HONOURABLE SRI JUSTICE G.V.SEETHAPATHY COMPANY PETITION Nos.90 OF 2010 & 91 of 2010 Dated 19-7-2010 C.P.No.90 OF 2010: Globarena Web Technologies Private Limited, a company incorporated under the Companies Act, 1956 and having its registered office at 144, Akash Ganga, 1st Floor, Srinagar Colony, Hyderabad-500 073 represented by its authorized signatory, Mr. VLN Madhsudhan, s/o. Sri VL Narasimha Charyulu, aged 66 years, resident of Hyderabad. …Petitioner company/(Transferor Company). C.P.No.91 OF 2010: Globarena Web Technologies Private Limited, a company incorporated under the Companies Act, 1956 and having its registered office at 144, Akash Ganga, 1st Floor, Srinagar Colony, Hyderabad-500 073 represented by its authorized signatory, Mr. A.V.Narayana, s/o. Sri A.Kotaiah, aged 61 years, resident of Hyderabad. …Petitioner company/(Transferee Company). HONOURABLE SRI JUSTICE G.V.SEETHAPATHY COMPANY PETITION Nos.90 OF 2010 & 91 of 2010 COMMON ORDER: These two appeals have been filed under Sections 391 to 394 read with Sections 78, 100 to 103 of the Companies Act, 1956 and Rule 79 of the Companies (Court) Rules, 1959 seeking sanction to the proposed scheme of amalgamation of the transferor company to the transferee company. C.P.No.90 of 2010 is filed by M/s. Globarena Web Technologies Private Limited (hereinafter referred to as transferor Company) and C.P.91 of 2010 is filed by M/s. Globarena Web Technologies Private Limited (hereinafter referred to as Transferee company.) Heard the learned counsel for the applicants/petitioners and the learned Assistant Solicitor General representing the Registrar of Companies and the learned Counsel representing Official Liquidator attached to this Court. Transferor company was incorporated on 3-7-2000 as a private limited company under the provisions of Companies Act, 1956 in the name of Globarena Iteknowledge, Private Limited and subsequently, the name was changed to present name with effect from 23-11-2004 and its Registered office is situated at Srinagar Colony, Hyderabad. Transferor Company is engaged in the business of designing and development of system and application software. Its main objects are as follows: 1. To undertake the designing and development of system and application software either for its own use or for sale in India or for export outside India and to design and develop such system and application software for or on behalf of the manufacturers owners and users of computer system and digital electronic equipments in India or elsewhere in the world. 2. To design and develop software to be used in Internet, E-Commerce and Web enabled business. The objects of the company are set out in detail in the Memorandum of Articles of Association. The transferee company is also engaged in the business of manufacture of Computer Hardware and design and development of system and application software and the main objects of transferee company are also stated in the Memorandum of Articles of Association and are extracted in the petition and they are not reiterated here for the sake of brevity. The authorized capital of the transferor company as on 31- 3-2009 was Rs.1,00,00,000/- divided into Rs.10,00,000/-the equity shares of Rs.10/- each. The issued, subscribed and paid-up share capital of the transferor company as on 31-3-2009 was Rs.88, 32, 360/- divided into Rs.8,83,236/- equity shares of Rs.10/- each fully paid up. The authorized share capital of transferee company as on 31-3-2009 is Rs.3,50,00,000/- divided into Rs.35,00,000/- equity shares of Rs.10/- each. . The issued, subscribed and paid-up share capital of the transferee company as on 31-3-2009 is Rs.3,06,00,000/- divided into thirty lakhs sixty thousand equity shares of Rs.10/-each, fully paid up. It is proposed to amalgamate the transferor company with the transferee company as both are engaged in similar business of design and development of system and applications software and the proposed amalgamation will lead to optimum utilization of the available resources and development. It is also stated that the proposed amalgamation will substantially increase the turn over and would not affect the employees of the transferor and transferee company in any manner and it is also in the interest of both the companies and their shareholders, employees and all the concerned. The salient features of benefits of the proposed scheme of amalgamation are set out in the scheme annexed to the petition and also extracted in the petition and the same is not reiterated here for the sake of brevity. It is stated that the Board of Directors of the two companies at their respective meetings held on 5-11-2009 approved the proposed scheme subject to the