1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICITON COMPANY SCHEME PETITON NO 475 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO 515 OF 2010 Nirmal Lifestyle (India) Private Limited......Petitioner AND COMPANY SCHEME PETITON NO 476 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO 516 OF 2010 Nirmal Lifestyle Limited.......Petitioner COMPANY SCHEME PETITON NO 477 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO 517 OF 2010 Nirmal Lifestyle City Development Corporation Private Limited...Petitioner In the matter of Sections 391 to 394 of the Companies Act, 1956; AND In the matter of Scheme of Arrangement between Nirmal Lifestyle (India) Private Limited and Nirmal Lifestyle Limited and Nirmal Lifestyle City Development Corporation Private Limited and their respective shareholders Mr. Hemant Sethi i/b Hemant Sethi & Co. Advocates for the Petitioners. Mr. A.W. Ansari advocate for Neeraj Steels Sales one of the Unsecured Creditor Dr. T. Pandian Dy. Official Liquidator in Company Scheme Petition No. 475 of 2010. 2 Ms. Soma Singh i/b Mr. S. K. Mohapatra for Regional Director in all Petitions. CORAM: S.J. KATHAWALLA, J DATE: 15th OCTOBER 2010 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 a Scheme of Arrangement between Nirmal Lifestyle (India) Private Limited and Nirmal Lifestyle Limited and Nirmal Lifestyle City Development Corporation Private Limited and their respective shareholders. 3. Counsel appearing on behalf of the Petitioners has stated that the Petitioners have complied with all requirements as per directions of this Court and they have filed necessary affidavits of compliance in the Court. Moreover, Petitioners undertake to comply with all statutory requirements, if any, as required under the Companies Act, 1956 and the rules made there under. The said undertaking is accepted. 4. The Regional Director has filed his affidavit, inter alia, stating therein that save and except as stated in paragraphs 6(a) to 6 (c), the scheme is not prejudicial to the interest of shareholders and public. In Paragraph 6 the Regional Director has stated that: (a) As regard clause No. 7.6/7.7 of Part B of the Scheme it is suggested that the Reserve arising out this amalgamation shall not be utilised 3 for the purpose of declaring dividend as the same is not a free reserve for the said purpose and the Transferee Company may be directed to give undertaking to this effect. (b) Clause 25 of Part C of the Scheme deals with change in Main Objects of the Memorandum of Association of the Resulting Company (NLCDPL). In this connection , its is respectfully submitted that the Resulting Company (NLCDPL), may be directed to comply with section 40 read with section 18 of the Act and to file amended copy of Memorandum of Association alongwith Form 21 with the Registrar of Companies . (c) As per clause 18.4 of the Scheme, the Resulting Company shall take necessary steps to increase or alter, to the extent required its authorized share capital suitably to enable it to issue and allot Redeemable Preference Shares pursuant to the Scheme. In this connection the Resulting Company may be directed to comply with provisions of Section 94/97 read with Schedule X of the Companies Act, 1956, in respect of filing of necessary forms with the Registrar of Companies after payment of necessary filing fees and stamp duty as applicable on the said forms. 5. As far as the objection in paragraph 6 (a) is concerned, the Petitioner through their counsel undertakes that the Reserve arising out of amalgamation shall not be utilised for the purpose of declaring dividend. The said undertaking is accepted. 6. So far as paragraph 6 (b) & 6 (c) of the Affidavit of the Regional Director is concerned, the Petitioner thorough their counsel undertakes that all compliances will be made as observed by the 4 Regional Director in paragraphs 6(b) &6(c) of the affidavit. The said undertakings are accepted. 7. Apart from above objections, 3 unsecured creditors namely M/s Neeraj Steels Sales, unsecured Creditor of Nirmal Lifestyle Limited, Mr. Amit Rasiklal Shah & Mrs Amrita Amit Shah, unsecured creditor of M/s Nirmal Lifestyle (India) Private Limited have filed objections to the Scheme stating that their dues have not been paid . 8. The learned Counsel appearing for the Petitioner states that the purported claim of the said Unsecured Creditors are disputed and that the said Creditors cannot use Scheme as tool to recover debts which are disputed. It is further stated that the Scheme does not affect the rights of Creditors as there is no Arrangement or Compromise with any of the Creditors. 9. The learned counsel appearing for the Petitioner is correct in his submission. It will be open to the said unsecured creditors to pursue legal remedy as may be advised for recovery of their claim amount. 10. The Official Liquidator has filed a report in Company Scheme Petition No. 475 of 2010 stating therein that the affairs of the Transferor Company have been conducted in a proper manner and that the Transferor Company may be ordered to be dissolved. 11. From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is 5 not contrary to public policy. None of the parties concerned have come forward to oppose the Scheme. 12. Since all the requisite statutory compliances have been fulfilled, the Company Scheme Petition No. 475 of 2010; Company Scheme Petition No 476 of 2010 and Company Scheme Petition No 477 of 2010 are made absolute in terms of prayer clause (a) of the respective petitions. 13. The Petitioners 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 60 days from the date of order. 14. The Petitioners in all Petitions to pay costs of Rs.10,000/- each to the Regional Director and Petitioner in Company Scheme Petition No. 475 of 2010 to pay costs of Rs. 10,000/- to the Official Liquidator. 15. Costs to be paid within four weeks from today. 16. Filing and issuance of the drawn up order is dispensed with. 17. All authorities concerned to act on a copy of this order along with Scheme duly authenticated by the Company Registrar, High Court (O. S.), Bombay (S.J. KATHAWALLA, J)