (Telugu daily) of Hyderabad editions. The Assistant Solicitor General filed common affidavit in both the matters stating no objection for proposed scheme of amalgamation, subject to Transferee Company paying stamp duty as per regulations of A.P. Stamp Act. The Official Liquidator filed a report in OLR No.2571 of 2010 in CP No.57 of 2010 stating that he called for statutory books and other relevant information from the Transferor Company and on examining the same, viewed that the affairs of the company appeared to have not been conducted in a manner prejudicial to the interests of the members or to the public. The Board of Directors of the Transferor Company at a meeting conducted on 30.01.2010 approved the scheme of amalgamation subject to the approval of this Court. 6. In the Transferor Company, there are 18 shareholders and all of them given their written consent for the scheme of amalgamation by filing affidavits. The transferor company previously filed CA No.187 of 2010 under Section 391 of the Companies Act, praying that meeting of the shareholders may be dispensed with. By order dated 11.03.2010 the said application was allowed, dispensing with the convening of the meeting of the shareholders and also the necessity to issue public notice. 7. The Board of Directors of the Transferee Company at a meeting conducted on 17.01.2010 approved the scheme of amalgamation, subject to approval of this Court. There are 18 shareholders in the Transferee Company and all of them given written affidavits of consent for the scheme of amalgamation. The Transferee Company filed CA No.188 of 2010 praying that meeting of the shareholders may be dispensed with. By order dated 11.03.2010 the said application was allowed and the meeting of the shareholders and issuance of public notice was dispensed with. 8. It is stated that the Transferor Company has no secured or unsecured creditors. 9. In the Transferee Company, there is one secured creditor i.e., State Bank of India, Commercial branch, Koti and they gave a certificate of consent stating no objection for amalgamation of the said company. Copy of the said certificate is annexed to the petition. It is stated that there are no unsecured creditors for the Transferee Company. 10. Having regard to the fact that both the companies are engaged in similar business of manufacture, export and import of various rubber products, more particularly the Butyl Rubber tubes and natural rubber flaps and by virtue of the proposed amalgamation, greater integration and greater financial strength and flexibility for the amalgamated entity is sought to be achieved, which would result in maximizing overall share value, besides other benefits, as set out in the proposed scheme annexed to the affidavits and the Board of Directors of both the companies have approved the proposed scheme of amalgamation and all the shareholders also gave their consent by way of affidavits and the interest of the creditors is not affected in any manner, and as there are no secured or unsecured creditors for the Transferor Company and there are no unsecured creditors for the Transferee Company and the sole secured creditor i.e., State Bank of India for the Transferee Company has given consent by way of a certificate for the proposed amalgamation and having regard to the fact that there is no objection received from any quarter for the proposed amalgamation in spite of public notice and the Central Government and the Official Liquidator also do not have any objection for the same, it is considered that the proposed amalgamation of the transferor and transferee companies can be sanctioned and accordingly, the proposed scheme of amalgamation is sanctioned. 11. The parties to the Scheme of Arrangement or other persons interested shall be at liberty to apply to this Court for any directions that may be necessary in regard to the working of the Scheme of Arrangement. 12. The Transferor and Transferee companies shall pay the costs of these petitions set at Rs.3,000/- each to the learned Assistant Solicitor General and that the Transferor and Transferee companies do file with the Registrar of Companies a certified copy of this order within 30 days from the date of receipt of a copy of this order. 13. The company petitions are allowed accordingly. . ___________________ G.V.SEETHAPATHY, J Date: 28.06.2010 bss