1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY SCHEME PETITION NO.545 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.584 OF 2010 Balabheem Investment and Trading ....Petitioner/the First Company Private Limited Transferor Company AND COMPANY SCHEME PETITION NO.546 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.585 OF 2010 Jagatguru Investment and Trading ....Petitioner/the Second Company Private Limited Transferor Company AND COMPANY SCHEME PETITION NO.547 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.586 OF 2010 Varali Investment and Trading ....Petitioner/the Third Company Private Limited Transferor Company AND COMPANY SCHEME PETITION NO.548 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.587 OF 2010 Multilayer Films Limited ....Petitioner/ the Demerged/ Transferor Company AND COMPANY SCHEME PETITION NO.549 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.588 OF 2010 2 Boon Investment and Trading ....Petitioner/the First Company Private Limited Transferee/Resulting Company AND COMPANY SCHEME PETITION NO.550 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.589 OF 2010 Jovial Investment and Trading ....Petitioner/the Second Company Private Limited Transferee/Resulting Company AND COMPANY SCHEME PETITION NO.551 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.590 OF 2010 Venktesh Investment and Trading ....Petitioner/the Third Company Private Limited Transferee Company In the matter of the Companies Act I of 1956. AND In the matter of Sections 391 to 394 read with sections 100 to 103 of the Companies Act, 1956. AND In the matter of the Composite Scheme of Arrangement between Balabheem Investment and Trading Company Private Limited. AND Jagatguru Investment and Trading Company Private Limited. AND 3 Varali Investment and Trading Company Private Limited. AND Multilayer Films Limited. AND Boon Investment and Trading Company Private Limited. AND Jovial Investment and Trading Company Private Limited. AND Venktesh Investment and Trading Company Private Limited. Mr.Hemant Sethi i/b Hemant Sethi & Co, Advocates for Petitioner in all Petitions. Dr. T. Pandian, Deputy Official Liquidator in Company Scheme Petition No.545 of 2010 to 548 of 2010. Ms.Purnima Awasthi.and Mr.Abhijit Desai i/b Mr.S.K.Mohapatra for Regional Director in all Petitions. CORAM : S. J. KATHAWALLA,J DATE : 22nd OCTOBER, 2010 PC: 1. Heard learned counsel for parties. 2. The sanction of the Court is sought under Sections 391 to 394 read with sections 100 to 103 of the Companies Act, 1956 to the Composite Scheme of Arrangement between Balabheem Investment and Trading Company Private Limited, the First Transferor Company and Jagatguru Investment and Trading Company Private Limited, the Second Transferor Company and Varali Investment and Trading Company Private 4 Limited, the Third Transferor Company and Multilayer Films Limited, the Demerged/Transferor Company and Boon Investment and Trading Company Private Limited, the First Transferee/Resulting Company and Jovial Investment and Trading Company Private Limited, the Second Transferee/Resulting Company and Venktesh Investment and Trading Company Private Limited, the Third Transferee Company. 3. This Composite Scheme of Arrangement is presented for:- (a) Amalgamation of Balabheem Investment and Trading Company Private Limited with Boon Investment and Trading Company Private Limited. (b) Amalgamation of Jagatguru Investment and Trading Company Private Limited with Jovial Investment and Trading Company Private Limited. (c) Amalgamation of Varali Investment and Trading Company Private Limited with Venktesh Investment and Trading Company Private Limited. (d) Demerger of Specified Investment Division of Multilayer Films Limited into Boon Investment and Trading Company Private Limited. (e) Demerger of Specified Investment Division of Multilayer Films Limited into Jovial Investment and Trading Company Private Limited. 5 (f) Amalgamation of Residual Division of Multilayer Films Limited with Venktesh Investment and Trading Company Private Limited. (g) Reduction and reorganisation of Share Capital of Boon Investment and Trading Company Private Limited,Jovial Investment and Trading Company Private Limited and Venktesh Investment and Trading Company Private Limited. 4. Counsel appearing on behalf of the Petitioners have stated that they have complied with all the requirements as per directions of this Court and they have filed necessary affidavits of compliance in the Court. Moreover, Petitioner Companies undertake to comply with all statutory requirements, if any, as required under the Companies Act, 1956 and the rules made thereunder. The undertaking is accepted. 5. The Regional Director has filed affidavit stating therein that save and except as stated in paragraphs 6(a) to (d) of the said affidavit, the scheme does not appear to be prejudicial to the interest of shareholders and public. In paragraphs 6(a) to 6(d) of the said affidavit, the Regional Director has stated that: 6 (a) All the Three Transferor Companies (Balabheem, Jagatguru, Varali) are Non Banking Finance Companies. Hence all these Three Transferor Companies may be directed to file the copy of the order of this Hon'ble High Court on their respective petitions with Reserve Bank of India within 30 day’s from the date of the order of this Hon’ble High Court, sanctioning the present scheme of arrangement. (b) Clause 55 of the scheme provides for reclassification and increasing authorized share capital of the Transferee/Resulting Companies (Boon, Jovial and Venktesh). In this connection the Transferee / Resulting Companies 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 fee and stamp duty as applicable on the said forms. (c) Clause 54 of the scheme provides for combination of authorised share capital of First, Second