THE HON’BLE Ms. JUSTICE G. ROHINI COMPANY PETITION No.201 OF 2010, COMPANY PETITION No.202 OF 2010, COMPANY PETITION No.203OF 2010, COMPANY PETITION No.204OF 2010, AND COMPANY PETITION No.205 OF 2010 Dated: 21.12.2010 In Company Petition No.201 of 2010: In the matter of Companies Act, 1956 (1 of 1956) And In the matter of Sections 391 and 394 of the said Act M/s. Burgeon Holdings Limited .. Petitioner/ (1st Transferor Company) In Company Petition No.202 of 2010: In the matter of Companies Act, 1956 (1 of 1956) And In the matter of Sections 391 and 394 of the said Act M/s. Sapad Holdings Limited .. Petitioner/ (2nd Transferor Company) In Company Petition No.203 of 2010: In the matter of Companies Act, 1956 (1 of 1956) And In the matter of Sections 391 and 394 of the said Act M/s. Seraphic Investments Limited .. Petitioner/ (3rd Transferor Company) In Company Petition No.204 of 2010: In the matter of Companies Act, 1956 (1 of 1956) And In the matter of Sections 391 and 394 of the said Act M/s. Trinay Holdings (India) Limited .. Petitioner/ (4th Transferor Company) A N D In Company Petition No.205 of 2010: In the matter of Companies Act, 1956 (1 of 1956) And In the matter of Sections 391 and 394 of the said Act M/s. Tyrant Holdings Limited .. Petitioner/ (5th Transferor Company) THE HON’BLE Ms. JUSTICE G. ROHINI COMPANY PETITION No.201 OF 2010, COMPANY PETITION No.202 OF 2010, COMPANY PETITION No.203OF 2010, COMPANY PETITION No.204OF 2010, AND COMPANY PETITION No.205 OF 2010 COMMON ORDER : These five petitions are filed under Sections 391 and 394 of the Companies Act, 1956 for sanction of Scheme of Amalgamation of the petitioner companies with Newwave Infrastructure Projects Limited w.e.f. 1.4.2010. All the petitioners herein are the Transferor Companies which are engaged in the business of investment and holdings of stocks and shares and etc. The Transferor Companies are wholly owned subsidiary of Newwave Infrastructure Projects Limited (hereinafter referred to as ‘Transferee Company’) which is also engaged in the same business of investment and holding of stocks and shares and etc. I have heard Sri V.S. Raju, the learned counsel appearing for the petitioners as well as the learned Assistant Solicitor General of India and the learned Counsel appearing for the Official Liquidator. The petitioner in C.P.No.201 of 2010 is M/s. Burgeon Holdings Limited (hereinafter referred to as ‘1st Transferor Company’). It was incorporated in the State of Andhra Pradesh under the name and style of M/s. Burgeon Holdings Limited on 23.09.2005 under the Certificate of Incorporation No.01-47569 of 2005-2006. The registered office of the 1st Transferor Company is situated at Flat No.202, Satguruvilla Apartments, Yellareddyguda, Hyderabad. The present authorized share capital of the 1st Transferor Company is Rs.10,00,00,000/- divided into 1,00,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid up capital of the company is Rs.8,44,05,000/- divided into 84,40,500 equity shares of Rs.10/- each fully paid up and the entire share capital is held by the transferee company and its nominees. The main objects of the 1st Transferor Company are described in para-5 of the Company Petition No.201 of 2010. The petitioner in C.P.No.202 of 2010 is M/s. Sapad Holdings Limited (hereinafter referred to as ‘2nd Transferor Company). It was incorporated in the State of Andhra Pradesh under the name and style of M/s. Sapad Holdings Limited on 27.9.2005 under the Certificate of Incorporation No.01-47602 of 2005-2006. The registered office of the 2nd Transferor Company is situated at Flat No.202, Satguruvilla Apartments, Yellareddyguda, Hyderabad. The present authorized share capital of the 2nd Transferor Company is Rs.10,00,00,000/- divided into 1,00,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid up capital of the company is Rs.8,30,95,000/- divided into 83,09,500 equity shares of Rs.10/- each fully paid up and the entire share capital is held by the transferee company and its nominees. The main objects of the 2nd Transferor Company are described in para-10 of the Company Petition No.201 of 2010. The petitioner in C.P.No.203 of 2010 is M/s. Seraphic Investments Limited (hereinafter referred to as ‘3rd Transferor Company’). It was incorporated in the State of Andhra Pradesh under the name and style of M/s. Seraphic Investments Limited on 27.9.2005 under the Certificate of Incorporation No.01-47604 of 2005-2006. The registered office of the 3rd Transferor Company is situated at Flat No.202, Satguruvilla Apartments, Yellareddyguda, Hyderabad. The present authorized share capital of the 3rd Transferor Company is Rs.10,00,00,000/- divided into 1,00,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid up capital of the company is Rs.8,22,80,000/- divided into 82,28,000 equity shares of Rs.10/- each fully paid up and the entire share capital is held by the transferee company and its nominees. The main objects of the 3rd Transferor Company are described in para-15 of the Company Petition No.201 of 2010. The petitioner in C.P.No.204 of 2010 is M/s. Trinay Holdings (India) Limited (hereinafter referred as ‘4th Transferor Company’). It was incorporated in the State of Andhra Pradesh under the name and style of M/s. Trinay Holdings (India) Limited on 19.9.2005 under the Certificate of Incorporation No.01-47524 of 2005-2006. The registered office of the 4th Transferor Company is situated at Flat No.202, Satguruvilla Apartments, Yellareddyguda, Hyderabad. The present authorized share capital of the 4th Transferor Company is Rs.10,00,00,000/- divided into 1,00,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid up capital of the company is Rs.8,36,35,000/- divided into 83,63,500 equity