THE HON’BLE Ms. JUSTICE G. ROHINI COMPANY PETITION No.164 OF 2010 Dated: 24.11.2010 Between : In the matter of Companies Act, 1956 (1 of 1956) And In the matter of Sections 391 and 394 of the said Act And In the matter of M/s. GVK Power (Jegurupadu) Private Limited With In the matter of M/s. GVK Industries Limited And Their Respective Shareholders M/s. GVK Power (Jegurupadu) Pvt. Limited, company Registered under the Companies Act and having its Registered office at 156-159, Paigah House, Sardar Patel Road, Secunderabad-500 003, Rep. by its Authorised Signatory Mr. T. Ravi Prakash … Petitioner/Transferor Company THE HON’BLE Ms. JUSTICE G. ROHINI COMPANY PETITION No.164 OF 2010 ORDER : M/s. G.V.K. Power (Jegurupadu) Private Limited (hereinafter referred to as ‘the Transferor Company) filed this petition with a prayer to sanction the Scheme of Amalgamation of the Transferor Company with M/s. G.V.K. Industries Limited (hereinafter referred to as ‘the Transferee Company’) under Sections 391 & 394 of the Companies Act, 1956. It is stated that the Transferor Company was originally incorporated under the name and style of M/s. Jegurupadu Power Plant Services Private Limited on 27.12.2001 in the in the State of A .P . Later on having changed its name as G.V.K. Power (Jegurupadu) Private Limited in terms of special resolution, dated 22.01.2008, the Transferor Company obtained fresh certificate of incorporation. Its registered office is situated at 156-159, Paigah House, Sardar Patel Road, Secunderabad and its authroized share capital is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each. The issued, subscribed and paid-up capital of the Transferor Company is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each fully paid up and the entire share capital is held by the Transferee Company and its nominee. The main objects of the Transferor Company is to carry on the business of operating and maintaining electric and all other kinds of Power Generation Projects, providing, operation and maintaining facilities relating to electric and all other kinds of power generations and etc., (morefully described in para-5 of the affidavit filed in support of the company petition). The Transferee Company was incorporated as a Public Limited Company under the name and style of M/s. G.V.K. Industries Limited under the Certificate of incorporation dated 18.06.1992. The present authorized share capital of the transferee company as on 31.03.2010 is Rs.350,00,00,000/- divided into 35,00,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid-up capital of the transferee company is Rs.262,00,00,000/- divided into 26,20,00,000 equity shares of Rs.10/- each. The main objects of the transferee company are to generate, harness, develop, accumulate, distribute and supply electricity by setting up Thermal Power Plants and etc., (morefully described in para-9 of the affidavit filed in the company petition). The audited balance sheets of both the Transferor Company and Transferee Company as on 31.03.2010 have been filed along with the Company Petition. It is stated that since both the Transferor and Transferee Companies are engaged in the similar line of activities, in order to have an integrated systematic approach and to function more effectively, it was proposed to re-organize and re-structure both the companies by amalgamation of subsidiary company with its holding company. Therefore the Board of Directors of both the Companies at their meetings held on 21.07.2010 approved the scheme of amalgamation of the Transferor Company with the Transferee Company w.e.f. 1.4.2010 subject to approval of the shareholders and confirmation by this Court. The salient features of the scheme of amalgamation have been specified in para-13 of the affidavit filed in support of the company petition. The Transferor Company filed Company Application No.670 of 2010 under Section 391 of the Companies Act for dispensation of convening of the meeting of the shareholders and the same was ordered by this Court by order dated 23.08.2010. Thereafter the present Company Petition has been filed by the Transferor Company with a prayer to sanction the scheme of amalgamation. By order dated 6.9.2010 this Court directed notice to the Regional Director, Ministry of Corporate Affairs, Chennai; the Official Liquidator, High Court of A.P., and the Registrar of Companies, A.P., Hyderabad and also ordered publication of notice in Business Standard and Andha Bhoomi, Hyderabad Editions. Accordingly, the notices were served and the paper publications were made and the petitioner filed proof of service into Court. Having received the notice, the Official Liquidator filed a report dated 28.09.2010 stating that the information and records were furnished did not reveal anything about pending litigation and prosecution either against or by the Transferor Company and its Directors and that the affairs of the Transferor Company did not appear to have been conducted in a manner prejudicial in the interest of its members or to the public interest. The Registrar of Companies, A.P., Hyderabad filed an affidavit dated 1.11.2010 stating as under : “The Transferee Company should pay the stamp duty wherever applicable as per the Regulations of the A.P. Stamp Act.” I have heard Sri V.S. Raju, the learned counsel for the petitioner as well as the learned Assistant Solicitor General appearing for the Registrar of Companies, A.P., Hyderabad; and Sri M. Anil Kumar, the learned Counsel for the Official Liquidator. So far as the only objection raised by Registrar of Companies with regard to payment of stamp duty is concerned, the learned counsel for the petitioner submitted that since the Transferor Company is a 100% subsidiary of the Transferee Company, no shares are being allotted and therefore the Transferee Company is not liable to pay any stamp duty. It is not disputed before this Court that the Transferor Company is 100% subsidiary of the Transferee Company and the entire share capital is held by the Transferee Company and its nominees. It is also relevant to note that no objections have been received opposing the proposed scheme of amalgamation, in response to the notice issued by way of publication in the newspapers. As noticed above, the Official Liquidator in his report stated that the affairs of the Transferor Company were not against public interest or the interest of its members. The record also shows that there are no creditors either secured or unsecured. Since the Transferor Company is 100% subsidiary of the Transferee Company and no shares are being allotted by the Transferee Company, as rightly submitted by the learned counsel for the petitioner no stamp duty is payable under Article 20 (d) of Schedule I-A of the Indian Stamp Act, 1899. Hence the objection raised by the Registrar of Companies is untenable. Having regard to the facts and circumstances noticed above and taking into consideration the fact that the scheme of amalgamation is not opposed to any provision of law or public interest, I am of the opinion that it is a fit case for granting sanction of the scheme of amalgamation as sought by the petitioner. Accordingly, the Company Petition is allowed and the Scheme of Amalgamation is approved. A copy of this order shall be filed before the Registrar of Companies within 30 days from the date of receipt of this order. _____________ G. ROHINI, J. Dt. 24.11.2010 gbs