IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY SCHEME PETITION NO.14 OF 2010 CONNECTED WITH COMPANY APPLICATION NO.1260 OF 2009 Enkei Castalloy Limited........Petitioner/Demerged Company COMPANY SCHEME PETITION NO.15 OF 2010 CONNECTED WITH COMPANY APPLICATION NO.1261 OF 2009 Enkei Wheels (India) Limited.......Petitioner/Resulting Company In the matter of the Companies Act I of 1956 AND In the matter of Section 391 to 394 read with sections 78,100 to 103 of the Companies Act, 1956. AND In the matter of the Scheme of Arrangement between Enkei Castalloy Limited and Enkei (Wheels) India Limited. Mr.Hemant. Sethi i/b Hemant Sethi & Co. Advocates for Petitioner. Mr.C.J.Joy with Mr.S.K.Mohapatra for Regional Director in both the Petitions. Mr.Dipak.Khilari i/b Chetan.N.Mehta Advocates for Real Technologies, Creditor. CORAM : S. J. KATHAWALLA. J DATE : 26th FEBRUARY,2010 PC: 1. Heard learned counsel for parties. 2. The sanction of the Court is sought under Sections 391 to 394 read with Sections 78,100 to103 of the Companies Act, 1956 to the Scheme of Arrangement between Enkei Castalloy 2 Limited, the Demerged/Transferor Company and Enkei Wheels (India) Limited, the Resulting/Transferee Company. 3. The Scheme of Arrangement is presented for demerger of Wheel Division of Enkei Castalloy Limited into Enkei (Wheels) India Limited and reduction and utilisation of Securities Premium Account of Rs 100 lacs of Enkei Castalloy Limited pursuant to the relevant provisions of the Companies Act,1956. 4. Counsel appearing on behalf of the Petitioner have stated that they have complied with all the 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 thereunder. The undertaking is accepted. 5. The Regional Director has filed affidavit stating therein that save and except as stated in paragraph 6(a) to 6(d) of the said affidavit, the scheme does not appear to be prejudicial to the interest of shareholders and public. 6. In paragraph 6 (a) of the said affidavit, the Regional Director has stated that the permission given by RBI from FEMA angle vide its Letter dated 18/08/2009 for issue of share against the share application money received by the 3 Demerged Company to the extent of Rs 13,16,52,000 expired on 17/02/2010. Hence, necessary approval be obtained for extension of time for issue of shares from RBI by the Demerged Company before the scheme is given effect. The Petitioner through their counsel undertakes that the Demerged Company will obtain necessary approval for extension of time for issue of shares before the scheme is given effect. The said undertaking is accepted. 7. Also in paragraph 6(b) of the said affidavit, the Regional Director has further stated that the Resulting Company shall not issue any shares against the share application money received by the Demerged Company which are proposed to be transferred to Resulting Company as per clause 13.2 of the Scheme till the extension of time is obtained from RBI in compliance of FEMA Regulations. The Petitioner through their Counsel undertakes that the Resulting Company shall not issue any shares against the share application money received by the Demerged Company which are proposed to be transferred to Resulting Company as per clause 13.2 of the Scheme till the extension of time for issue of shares is obtained from RBI in compliance of FEMA Regulations by the Demerged Company. The said undertaking is accepted. 8. Also in paragraph 6(c) of the said affidavit, the Regional Director has further stated that it is proposed in clause 13.1 4 of scheme for increasing the authorised capital to Rs 5.50 Crores. The Resulting Company shall comply with the requirement of filing Form No 5 and pay proportionate registration fees to Registrar of Companies. The Petitioner through their counsel undertakes that the Resulting Company shall comply with requirement of filing Form No 5 and pay the proportionate registration fees to the Registrar of Companies for increase in authorised capital. The said undertaking is accepted. 9. Also in paragraph 6(d) of the said affidavit, the Regional Director has further stated that in terms of clause 13.2 of the Scheme it is necessary on the part of the Resulting Company first to issue preference shares and after expiry of 18 months period from the date of issue of convertible preference shares as stated in Schedule ‘D’ of the Scheme the preference shares can be converted into equity shares. The proposed authorised capital of the Memorandum of Association and Articles of Association as stated in clause 13(1) of the scheme do not provide for issue of preference shares. Hence the Resulting Company shall comply with the requirement of section 94 read with section 16/31 of the Companies Act. The Petitioner through their Counsel undertakes that the Resulting Company shall comply with requirement of section 94 read with section 16/31 of the Companies Act,1956 for increase in authorised 5 capital before the issue of Preference share. The said undertaking is accepted. 10. 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. 11. There is no objection to the Scheme of Arrangement, save and except as stated above and since all the requisite statutory compliances have been fulfilled the Scheme of Arrangement deserved to be sanctioned. Hence Company Scheme Petition No.14 of 2010 filed by the Demerged Company is made absolute in terms of prayer clauses (a) to (f) and Company Scheme Petition No.15 of 2010 filed by the Resulting Company is made absolute in terms of prayer clauses (a) and (b). 12. The Petitioner Companies to lodge copy of this order and the Scheme duly authenticated by the Company Registrar, High Court,(O.S) Bombay, with the concerned Superintendent of Stamps for the purpose of adjudication of stamp duty, payable, if any, on the same within 60 days of from the date of this Order. 13. The Petitioner in both the Companies to pay cost of Rs. 7,500/- each to the Regional Director,Western Region,Mumbai .Costs to be paid within four weeks from today. 6 14. Petitioner in Company Scheme Petition No. 14 of 2010 to publish notice of registration of order and minutes of reduction of Securities Premium Account by Registrar of Companies once each in the two local newspaper viz., “The Indian Express” in English and “Loksatta” in Marathi both circulating in Pune and in the Maharashtra Government Gazette within 30 days of registration aforesaid. 15. Filing and issuance of the drawn up order is dispensed with. 16. All concerned authorities to act on a copy of this order along with scheme (in case of Company Scheme Petition No. 14 & 15 of 2010) and form of minutes (annexed to Company Scheme Petition No.14 of 2010 being Exhibit “F”) duly authenticated by Company Registrar, High Court, (O.S) Bombay. (S. J. KATHAWALLA,J)