COMP/209/2007 1/10 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD COMPANY PETITION No. 209 of 2007 In COMPANY APPLICATION No. 346 of 2007 With COMPANY PETITION No. 210 of 2007 In COMPANY APPLICATION No. 345 of 2007 For Approval and Signature: HONOURABLE MR.JUSTICE K.A.PUJ ================================================= 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================= TIME PLAZA ORGANIZERS PVT. LTD - Petitioner(s) Versus . - Respondent(s) COMP/209/2007 2/10 JUDGMENT ================================================= Appearance : M/S WADIA GHANDY &CO for Petitioner(s) : 1, MR IQBAL SHAIKH for Respondent(s) : 1, ================================================= CORAM : HONOURABLE MR.JUSTICE K.A.PUJ Date : 09/05/2008 ORAL JUDGMENT 1. These are petitions filed by two petitioners Companies for sanction of a scheme of arrangement in the nature of amalgamation of Time Plaza Organizers Pvt. Ltd., - transferor Company with SNL Financial (India) Pvt. Ltd., - transferee Company under Section 391 to Section 394 of the Companies Act, 1956. 2. It has been submitted that transferor Company was originally incorporated under the Companies Act, 1956 on 22.10.1996 under the name and style of “Goyal Water World Park Private Ltd” having registration No.04-30966 of 1996-97. Subsequently, by fresh Certificate of incorporation dated 29.4.2005, COMP/209/2007 3/10 JUDGMENT name of the said Company was changed to “Time Plaza Organizers Pvt. Ltd.”. On 10.4.2006, the transferee Company, namely, SNL Financial (India) Pvt. Ltd. acquired all shares of the transferor company at an agreed price of Rs.2,991/- per share and thereby all shares of the transferor company are held by the transferee company from 10.4.2006. The transferor Company is thereby a wholly owned subsidiary of the transferee company from 10.4.2006. The transferor Company is the owner of certain immovable assets and at present providing back up/support in the business activities of the transferee company. The Board of Directors of both the transferor company and transferee company at their respective Board meetings passed Resolution and unanimously approved the said Scheme of Amalgamation on 20.4.2007 and 19.7.2007 respectively. There are no secured creditors of the transferor company and transferee company as on the date of filing COMP/209/2007 4/10 JUDGMENT of the application before this Court seeking direction either for convening and/or seeking dispensation of the meeting as required under Section 391(2) of the Companies Act, 1956. The equity shareholders and unsecured creditors of the transferee Company and transferor company have consented to the proposed scheme of amalgamation. The consent of equity shareholders and unsecured creditors of the transferor company and transferee company are produced on the record. 3. It is further stated that the business of both the companies on amalgamation will be carried out more economically, efficiently and beneficially as more funds and assets for the business of the amalgamated company will be available. It is further stated that the transferor company being a subsidiary company and the transferee company enlarging its scope of work within India requires support COMP/209/2007 5/10 JUDGMENT of the transferor company for its expansion. With a view to take advantage of consolidation, which would result in benefits from economies of scale, it was proposed to consolidate the operation and amalgamate transferor company with transferee company. The proposed amalgamation will generate synergy in operation of the transferee company with the support of the transferor company and in turn, enable the transferee company to expand its market substantially. It is further stated that the existence of independent companies of which one is wholly owned subsidiary results in wastage of man power and resources and the integration of such two companies will lead to greater and optimal utilization of resources. The amalgamation would, therefore, enable the transferee company to increase operations and confer competitive advantage on the entire business and would provide support to achieve global scales of operation. COMP/209/2007 6/10 JUDGMENT 4. The transferor company preferred Company Application No.346 of 2007 seeking dispensation of the meeting of shareholders and unsecured creditors of the company on the basis of their consent to the proposed scheme. The said Company Application came up for hearing before this Court on 20.9.2007 wherein the learned Company Judge refused dispensation of meeting as was prayed for. The transferor company being aggrieved by the aforesaid order preferred OJ Appeal No.223 of 2007 which came up for hearing before Division Bench of this Court on 11.10.2007 and the Division Bench has set aside the order of the learned Company Judge dated 20.9.2007 and dispensed with the meeting of the shareholders and unsecured creditors of the transferor company and transferee company. 5. Similarly, transferee Company has filed COMP/209/2007 7/10 JUDGMENT Company Application No.345 of 2007 seeking dispensation of the meeting of the equity shareholders and unsecured creditors of the Company on the basis of their consent to the proposed scheme. The said Company Application came up for hearing before the learned Company Judge on 20.9.2007 wherein the learned Company Judge had refused to dispense meeting as was prayed for. The transferee Company being aggrieved by the order of the learned Company Judge preferred OJ Appeal No.234 of 2007 which came up for hearing before Division Bench of this Court on 11.10.2007 and the Division Bench has set aside the order of the learned Company Judge dated 20.9.2007 and dispensed with the meeting of the shareholders and unsecured creditors of the transferee Company. 6. Both these petitions were admitted by this Court on 23.11.2007. They were duly advertised in the newspapers, namely, Divya COMP/209/2007 8/10 JUDGMENT Bhashkar (Gujarat daily) and Indian Express (English daily), both of Ahmedabad edition. Publication in Government Gazette was dispensed with. An affidavit of publication was filed on 14.12.2007 confirming the said publication. No one has come forward with any objection to the said petitions even after the publication. 7. Notice of the petition was served upon the Official Liquidator, in the transferor company. The Official Liquidator has filed his report dated 11.2.2008 and the report confirms that the affairs of the transferor company have not been conducted in a manner prejudicial to the interest of its members, creditors or public interest. 8. Notice of the petition has been served upon the Central Government and Mr.Iqbal Shaikh, learned Central Government Counsel appears for the Central Government. An affidavit COMP/209/2007 9/10 JUDGMENT dated 28.12.2007 has been filed by Mr. R.K.Dalmia, Dy.Registrar of Companies alongwith letter of Regional Director dated 17.12.2007 stating therein that the report of the Registrar of Companies on the Company Petition Nos.209 ad 210 of 2007 connected with Company Application Nos.345 and 346 of 2007 has been examined by him and it has been decided not to oppose the said petition. 9. Having Heard Mr.Mahapatra, learned advocate appearing for M/s.Wadia Ghandy & Co., for the petitioners and Mr.Iqbal Shaikh, learned Central Government Counsel, appearing for Central Government of India and having considered report of the Official Liquidator as well as Regional Director and being satisfied that the amalgamation would be in the interest of the Companies and their members and creditors, prayer in terms of para 28(a) of the Company Petition No.209 of 2007 and Company Petition No.210 of 2007 are COMP/209/2007 10/10 JUDGMENT hereby granted. 10. The petitions are disposed of accordingly. So far as the costs to be paid to the learned Central Government Counsel is concerned, the same are quantified Rs.3,500/- per petition. The same may be paid to the learned advocate Shri Iqbal Shaikh. (K. A. PUJ, J.) kks