THE HON'BLE MR JUSTICE G.V.SEETHAPATHY COMPANY PETITION Nos :43 & 44 of 2010 DATED:30-08-2010 ORDER: These two petitions are filed under Sections 391 and 394 of the Companies Act, 1956 (for brevity, ‘the Act’), seeking sanction for the scheme of amalgamation of the transferor and transferee companies. 2. C.P.No.43 of 2010 is filed by M/s Hyquip Projects Private Limited, Hyderabad (hereinafter referred to as ‘transferor company’) and C.P.No.44 of 2010 is filed by M/s Hyquip Technologies Limited, Hyderabad (hereinafter referred to as ‘transferee company’). 3. Heard learned counsel for the petitioner; learned Assistant Solicitor General, representing the Registrar of Companies, and the learned counsel representing the Official Liquidator in both the matters. Perused the records. 4. The transferor company was originally incorporated as a Private Limited company in the name of ‘Hyquip Marketing Services Private Limited’ on 12-06-1987. Later the name of the company was changed to its present name i.e., ‘M/s Hyquip Projects Private Limited’ and a fresh certificate of incorporation was obtained from the Registrar of Companies, Hyderabad on 07-03-2000. The registered office of the transferor company is situated at Gandhinagar, Hyderabad. The authorized share capital of the transferor company is Rs.4,90,00,000/- divided into 3,90,000 equity shares of Rs.100/- each and 1,00,000 13% non- convertible redeemable preference shares of Rs.100/- each. The issued, subscribed and paid up share capital of the transferor company as on 31st March, 2009 is Rs.4,86,21,800/- consisting of 3,86,218 equity shares of Rs.100/- each amounting to Rs.3,86,21,800/- and preference share capital of Rs.100,00,000/- consisting of 1,00,000 preference shares of Rs.100/- each. 5. The main objects of the transferor company are to carry on all types of selling and purchasing activities as sales purchasers, commission agents, brokers and as service agents and to carry on the business of marketing and technical consultants. The detailed objects of the transferor company are set out in the Memorandum and Articles of Association, annexed to the petition, and hence they are not reiterated here for the sake of brevity. 6. M/s Hyquip Technologies Limited-transferee company was originally incorporated as Public Limited company in the name of ‘Hyquip Exports Limited’ from 13-08-2003 and later its name was changed to present name of ‘M/s Hyquip Technologies Limited’ and a fresh certificate of incorporation was obtained on 07-07-2005 from the Registrar of Companies, Hyderabad. The registered office of the transferee company is situated at Gandhinagar, Hyderabad. The authorized share capital of the transferee company is Rs.145,00,00,000/- divided into 14,50,000 equity shares of Rs.10/- each. The issued, subscribed and paid up capital of the transferee company is Rs.143,96,620/- divided into 14,39,662 equity shares of Rs.10/- each. 7. The main objects of the transferee company are to carry on the business of development, manufacturing, process, designing and/or installation of various technologies, including mechanical, power generation, aviation, aero- dynamics, automobiles etc., The detailed objects of the transferee company are set out in the Memorandum and Articles of Association, annexed to the petition, and hence they are not reiterated here for the sake of brevity. 8. It is stated that the transferor and transferee companies have proposed a scheme of amalgamation, wherein the transferor company would get amalgamated with the transferee company. It is stated that the proposed scheme of amalgamation would be beneficial to the interest of both companies, their shareholders, creditors and employees. Both the companies are being managed and controlled by common shareholders and proposed merger would reduce the overhead and administrative costs and would give financial leverage to both the companies. It is further stated that from the appointed date all liabilities, debts and other obligations of the transferor company shall stand transferred and taken over by the transferee company and all the permanent employees of the transferor company shall become the employees of the transferee company without interruption of services. The proposed amalgamation would not affect any transaction proceedings or auction already concluded, settled or taken by the transferor company. The salient features and benefits of the proposed scheme of amalgamation are set out in the scheme, annexed to the petitions, and also extracted in the petitions. 9. The Board of Directors of the transferor company in their meeting held on 29-08-2009 and the Board of Directors of the transferee company in their meeting held on 29-08-2009 have passed resolutions approving the proposed scheme of amalgamation, subject to the approval of the shareholders and confirmation by this Court. Earlier, the transferor company filed C.A.No.129 of 2010 and the transferee company filed C.A.No.130 of 2010 for dispensing with the meeting of the shareholders and this Court by order, dated 11-02-2010, dispensed with the meeting of the shareholders. It is stated that there are ten shareholders in the transferor company and all of them gave affidavits approving the proposed scheme of amalgamation and the affidavits are taken on record. There are 9 shareholders in the transferee company and all of them have given affidavits approving the proposed scheme of amalgamation and their affidavits are also taken on record. It is stated that there is only one secured creditor i.e.,Oriental Bank Limited for the transferor company and they addressed a letter, dated 21-08- 2010, giving consent to the proposed scheme of amalgamation and there are 7 unsecured creditors, who have also given letters stating no objection for the proposed scheme. 10. Learned counsel for the petitioner filed the said letters given by the creditors along with a memo and they are taken on record. There is one secured creditor i.e. Oriental Bank Limited and two unsecured creditors of the transferee company and all of them gave letters, stating no objection for the proposed scheme and they are also filed together with a memo and the same is taken on record. 11. While admitting the petitions on 26-02-2010, this Court directed issuance of notice to the Regional Director, Ministry of Corporate Affairs, Chennai, the Registrar of Companies, Hyderabad and the Official Liquidator, attached to this Court, and also a general notice by way of publication in ‘Business Standard’ English Daily newspaper and ‘Andhra Jyothi Telugu Daily newspaper of Hyderabad Editions. In response thereto, the learned Assistant Solicitor General, representing the Registrar of Companies, filed a common affidavit stating no objection to the proposed scheme, except that the stamp duty is payable by the transferee company. 12. Learned counsel for the petitioners would submit that the transferee company would undertake to pay the necessary stamp duty as per rules. The learned counsel representing the Official Liquidator filed a report stating that on examination of the information furnished, it is found that the affairs of the company appeared to have not been conducted in the manner prejudicial to the interest of the members or to the public interest. The Official Liquidator also pointed out that there is one secured and two unsecured creditors and letters of no objection have to be secured from them. The said objection has since been complied with as letters of no objection from the creditors are filed today and they are taken on record. In response to the general notice, no objection has been received from any quarter in respect of the proposed scheme of amalgamation. 13. In the circumstances, as both the companies are stated to be engaged in similar business activity and they are managed by the same group and the Board of Directors of both companies approved the proposed scheme of amalgamation and all the shareholders and creditors of both companies also stated no objection for the same, and there being no objection received from any quarter and the interest of the shareholders, creditors and the employees of both the companies having been duly taken care of, it is considered that sanction can be accorded for the proposed scheme of amalgamation and the same is accorded with effect from 01-04-2009, i.e. the date of appointment. In view of the same, the transferor company shall stand dissolved, without going through the process of winding up with effect from 01-04-2009. Petitioners shall file certified copy of this order within thirty days of the receipt of the same before the Registrar of Companies, Hyderabad for the purpose of registration and necessary follow up action. Petitioners shall pay a sum of Rs.3000/- (rupees three thousand only) towards costs for the Central Government to the learned Assistant Solicitor General. 14. Both the Company Petitions are allowed accordingly. There shall be no order as to costs. _______________________ G.V.SEETHAPATHY,J 30th August, 2010. Tsy