IN THE HIGH COURT OF JUDICATURE AT BOMBAY (ORDINARY ORIGINAL CIVIL JURISDICTION) COMPANY PETITION NO.1028 OF 2008 CONNECTED WITH COM PANY APPLICATION NO.1125 OF 2008 In the matter of the Companies Act, 1956; AND In the matter of Section 391 and 394 of the Companies Act, 1956; AND In the matter of Scheme of Amalgamation of : 1) Su-Raj Diamond Traders Private Limited 2) Precious Jewels Exports Private Limited 3) Collections Diamond Exports Private Limited 4) Kings Jewel Exports Private Limited 5) Hira Exports Private Limited W I T H Firstrate Diamonds Private Limited Su-Raj Diamond Traders Private Limited ... Petitioner/ Transferor Company No. 1 … 2 … AND COMPANY PETITION NO.1029 OF 2008 CONNECTED WITH COMPANY APPLICATION NO.1126 OF 2008 Precious Jewels Exports Private Limited ... Petitioner/ Transferor Company No. 2 AND COMPANY PETITION NO.1030 OF 2008 CONNECTED WITH COMPANY APPLICATION NO.1127 OF 2008 Collections Diamond Exports Private Limited ... Petitioner/ Transferor Company No. 3 AND COMPANY PETITION NO.1031 OF 2008 CONNECTED WITH COMPANY APPLICATION NO.1128 OF 2008 Kings Jewel Exports Private Limited ... Petitioner/ Transferor Company No. 4 … 3 … AND COMPANY PETITION NO.1032 OF 2008 CONNECTED WITH COMPANY APPLICATION NO.1129 OF 2008 Hira Exports Private Limited ... Petitioner/ Transferor Company No. 5 WITH COMPANY PETITION NO. 1033 OF 2008 CONNECTED WITH COMPANY APPLICATION NO. 1130 OF 2008 Firstrate Diamonds Private Limited ... Petitioner/ Transferee Company Mr. Ashok K. Goel with Mr. Vikram A. Goel for Petitioners Mr. P. Rama Rao, Official Liquidator present in Company Petitions No.1028 to 1032 of 2008. Mr. C. J. Joy i/b Mr. S. K. Mohapatra for the Regional Director in all Petitions. … 4 … Coram :- S. J. Kathawalla J. Date :- 25th September, 2009. P.C. 1. Heard Learned Counsel for the parties. 2. The sanction of the Court is sought under Section 391 to 394 of the Companies Act, 1956 to a Scheme of Amalgamation of Su-Raj Diamond Traders Private Limited, Precious Jewels Exports Private Limited, Collections Diamond Exports Private Limited, Kings Jewel Exports Private Limited and Hira Exports Private Limited (the Transferor Companies) with Firstrate Diamonds Private Limited (the Transferee Company). 3. Counsel appearing on behalf of the Petitioners has stated that they have complied with all the requirements as per the directions of this Court and they have filed necessary affidavits of compliance in the court. Moreover, Petitioner Companies also undertake to comply with all statutory requirements, if any, as required under the Companies Act, 1956 and the Rules made thereunder. … 5 … 4. The Regional Director has filed an Affidavit stating therein that save and except as stated in paragraph 6(a) and 6(b) the Scheme is not prejudicial to the interest of shareholders and public. In paragraphs 6(a) and 6(b) of the said Affidavit the Regional Director has stated that: - “6. That the Deponent further submits that : - (a) It is seen from the Accounts for the year 2006-07 and 2007- 08 of the First and Fifth Transferor Companies that both these companies did not do any business during the said period. In this connection the petitioner’s advocate was asked to explain, as to how may years the said companies were dormant and also produce the last financial accounts of its working period for the scrutiny. However the petitioners did not produce the Balance Sheet and the Profit and Loss Accounts for the last working period as asked for. Hence, the above non-compliance is brought to the notice of the Hon’ble Court for appropriate orders in this regard, as it deems fit and proper. … 6 … (b) Clause 6(iii) of Part II of the scheme provides that all the persons whose name appear in the Register of Members on the record date of the Transferor Companies ought to surrender share certificate for cancellation to the Transferee and in case of default, the shares held by such members shall be deemed to stand cancelled without any further act. Subsequently, the Advocate for the petitioner vide their letter dated 12/05/2009 confirmed that the shares will be issued to the members of the Transferor Companies on approval of the scheme, whether or not the members of the Transferor Companies surrender their respective share certificates and no member of the Transferor Companies will be deprived of their entitlement of shares/benefits. In this connection this Hon’ble High Court, if deemed fit, direct the petitioner companies to make necessary correction/amendment in clauses 6(iii) of Part II of the scheme as clarified.” 