THE HON’BLE Ms. JUSTICE G. ROHINI COMPANY PETITION NO.185 of 2010 ORDER : M/s. Incap Insulators Private Limited (hereinafter referred to as ‘the Transferor Company’) filed this petition under Section 394 read with Section 391 of the Companies Act, 1956 with a prayer to sanction the Scheme of Amalgamation of the Transferor Company with M/s. Incap Limited (hereinafter referred to as ‘the Transferee Company’). It is stated that the Transferor Company was originally incorporated on 11.10.2005 under the Companies Act, 1956 vide Registration No.U31909AP2005PTC47743. The present authorised capital of the petitioner/Transferor Company as on 31.03.2010 is Rs.1,50,00,000/- divided into 15,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid-up capital of the company is Rs.1,50,00,000/- divided into 15,00,000 equity shares of Rs.10/- each, fully paid up. The main objects of the Transferor Company as set out in its Memorandum of Association has been mentioned in para-5 of the company petition. The Transferor Company is engaged in the business of manufacturing of Silicon Rubber Insulators. The petitioner/Transferor Company is having its manufacturing facilities located at Plot No.200/8, Phase-II, I.D.A., Charlapally, Hyderabad. The turnover of the petitioner/Transferor Company for financial year 2009-2010 was INR 1.11 Crores and the net worth of the Company as on 31.3.2010 was INR 0.50 Crores. The Transferee Company was incorporated on 21.5.1990 and its authorized capital as on 31.03.2010 is Rs.6,00,00,000/- divided into 60,00,000 equity shares of Rs.10/- each. The issued Rs.5,20,00,000/- divided into 52,00,000 equity shares of Rs.10/- each fully paid up and the subscribed Rs.5,16,96,000/- divided into 51,69,600 equity shares of Rs.10/- each fully paid up and the paid up capital of the company is Rs.4,65,32,000/- divided into 46,53,200 equity shares of Rs.10/- each fully paid up. It is stated that the Board of Directors of the Transferor Company at its meeting held on 1.12.2009 has unanimously approved the Scheme of Amalgamation of the petitioner/Transferor Company i.e., M/s. Incap Insulators Private Limited with the Transferee Company i.e., M/s. Incap Limited. The approval of the Board is subject to the approval of shareholders of petitioner/Transferor Company and the sanction of this Court. Similarly the Board of Directors of the Transferee Company at its meeting held on 29.5.2010 has unanimously approved the Scheme of Amalgamation of the petitioner/Transferor Company i.e., M/s. Incap Insulators Private Limited with the Transferee Company i.e., M/s. Incap Limited. The approval of the Board is subject to the sanction of this Court. It is further stated that the Scheme of Amalgamation whereunder the Transferor Company is merging into the Transferee Company and the undertaking of the Transferor Company as going concern shall be transferred and vested to the Transferee Company pursuant to the provisions of Section 394 of the Companies Act, 1956 on the terms and conditions set out in the Scheme w.e.f. 1.4.2010 subject to the confirmation by this Court. The Directors of the Transferor and Transferee Companies who are common to both the Companies except one C. Bhagavantha Rao have no material interest in the proposed Scheme of Amalgamation except to the extent of their shareholding in respect to the companies. As on the date, the entire share capital of the Transferor Company is held by the Transferee Company and the same has been certified by the Statutory Auditors of the Transferor Company. It is further stated that as on 31.08.2010 the Transferor Company has outstanding creditors amounting to Rs.2.53 Crores out of which Rs.2.28 Crores is towards secured creditors who are the Bankers of the Transferor Company and the balance of Rs.0.25 Crores is towards unsecured creditors who are suppliers/contractors of the Transferor Company and are being paid against supplies / work orders. It is stated that the proposed Scheme of Amalgamation does not affect the interest of the creditors nor does it diminish or dilute the liability of the creditors and as such the interest of the creditors is not affected. It is also stated that all the creditors of the Transferor Company have given their consent for the Scheme of Amalgamation and the sole shareholder of the Transferor Company has also given its written consent by way of a Board resolution. In view of the same, this Court by order made in C.A.No.745 of 2010 had dispensed with the convening of the meeting of the shareholder as well as the secured and unsecured creditors of the Transferor Company. Therefore, the present Company Petition has been filed by the Transferor Company with a prayer to sanction the Scheme of Amalgamation. By order dated 6.10.2010 this Court directed notice to the Regional Director, Ministry of Corporate Affairs, representing the Government of India and also ordered publication of notice in Indian Express and Andhra Jyothi, Hyderabad editions. Accordingly, the notices were served and the paper publications were made and the proof of service has been filed into the Court. Having received the notice, the Registrar of Companies filed an affidavit dated 25.11.2010 stating that the Transferee Company should pay the stamp duty wherever applicable as per the Regulations of the A.P. Stamp Act. The Official Liquidator attached to this Court submitted his report dated 23.11.2010 stating that the information and records furnished had not revealed anything about pending litigation and prosecution either against or by the Transferor Company and its Directors. It is also stated 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. I have heard Sri P. Vikram, the learned counsel for the petitioner as well as the learned Assistant Solicitor General of India and Sri M. Anil Kumar, the learned counsel representing the Official Liquidator. Having regard to the facts and circumstances noticed above and keeping in view that no objections have been received from any quarter opposing the proposed Scheme of Amalgamation in response to the notice issued by way of publication in newspaper and moreover the proposed Scheme of Amalgamation is not opposed to any provision of law or public interest, there cannot be any impediment for granting sanction of the proposed Scheme of Amalgamation as sought by the petitioner/Transferor Company. Accordingly, the proposed Scheme of Amalgamation is approved. It is made clear that the Transferee Company should pay the stamp duty at appropriate time. A copy of this shall be filed before the Registrar of Companies within 30 days from the date of receipt of this order. A sum of Rs.3,000/- shall be paid by the petitioner company to the Assistant Solicitor General of India towards fee . The Company Petition is accordingly allowed. No costs. ______________ G. ROHINI, J. Dt. 22.12.2010 Ivd