and Third Transferor Companies with First, Second, Third Transferee Companies respectively. This clause also provides for merging of authorized share capital of the Demerged Company viz., Multilayer Films Limited to all the Three Transferee 7 Companies (Boon, Jovial and Venktesh) in equal share (1/3rd of authorised share capital of MFL/Demerged Company).In this regard, it is respectfully submitted that Part G of the scheme provides for amalgamation of residual undertaking of MFL with Venktesh (Third Transferee Company). Therefore it is respectfully suggested that the authorised share capital of MFL may be merged only with Venktesh (Third Transferee/Resulting Company) in toto. (d) Clause No.50 of the scheme provides for reduction and reorganization of paid up share, capital of all the Three Transferee Companies (Boon, Jovial and Venktesh) from Rs 2,00,00,000/-to Rs 50,00,000/-. In this regard it is respectfully submitted that, the present authorised share capital amounting to Rs 2,00,00,000/- have already been fully utilised for issue of equity share capital by the respective Transferee Companies. Therefore, present reduction in the paid up capital will not permit the company to issue further shares from the existing authorised share capital in future. In this connection the Transferee Companies may be directed to give an undertaking to that extent. 8 6. In so far as the objection of the Regional Director as stated in paragraph 6(a) of his affidavit is concerned, the Petitioners through their counsel undertakes that the Three Transferor Companies shall file a copy of the order passed by this Court with the Reserve Bank of India within 30 days from the date of order. The said undertaking is accepted. 7. So far as the objection of the Regional Director as stated in paragraph 6(b) of his affidavit is concerned, the Petitioner through their Counsel undertakes that the Transferee/ Resulting Companies shall comply with the provisions of Sections 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 for reclassification and increase in authorised share capital. The said undertaking is accepted. 8. So far as the objection of the Regional Director as stated in paragraph 6(c) of his affidavit is concerned, the Petitioner through their Counsel submits that the authorised share capital of Multilayer Films Limited will be merged only with Venktesh Investment and Trading Company Private Limited, the Third Transferee Company instead of clubbing the authorised share capital in one third part in each of the Transferee/ Resulting Companies i.e Boon Investment and 9 Trading Company Private Limited,Jovial Investment and Trading Company Private Limited and Venktesh Investment and Trading Company Private Limited as provided in Clause 54 of the Scheme. Consequently, the Scheme needs to be modified to the said extent. In view thereof, the counsel for the Petitioners seeks leave of this court to amend clauses 54.1 to 54.7 of the Scheme in terms of the Schedule handed in,which is taken on record and marked ”X” for identification. Leave to amend is granted. Amendment to be carried out within two weeks from the date of this order. 9. So far as the query raised by the Regional Director in paragraph 6(d) of his affidavit is concerned, the Petitioner through their Counsel submits that the Transferee/ Resulting Companies will not utilise the present reduced capital to issue further shares from the existing authorised share capital in future. The said undertaking is accepted. 10. The Official Liquidator has filed a report in Company Scheme Petition Nos.545 of 2010 to 548 of 2010 stating 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. 11. From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of 10 law and is not contrary to public policy. None of the parties concerned have come forward to oppose the Scheme. 12. There is no objection to the Scheme, save and except as stated in paragraphs 5 to 9 above, and since all the requisite statutory compliances have been fulfilled the Composite Scheme of Arrangement deserved to be sanctioned. Hence, Company Scheme Petition Nos.545 of 2010 to 548 of 2010 filed by the Transferor/Demerged Companies are made absolute in terms of prayer clauses (a) to (d) of the respective Petition and Company Scheme Petition Nos. 549 of 2010 to 551 of 2010 filed by the Transferee/Resulting Companies are made absolute in terms of prayer clauses (a) to (f) of the respective Petition. 13. The Petitioner Companies 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 this Order. 14. The Petitioner in all the Company Scheme Petitions to pay costs of Rs.10,000/- each to the Regional Director, Western Region, Mumbai. The Petitioner in Company Scheme Petition Nos.545 of 2010 to 548 of 2010 to pay a sum of Rs 10,000/- 11 each to the Official Liquidator, High Court, Bombay,towards his costs. Costs to be paid within four weeks from today. 15. Petitioners in Company Scheme Petition Nos. 549 of 2010 to 551 of 2010 to publish a notice of registration of order and form of minutes of reduction of capital by Registrar of Companies once each in the two local newspaper, viz, “The Free Press Journal” in English and “Maharashtra Times” in Marathi both circulating in Mumbai and also in the Maharashtra Government Gazette within 30 days of registration as aforesaid. 16. Filing and issuance of the drawn up order is dispensed with. 17. All concerned authorities to act on a copy of this order along with scheme (in case of Company Scheme Petition Nos.545 of 2010 to 551 of 2010) and form of minutes (annexed to Company Scheme Petition Nos.549 of 2010 and 550 of 2010 being Exhibit “E”) and form of minutes (annexed to Company Scheme Petition No.551 of 2010 being Exhibit “S”) duly authenticated by Company Registrar, High Court, (O.S) Bombay. (S. J. KATHAWALLA , J )