5. So far as objection in paragraph 6(a) of the said Affidavit is concerned, the First Transferor Company and the Fifth Transferor Company have filed their respective Affidavits stating therein that they have already provided the Balance Sheet and Profit and Loss … 7 … Account of the respective Companies for the last five years. They have also annexed their Balance Sheet and Profit and Loss Account with schedules and Director’s and Auditor’s Report of the last working period. 5. In reply to the said objection raised by the Regional Director in paragraph 6(b) of his affidavit, the Transferee Company has filed its Affidavit, inter alia, stating therein that the Transferee Company will and shall issue shares to the members of the Transferor Companies on approval of the Scheme of Amalgamation, the shares of the Transferee Company whether or not the members of the Transferor Companies surrender their respective share certificates and that no member of the Transferor Companies will be deprived of their entitlement of shares/benefits. It is further noted in view of what is stated in the Petitioners’ Advocate’s Letter dated 12th May, 2009, and further in view of what is stated in the aforesaid Affidavit, it is not at all necessary to make the same amendments to clause 6(iii) of Part II of the Scheme of Amalgamation. 6. The Counsel for Regional Director states that it is necessary to incorporate the modification in the Scheme, by substituting the existing Clause 6(iii) of Part II of the Scheme by the following Clause:- … 8 … (iii) Upon the approval of the Scheme, the share certificates held by the shareholders of the Transferor Companies shall automatically stand cancelled without any necessity of them being surrendered. 7. The Counsel for Petitioners states that the Petitioners have no difficulty in modifying the Scheme by substituting the Clause 6(iii) of the Scheme with the abovementioned Clause. Accordingly, the Clause 6(iii) of Part II of the Scheme stands substituted to the said extent. 8. The Official Liquidator has filed his Report in Company Petition Nos. 1028 of 2008 to 1032 of 2008 stating therein that the affairs of the Transferor Companies have been conducted in a proper manner and that the Transferor Companies may be ordered to be dissolved. 9. Upon perusal of the entire matter placed on record the Schemes appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to any public policy. None of the parties concerned have come forwards to oppose the scheme. Moreover, the Regional Director has stated that the Scheme as proposed is not prejudicial to the interest of shareholders or creditors and public and the Official Liquidator has stated that the affairs of the Transferor Companies has been conducted in a proper manner. … 9 … 10.There is no objection to the scheme and since all the requisites, statutory compliance has been fulfilled Company Petition No. 1028 of 2008, 1029 of 2008, 1030 of 2008, 1031 of 2008 and 1032 of 2008 filed by the Transferor Companies are made absolute in terms of Prayer Clauses (a) to (f) and Company Petition No. 1033 of 2008 filed by the Transferee Company is made absolute in terms of Prayer Clauses (a) to (f). 12. 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 purposes of Adjudication of stamp duty payable, if any, on the same within 30 days from the date of the order. 13. The Petitioners in all the company petitions to pay costs of Rs.7,500/- each to the Regional Director. The Petitioners in Company Petition No.1028 of 2008, to 1032 of 2008, to pay Rs.7,500/- each to the Official Liquidator towards costs to be paid within four weeks from today. … 10 … 14. Filling and issuance of the drawn up order is dispensed with. 15. All authorities concerned to act on a copy of this order alongwith the scheme duly authenticated by the Company Registrar, High Court, Bombay. (S. J. Kathawalla J.)