THE HON'BLE Ms. JUSTICE G.ROHINI Company Petition Nos. 154, 155 and 156 of 2010 Dated: 29.12.2010 Company Petition No.154 of 2010 Between: M/s. Rain Commodities Limited, … petitioner company Company Petition No.155 of 2010 M/s. Rain CII Carbon (Vizag) Limited … petitioner company Company Petition No.156 of 2010 M/s. Rain CII Carbon (India) Limited ..... Petitioner Company THE HON’BLE Ms. JUSTICE G.ROHINI Company Petition Nos. 154, 155 and 156 of 2010 COMMON ORDER: These petitions are filed by M/s. Rain Commodities Limited, M/s. Rain CII Carbon (Vizag) Limited and M/s. Rain CII Carbon (India) Limited respectively under Section 391 to 394 of the Companies (Court) Rules, 1959 for sanction of the Scheme of Arrangement between the applicant companies. The petitioner in C.P.No.154 of 2010 is M/s Rain Commodities Limited (for short “RCOL”). The said company was incorporated on 15.03.1974 under the provisions of the Companies Act, 1956. The registered office of RCOL is situated at “Rain Center” 34, Srinagar Colony, Hyderabad–500083, Andhra Pradesh. The authorized share capital of RCOL as on 07.08.2010 is Rs.167,00,00,000 divided into 11,80,00,000 equity shares of Rs.10 each and 49,00,000 redeemable preference shares of Rs.100 each. The issued, subscribed and paid up share capital of RCOL is Rs.70,83,45,790 divided into 7,08,34,579 equity shares of Rs.10 each. The main objects of the said company as set out in the memorandum of association are mentioned in para 5 of C.P.No.154 of 2010. The petitioner in C.P.No.155 of 2010 is M/s. Rain CII Carbon (Vizag) Limited (for short “RCCVL”). The said company was incorporated under the provisions of the Companies Act, 1956 on the 23rd day of April, 2008 under the provisions of the Companies Act, 1956. The registered office of RCCVL is situated at “Rain Center”, 34, Srinagar Colony, Hyderabad-500073, Andhra Pradesh. The Authorised share capital of RCCVL as on 07.08.2010 is Rs.10,00,00,000 divided into 1,00,00,000 equity shares of Rs.10 each. The issued, subscribed and paid up share capital of RCCVL is Rs.7,18,00,000 divided into 71,80,000 equity shares of Rs.10 each. The main objects of the said company as set out in the memorandum of association are mentioned in para 5 of C.P.No.155 of 2010. The petitioner in C.P.No.156 of 2010 is M/s. Rain CII Carbon (India) Limited(for short “RCCIL”). The said company was incorporated under the provisions of the Companies Act, 1956 on the 4th day of May, 1999 under the provisions of the Companies Act, 1956. The Registered Office of RCCIL is situated at “Rain Center”, 34, Srinagar Colony, Hyderabad-500 073, Andhra Pradesh. The authorised share capital of RCCIL as on 07.08.2010 is Rs.50,00,00,000 divided into 5,00,00,000 equity shares of Rs.10 each. The issued, subscribed and paid up capital is Rs.29,80,50,000 divided into 2,98,05,000 equity shares of Rs.10 each. The main objects of the said company as set out in the memorandum of association are mentioned in para 5 of C.P.No.156 of 2010. It is stated that a Scheme of Arrangement has been proposed by the applicant companies for the demerger of Cement Business Undertaking of RCOL to RCCIL and the demerger of Calcined Petroleum Coke and Power Business Undertaking of RCCIL into RCCVL on going concern basis. There was also a proposal for demerger of Moonglow Company Business Inc., with RCOL and a consequent reduction of share capital and/or securities premium of RCCIL. Accordingly, the Board of Directors of all the three companies in the respective meetings held on 18.05.2010, 17.05.2010 and 13.05.2010 respectively approved the said Scheme of Arrangement subject to the approval of the shareholders, creditors and confirmation by this Court. The petitioner in C.P.No.154 of 2010 filed C.A.No.481 seeking to convene the meeting of the shareholders and the same was ordered by this Court on 22.06.2010. Pursuant to the directions of this Court, notices were issued to the shareholders and the meeting was attended by 146 shareholders and all of them participated in the poll and voted in favour of the resolution approving the Scheme of Arrangement. By order dated 22.06.2010 made in C.A.No.482 of 2010, this Court had dispensed with the meeting of the secured creditors upon an undertaking given by the petitioner that the consent letters would be sent to the secured creditors along with the company petitions. So