IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO.532 of 2009 CONNECTED WITH COMPANY APPLICATION NO.415 OF 2009 IN THE MATTER of Sections 391 to 394 of the Companies Act, 1956; AND IN THE MATTER of Mulox Sacks Private Limited AND IN THE MATTER of the Scheme of Amalgamation of Mulox Sacks Private Limited with Technocraft Industries (India) Limited. Mulox Sacks Private Limited ) A company incorporated under ) the provisions of the Companies ) Act, 1956, and having its ) Registered office at A-25, MIDC, ) Road No.3, Marol Industrial Area, ) Andheri (E), Mumbai – 400 093 ) ...Petitioner/Transferor Company Mr. Nayan Rawal Advocate for Petitioners. Mr. P. Ramarao, Official Liquidator in Company Petition No.532 of 2009 connected with Company Application No.415 of 2009 Mr. C. J. Joy i/b Mr. S. K. Mohapatra, for Regional Director. CORAM: S. J. Kathawalla, J. Date: 14th October, 2009 PC: 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 the Scheme of Amalgamation of MULOX SACKS PRIVATE LIMITED with TECHNOCRAFT INDUSTRIES INDIA LIMITED. 3. The Petitioner which is the Transferor Company is the wholly owned subsidiary of the Transferee Company. By the order dated 3rd April, 2009 passed by this Court in Company Application No.415 of 2009, the filing of separate Application and Petition by the Transferee Company was dispensed with in view of the judgement of this Court in Mahaamba Investment Limited v/s. IDI Limited (2001) 105 Company Cases, pages 16 to 18. Hence no separate Petition was filed by Technocraft Industries (India) Limited, the Transferee Company. 4. Counsel appearing on behalf of the Petitioners has stated that the Petitioner has complied with all requirements as per directions of this Court and they have filed necessary affidavits in the Court. Moreover, the 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. The Regional Director has filed an Affidavit stating that save and except as stated in Para 6 (i) and 6 (ii), it appears that the Scheme is not prejudicial to the interest of shareholders and 2 public. The Paragraphs 6 (i) and 6 (ii) of the said Affidavit read as under:- 6. That the Deponent further submits that:- (i) The Transferee Company appeared to have prima facie violated the provisions of section 295 of the Act in respect of its extending loans to the Transferor Company which is private limited company in which its directors are interested, during the years 2006-07 and 2007-08. (ii) Transferee Company did not comply with the section 297 of the Act in respect of its sale transaction with Technocraft Export Private Limited, another private company in which its directors are interested. In respect of above said violation of section 295 and 297 of the Act by the Transferee Company, Registrar of Companies, Mumbai had been directed to initiate necessary penal action against the Transferee Company and its directors. The above facts being material facts in respect of Transferee Company are brought to the notice of this Hon'ble High Court for information even though the filing of separate petition by the Transferee Company has been dispensed with by this Hon'ble High Court. It is further stated that in respect of the above said violation of Section 295 and 297 of the Companies Act, 1956 by the Transferee Company, The Registrar of Companies has been directed to initiate necessary penal action against the Transferee Company and its Directors and that the above facts being material in respect of the Transferee Company are brought to the notice of this Court. 6. Mr. Manoj Jain, Company Secretary, of the Transferee Company has tendered an Affidavit in reply to the above mentioned objections raised by the Regional Director, Western Region. It is stated in the said affidavit that none of the alleged violations 3 referred to by the Regional Director have any bearing whatsoever on the Scheme hence, do not come in the way of the scheme being sanctioned by the Court. It is also stated that it is always open to the Regional Director to adopt such proceedings in accordance with law with regard to the alleged violations against the Company and its Directors, as the case may be, even after the scheme is sanctioned. The Transferee Company has further stated that as regards the alleged violation under Section 295 and 297 of the Act by the Transferee Company, the Company will take suitable steps as provided under the Act and if required the Company will make appropriate application for compounding the offence as per the provisions of the Act. It is also stated that the above contraventions, if any, are technical in nature and does not affect the Scheme of Amalgamation and that the Company is otherwise compliant of the statutory provisions of the Companies Act, 1956 and will comply with the relevant provisions of the Act. The said statement is accepted. It is also stated that the Transferee Company has no objections to such liberty being reserved to the Regional Director subject to the Company’s right to defend such proceedings in accordance with law and that if any such proceedings are adopted against the Transferee Company, the same can be and may be continued against the Transferee Company. 4 7. The Official Liquidator has filed his report in Company Petition No.532 of 2009 stating therein that the affairs of the Transferor Company have been conducted in a proper manner and that the Transferor Company may be ordered to be dissolved. 8. Upon perusal of the entire material placed 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. None of the parties concerned has come forward to oppose the Scheme. So far as the violation of Sec. 295 & 297 of the Companies Act, 1956, by the Transferee Company are concerned, the Registrar of Companies / Regional Director, Western Region are at liberty to take appropriate action pursuant to The Companies Act, 1956 against the Transferee Company. 9. There is No Objection to the Scheme save and except as stated in paragraphs 4 to 6 hereinabove, Company Petition No.532 of 2009 filed by the Petitioner/Transferor Company is made absolute in terms of prayer clauses (a) to (h) of the Petition. 10. The Petitioner Company to lodge a copy of this order and the Scheme duly authenticated by the Company Registrar, High Court (O.S.), Bombay with the concerned Superintendent of 5 Stamps for the purpose of adjudication of stamp duty payable, if any, on the same within 60 days from the date of the order. 11. The Petitioner is to pay cost Rs.7500/- each to Regional Director and to the Official Liquidator, High Court, Bombay. Cost to be paid within four weeks from today. 12.Filing and issuance of the drawn up order is dispensed with. 13.All concerned authorities to act on a copy of this Order alongwith the Scheme duly authenticated by the Company Registrar, High Court, Bombay. (S. J. Kathawalla, J.) 6