approval by the shareholders and sanction of this Court. In the transferor company, there are eight shareholders and out of them, seven shareholders holding 99.34% shares in value gave their consent by way of affidavits which are placed on record. The Transferor Company filed C.A.No.2105 and 2106 of 2009 seeking to dispense with the meeting of equity shares and unsecured creditors. This Court by order dated 18-1-2010 allowed the said applications and dispensed with the meeting of the equity shareholders and unsecured creditors of the transferor company, in view of the fact that majority of the shareholders i.e., 7 out of 8 holding 99.34% of the shareholders gave their consent by way of affidavits and the sole unsecured creditor M/s J.B. Reddy & Company also have given their consent by way of a letter. It is stated that the transferor company has no secured creditors. In the Transferee company, it is stated that there are 12 shareholders and out of them, 11 share holders holding 98.2% of the shares value have given their consent by way of affidavits. Earlier the transferee company filed C.A.Nos.2107 and 2108 and 2109 of 2009 seeking dispensing with the meetings of the equity shareholders, secured creditors and unsecured creditors. This Court by order dated 18-1-2010 allowed the said applications and dispensed with the meetings as the majority of the shareholders i.e., 11 out of 12 gave their consent for the proposed scheme by way of affidavits and the two secured creditors and four unsecured creditors have given their consent by way of letters and the transferee company has undertaken to file letters of the consent from the secured creditors. Learned Counsel for the petitioner has filed the letters stating no objections from the secured creditors in HDFC Bank and ICICI Bank. At the time of admitting the petition on 30-4-2010, this Court directed issuance of notice to the Regional Director, Ministry of Corporate Affairs, Sastry Bhavan, Chennai and also to the Official Liquidator and also General notice by way of publication in Indian Express, (English Daily Newspaper), Hyderabad Edition, and Andhra Jyothi (Telugu Daily Newspaper) Hyderabad Edition. In response to the said notice, the learned Assistant Solicitor General representing Registrar of Companies filed common affidavit stating that they have no objection to the proposed scheme of amalgamation. Learned Counsel representing Official Liquidator filed a report in OLR 280 of 2010 stating that on examination of the information and records furnished, it appears that the affairs of the transferor company do not appear to have been conducted in a manner prejudicial to the interest of its members. It is also stated that that auditors have not made any adverse remarks in the report and annexure to the balance sheet as on 31-3-2009 and the scheme of amalgamation has taken due care for protecting the services of permanent employees of the company. No objections have been raised in response to the general notice issued by way of publication in the newspapers. In the circumstances, in view of the fact that the two companies are engaged in similar business of design and development of system and application software and shareholders of both the companies have approved the proposed scheme of amalgamation which is stated to be for the benefit of the two companies and the interest of the shareholders and the creditors and the employees are not affected in any manner and the Board of Directors of the two companies have approved the proposed scheme and majority of the shareholders also gave their consent and the creditors of two companies also stated no objection by way of letters and the Central Government and the Official Liquidator also having stated no objection to the proposed scheme and no objection having been received in response to the general notice, it is considered that the proposed scheme of amalgamation can be sanctioned and the same is accordingly sanctioned with effect from appointed date i.e., 1.4.2009. Consequently, the transferor company shall stand dissolved without going through the process of winding up with effect from the appointed date i.e., 1.4.2009. Copy of this order shall be filed before the Registrar of Companies within 30 days from the date of receipt of this order for the purpose of registration and for necessary follow-up action. In the result, both the Company petitions are allowed as stated above. The petitioner shall pay Rs.3,000/- to the Assistant Solicitor General towards costs. ____________________________________ Justice G.V.SEETHAPATHY Dated 19-7-2010. Dvs HONOURABLE SRI JUSTICE G.V.SEETHAPATHY COMPANY PETITION Nos.90 OF 2010 & 91 of 2010 Dated 19-7-2010