far as unsecured creditors of the petitioner in C.P.No.154 of 2010 are concerned, the petitioner filed C.A.No.483 of 2010 and the same was ordered by this Court dispensing with the meeting of the unsecured creditors of the company making it clear that in the event of any objection from the unsecured creditors requiring a meeting of the unsecured creditors, the order passed dispensing with the unsecured creditors would stand cancelled. So far as C.P.No.155 of 2010 is concerned, this Court by order dated 22.06.2010 in C.A.Nos.484 and 485 of 2010 dispensed with the meeting of the equity shareholders as well as the secured creditors and unsecured creditors. Similarly, by order dated 22.06.2010 passed by this Court in C.A.Nos.490, 491 and 492 of 2010 meeting of the equity shareholders, unsecured creditors and the secured creditors of the petitioner company in C.P.No.156 of 2010 was also dispensed with. Accordingly, these three petitions have been filed seeking sanction of the above said Scheme of Arrangement between the RCOL, RCCVL, RCCIL and Moonglow Company Business Inc. In response to the notice ordered by this Court, the Registrar of Companies, A.P., Hyderabad filed a common affidavit in all the company petitions raising the following objections: (a) As M/s. Moonglow Company Business Inc., is a company incorporated under the BVI Business Companies Act, 2004 having register office in British Virgin Islands, the scheme may be sanctioned subject to the sanction of the scheme by the appropriate authorities under the prevailing laws in respect of the aforesaid company in that country. (b) The transferee company should pay the Stamp Duty wherever applicable as per the Regulations of Andhra Pradesh Stamp Act. (c) As M/s. Moonglow Company Business Inc., is a foreign entity and wholly owned subsidiary of M/s. Rain Commodities Limited, necessary approvals of RBI and FEMA, if any required, have to be obtained. The permission sought by the petitioner companies for amalgamation was declined by the Reserve Bank of India also on the ground that Moonglow Company Business Inc., was a company incorporated in the British Virgin Islands. In the circumstances, as per the resolutions passed by the Board of Directors of the petitioner companies in the meetings held on 03.11.2010, 02.11.2010 and 01.11.2010 respectively, part iv of the Scheme and the other portions relating to amalgamation of Moonglow Company Business Inc., were deleted. The petitioners also filed C.A.Nos. 1547, 1548 and 1549 of 2010 in C.P.Nos. 154, 155 and 156 of 2010 respectively seeking permission to delete the said portions from the Scheme and the said applications were allowed by this Court. I have heard Sri S.Ravi, learned senior counsel appearing for the applicant companies, and perused the material placed before this Court including the modified Scheme of Arrangement and the resolutions passed by the Board of Directors of the petitioner companies according consent to the modified scheme and to undertake the same with effect from 01.04.2010. I have also heard the learned Assistant Solicitor General of India, who submitted that there is no objection for sanction of the modified Scheme of Arrangement. Having regard to the facts and circumstances noticed above, particularly in view of the fact that despite notice of admission of these company petitions by paper publication, no objections whatsoever have been received from any quarter, and that the Scheme of Arrangement, apart from being in the best interest of the petitioner companies and their respective shareholders and creditors is not opposed to any provision of law or public interest, I do not find any impediment for granting the sanction for the proposed Scheme of Arrangement. Accordingly, the Scheme of Arrangement as modified is hereby sanctioned and it is declared that the same is binding on all the shareholders, creditors and employees of the petitioner companies. The parties to the Scheme of Arrangement or other persons interested shall be at liberty to apply to this court for any direction that may be necessary in regard to the working of the Scheme of Arrangement. A certified copy of this order shall be filed before the Registrar of Companies within 30 days from the date of receipt of this order. All the company petitions are accordingly allowed. No costs. _____________ G. ROHINI, J Date: 29.12.2010 KLP