1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO. 387 OF 2008 CONNECTED WITH COMPANY APPLICATION NO. 449 OF 2008 AJAY WIRE PRODUCTS PRIVATE LIMITED ... …Petitioner / First Transferor Company. WITH COMPANY PETITION NO.388 OF 2008 CONNECTED WITH COMPANY APPLICATION NO. 450 OF 2008 KAMDHENU WIRE PRIVATE LIMITED ... …Petitioner / Second Transferor Company WITH COMPANY PETITION NO.389 OF 2008 CONNECTED WITH COMPANY APPLICATION NO. 451 OF 2008 SHRIRAM WIRE PRIVATE LIMITED .... …Petitioner / Third Transferor Company WITH COMPANY PETITION NO.390 OF 2008 CONNECTED WITH COMPANY APPLICATION NO. 452 OF 2008 BEDMUTHA WIRE COMPANY LIMITED .... …Petitioner / Transferee Company. In the matter of the Companies Act, 1956 (1 2 of 1956); AND In the matter of Section 391 to 394 of the Companies Act, 1956; AND In the matter of Scheme of Amalgamation of AJAY WIRE PRODUCTS PRIVATE LIMITED, KAMDHENU WIRE PRIVATE LIMITED, and SHRIRAM WIRE PRIVATE LIMITED with BEDMUTHA WIRE COMPANY LIMITED Mr. Rajesh Shah i/b Rajesh Shah & Co. for the Petitioners. Mr. S. Ramakantha Dy. Official Liquidator in CP No. 387 to 389 of 2008. Mr.M.S. Bharadwaj i/b Mr. S.K. Mohapatra for Regional Director in C.P. No. 387 to 390 of 2008 CORAM: S. A. Bobde, J. DATE : 29th August , 2008 PC: 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 the Scheme of Amalgamation of AJAY WIRE PRODUCTS PRIVATE LIMITED, the First Transferor and KAMDHENU WIRE PRIVATE LIMITED, the Second Transferor Company and SHRIRAM WIRE PRIVATE LIMITED, the Third Transferor Company with BEDMUTHA WIRE COMPANY LIMITED, the Transferee Company . 3. Counsel appearing on behalf of the Petitioners has stated that 3 they have complied with all requirements as per directions of this Court and they have filed necessary affidavits of compliance in the Court. However, Petitioner Company also undertakes to comply with all statutory requirements if any, as required under the Companies Act, 1956 and the rules made there under. 4. The Official Liquidator has filed report in Company Petition Nos.387 to 389 of 2008 stating therein that the affairs of the Transferor Companies have been conducted in a proper manner and that the Transferor Companies may be ordered to be dissolved. 5. The Regional Director has filed Affidavit stating therein that the scheme is not prejudicial to the interest of creditors, shareholders and public. However, in paragraph 6 of his Affidavit, he has raised an objection stating that “the as per the Balance sheet as at 31/03/2007 of the Transferee Company there is a prima facie violation of section 295 of the Companies Act 1956 by the company and its directors because loans/advances have been given by the company to related parties of directors without previous approval of the Central Government in that behalf. Further the Transferee Company has entered into contracts specified in section 297 of the Act without obtaining the approval of the Central Government. The Registrar of Companies, Mumbai has been directed to take necessary penal action against the Transferee Company and its directors. Since above contraventions being the material facts of the affairs of the company and also effect the Corporate Governance of the public limited companies, the matter is submitted before this Hon’ble High Court for kind information ”. 5. Mr. Shah the Learned Counsel for the Petitioners states that Petitioner Company has already explained the above objection by his advocate letter dated 14th August, 2008 to office of the Regional Director and further shah pointed out that reliance is placed on this Hon’ble Court order in the matter of Lifeline Industries Limited, Company Petition No. 223 of 2008. In such circumstances, while clarifying that sanction to the scheme will not affect the 4 proceedings against the transferee company and its directors for the violation of the act/rules, so also, the consequences for their acts of omission and commission flowing therefrom, the scheme of amalgamation is sanctioned. 7. There is no objection to the Scheme, save and except as stated in paragraph 5 and since all the requisite statutory compliances have been fulfilled, Company Petition No. 387 of 2008, 388 of 2008 and 389 of 2008 filed by the Transferor Companies is made absolute in terms of prayer clauses (a) to (j). Company Petition No. 390 of 2008 filed by the Transferee Company is made absolute in terms of prayer clauses (a) to (k) 8. The Petitioner Companies to lodge a copy of this order and the Scheme with the concerned Superintendent of Stamps for the purpose of adjudication of stamp duty payable, if any, on the same within 30 days of obtaining the certified copy and/or an authenticated copy of the order. 9. The Petitioners in all the Company Petitions to pay cost of Rs.7500/- each to the Regional Director in all the Petitions and to the Official Liquidator by the petitioner in the Company Petition Nos. 387 of 2008, 388 of 2008, 389 of 2008 filed by the Transferor Companies. Costs to be paid within four weeks from today. 10. Filing and issuance of the drawn up order is dispensed with. 11. All authorities concerned to act on a copy of this order along with Scheme duly authenticated by the Company Registrar , High Court, Bombay. (S. A. Bobde, J.)