IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY SCHEME PETITION NO 174 OF 2010 CONNECTED WITH COMPANY SUMMONS FOR DIRECTIONS NO. 168 OF 2010 RELIANCE EQUITIES INTERNATIONAL PRIVATE LIMITED …………Petitioner / the Demerged Company In the matter of the Companies Act, 1956 (1 of 1956); AND In the matter of Sections 391 to 394 read with sections 78, 100 to 103 of the Companies Act, 1956. AND In the matter of Scheme of Arrangement between Reliance Equities International Private Limited (“REIPL” or “the Demerged Company”) AND Quant Broking Private Limited (“QBPL” or “the Resulting Company”) AND Their respective shareholders and creditors Mr. Rajesh Shah i/b M/s. Rajesh Shah & Co., Advocates for the Petitioners. Mr. M.S.Bharadwaj i/b S.K. Mohapatra, Advocate for Regional Director in both Petitions. CORAM: S. J. Vazifdar, J. DATE: 11th June, 2010 PC: 1. Heard learned counsels for the parties. 2. The sanction of the Court is sought under Sections 391 to 394 read with sections 78, 100 to 103 of the Companies Act, 1956, to the Scheme of Arrangement between Reliance Equities International Private Limited (“the Demerged Company”) and Quant Broking Private Limited (“the Resulting Company”) and their respective Shareholders and Creditors . 3. Counsel appearing on behalf of the Petitioners has stated that they have complied with all 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 there under. The said undertaking is accepted. 2 4. The Regional Director has filed Affidavit stating therein that save and except as stated in paragraph 6 of the said Affidavit, the scheme does not appear to be prejudicial to the interest of shareholders and public. 5. The Counsel appearing for the Regional Director has drawn my attention to paragraph 6 of the affidavit of the Regional Director which states as under: “ (a) That the registered office of the Resulting Company is situated in the State of Tamil Nadu. Hence, the Resulting Company has to file similar petition before the Hon’ble High Court of Judicature at Madras for approving the Scheme. (b) It is stated in Clause No. 12.1(b) of the Scheme, that the order of the Hon’ble High Court approving the Scheme shall be filed with the respective Registrar of Companies. In this regard, it is submitted that the registered office of the Resulting Company is situated at Coimbatore, therefore the Resulting Company has to file relevant Form No. 21 with “Registrar of Companies, 3 Tamil Nadu at Coimbatore” instead of Registrar of Companies, Tamil Nadu at Chennai. (c) It is submitted that Clause No 5.1.3 of the Scheme, provides for creation of General Reserve. In this regard it is submitted that the Resulting Company shall not utilize such General Reserve for the purpose of declaring dividend in future, to this extent the Demerged Company shall ensure the same by the Resulting Company. 6. In this regard Advocates for the Petitioner tendered an affidavit dated 9th day of June, 2010, of the Petitioner Company in reply to the above observations made by the Regional Director and wherein the Petitioner dealt with all the said objections as under: (a) With respect to paragraph 6(a) of the Regional Director’s Affidavit, the Petitioner Company has submitted that the Resulting Company has already filed similar Company Petition No. 70 of 2010 with the High Court of Judicature at Madras which is pending for final hearing. 4 (b) With respect to paragraph 6(b) of the Regional Director’s Affidavit, the Petitioner Company in paragraph 5 of its affidavit, has undertaken the Resulting Company would file the relevant Form No. 21 along with the order of the Hon’ble High Court approving the Scheme with the Registrar of Companies, Tamil Nadu at Coimbatore and accordingly the Scheme would be modified to that extent. Accordingly the Scheme stands modified to that extent. (c) With regard to paragraph 6(c) of the Regional Director’s Affidavit, the Petitioner Company in paragraph 7 of its affidavit, has undertaken that the General Reserve arising in the books of Resulting Company pursuant to the Scheme shall not be utilized for the purpose of declaring the dividend in future. 7. From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy. None of the parties concerned has come forward to oppose the Scheme. 5 8. Since all the requisite statutory compliances have been fulfilled, Company Scheme Petition Nos. 174 of 2010, filed by the Demerged Company is made absolute in terms of prayer clauses (a) to (d) subject to Scheme being sanctioned by the High Court of Madras. 9. The Petitioner Companies to lodge a copy of this order and the Scheme, duly authenticated by the Company Registrar, High Court, 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 receipt of the Order. 10. The Petitioner in the Company Scheme Petition to pay costs of Rs.7,500/- each to the Regional Director, Western Region, Mumbai. Costs to be paid within four weeks from today. 11. Filing and issuance of the drawn up order is dispensed with. 12. All concerned authorities to act on a copy of this order along with Scheme duly authenticated by the Company Registrar, High Court, Bombay. (S. J. Vazifdar, J.) 6