IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY SCHEME PETITION NO.307OF 2011 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.661 OF 2010 In the matter of the Companies Act of 1956; AND In the matter of Sections 391 to 394 of the Companies Act, 1956; AND In the matter of Scheme of Demerger between – Fleet Fastners Private Limited (the Petitioner Company) And Fleet Estates Private Limited (the Resulting Company) And their respective shareholders and Creditors FLEET FASTNERS PRIVATE LIMITED ...Petitioner / Transferor Company WITH COMPANY SCHEME PETITION NO.308 OF 2011 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.662 OF 2010 Fleet Estates Private limited ...Petitioner / Transferee Company CORAM: S. C. Dharmadhikari, J. Date: 23rd December, 2011. Mrs. Beena Pillai i/b. M/s. D.M. Harish & Co. Advocates for the Petitioner Company in both Petitions. Mr.C.J Joy and Ms. Soma Singh i/b Mr. H. P. Chaturvedi for Regional Director in both Petitions. P.C.: 1. Heard learned counsel for the Petitioner. 2. The sanction of the Court is sought under Sections 391 to 394 of the Companies Act, 1956 to a Scheme of Demerger between Fleet Fastners Pvt. Ltd., the Transferor Company and Fleet Estates Pvt. Ltd., the Transferee Company. 3. Counsel appearing on behalf of the Petitioner has stated that the Petitioners have complied with all the requirements as per directions of the Court and they have filed necessary affidavits of compliance in the Court. Moreover, the 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. 4. The Regional Director has filed his Affidavit stating therein that save and except as stated in paragraph 6 of the said Affidavit, it appears that the Scheme is not prejudicial to the interests of the shareholders and public. In paragraph 6 of the said Affidavit, it is stated that:- “(a) In clause 32(b)(iii) of the Scheme, it is stated that the excess of the net assets over the face value of new equity shares in accordance with clause 23(a) of the scheme shall be credited to the General Reserve Account in the books of the Transferee Company. In this connection it is submitted that the Reserve arising out of this scheme shall not be utilized for the purpose of declaring dividend by the Transferee Company in future. “(b) In clause 32(a) (i) of the scheme, last five lines starting from “thereafter the balance shall be debited to the Share Premium Account in accordance with the provisions of Section 100 of the Act and the balance, if remaining thereafter, would be adjusted against the General Reserve Account” shall be deleted as the said wordings in the said clause are redundant, in as much as clause 23(b) of the scheme provides for reduction of paid up capital alone and no reduction is made in securities premium account. “(c) Consequent to deletion of words in clause 32(a)(i), it is necessary that in clause 32(a)(ii) of the scheme, in the second line and last line of the said clause the words “and Share Premium Account” be deleted.” 5. As far as the objections raised in 6(a) of the Affidavit of the Regional Director is concerned, the Petitioner Companies through its Counsel undertake that the reserve arising out of the Scheme shall not be utilized for the purposes of declaring dividend by the Transferee Company in future. The said undertaking is accepted. 6. So far as the objections raised by the Regional director in paragraphs 6(b) and 6(c) of his Affidavit are concerned, the Counsel for the Petitioner seeks leave of this Court to delete last five lines in Clause 32(a)(i) of the Scheme and the word “and Share Premium Account” appearing in the second line of the Scheme as mentioned in the aforesaid paragraphs of the Affidavit of the Regional Director. Leave to amend is granted. Amendment to be carried out within three weeks from today. 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. 8. Since all the requisite statutory compliances have been fulfilled, both the Company Scheme Petitions are made absolute in terms of prayers clauses (a) to (d) and (f). 9. The Transferee Company 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 the order. 10. The Petitioners in both the Petition to pay costs of Rs.10,000/- each to the Regional Director, Western Region, Mumbai. Costs to be paid within four weeks from today. 11. The Petitioner Companies to file a copy of this order along with a copy of the Scheme with the Registrar of Companies, electronically along with E-Form 21 in addition to the physical copy within 30 days from the date of issuance of the order by the Registry. 12. Filing and issuance of the drawn up order is dispensed with. 13. All concerned authorities to act on a copy of this order with Scheme duly authenticated by the Company Registrar, High Court, Bombay. (S. C. Dharmadhikari, J.)