shares of Rs.10/- each fully paid up and the entire share capital is held by the transferee company and its nominees. The main objects of the 4th Transferor Company are described in para-20 of the Company Petition No.201 of 2010. The petitioner in C.P.No.205 of 2010 is M/s. Tyrant Holdings Limited (hereinafter referred as ‘5th Transferor Company’). It was incorporated in the State of Andhra Pradesh under the name and style of M/s. Tyrat Holdings Limited on 23.09.2005 under the Certificate of Incorporation No.01-47570 of 2005-2006. The registered office of the 5th Transferor Company is situated at Flat No.202, Satguruvilla Apartments, Yellareddyguda, Hyderabad. The present authorized share capital of the 5th Transferor Company is Rs.10,00,00,000/- divided into 1,00,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid up capital of the company is Rs.8,03,10,000/- divided into 80,31,000 equity shares of Rs.10/- each fully paid up and the entire share capital is held by the transferee company and its nominees. The main objects of the 5th Transferor Company are described in para-25 of the Company Petition No.201 of 2010. The Transferee Company – Newwave Infrastructure Projects Limited – was originally incorporated in the State of Andhra Pradesh under the name and style of M/s. Newwave Securities and Industrial Credits Limited on 15.12.1993 under the Certificate of Incorporation No.01-16740 of 1993-1994. Later on the Company had changed its name to M/s. Newwave Infrastructure Projects Limited and a fresh Certificate of Incorporation consequent on change of name was issued by the Registrar of Companies, Andhra Pradesh, Hyderabad on 25.03.2003 after complying with the necessary formalities under the Companies Act, 1956. The registered office of the Transferee Company is situated at Flat No.202, Satguruvilla Apartments, Yellareddyguda, Hyderabad. The present authorized share capital of the Transferee Company is Rs.15,00,00,000/- divided into 1,50,000 equity shares of Rs.10/- each. The issued, subscribed and paid up capital of the company is Rs.13,77,57,000/- divided into 1,37,75,700 equity shares of Rs.10/- each fully paid up. The main objects of the Transferee Company are to carry on India or elsewhere either alone or jointly with one or more person, Government, local or other bodies the business of designing, developing, building and etc., (morefully described in para-30 of the Company Petition No.201 of 2010). Since the Transferor Companies which are engaged in the business of investment and holdings of stocks and shares, etc., are wholly owned subsidiaries of the Transferee Company which is also engaged in the business of investment and holdings of stocks and shares, etc., the consolidation of the Transferor Companies and the Transferee Company has been proposed which would result in benefits in terms of synergies in operations, pooling of common administrative costs and would make the management control systems more efficient and effective. Such consolidation would be a step towards simplification of the group structure and the restructuring through the Scheme would be to the mutual advantage of all the Companies. In view of the advantages of amalgamation, the Board of Directors of the Transferor Companies at their respective meetings held on 9.8.2010 and the Transferee Company at their meeting held on 9.8.2010 approved the Scheme of Amalgamation of the Transferor Companies with the Transferee Company w.e.f. 1.4.2010 subject to the approval/consent of the shareholders and confirmation by this Court. The salient features of the Scheme of Amalgamation have been specified in para-34 of the Company Petition No.201 of 2010. It is also stated that the 1st Transferor Company had filed Company Application No.981 of 2010 praying for dispensation of convening of the meeting of its shareholders and the same was ordered by this Court on 27.10.2010, as all the shareholders had given their no objection by means of affidavits. Similar applications, being Company Application Nos.982, 983, 984 and 985 of 2010 were moved by the 2nd, 3rd, 4th and 5th Transferor Companies for dispensation of convening of the meeting of their respective shareholders and the said applications were ordered by this Court on 27.10.2010 taking into consideration no objection expressed by the respective shareholders by means of affidavits. It is further explained by the petitioner companies that the proposed Scheme of Amalgamation by way of transfer of undertaking of the petitioner companies does not affect the rights and interests of the members of the Transferee Company and does not involve re- organization of the share capital of the Transferee Company. It is also explained that the shareholding and other rights of the members of the Transferee Company will remain unaffected as no new shares are being issued and there is no change in the capital structure. Further the Scheme of Amalgamation also does not affect the rights and interests of the creditors of the Transferee Company as the Transferor Companies have substantial assets in excess of their liabilities. Thus it is prayed by the petitioners/ Transferor Companies that the Scheme of Amalgamation proposed may be sanctioned and confirmed. These five petitions were admitted on 9.11.2010 and as per the order of this Court notices were published in newspapers under Rule 80 of the Companies (Court) Rules, 1959. However no objections have been received from any quarter as on this date for proposed Scheme of Amalgamation. The Official Liquidator filed separate Reports dated 25.11.2010 in the Company Petitions stating that as the Transferor Companies are wholly owned subsidiaries of the Transferee Company, no shares shall be issued by the Transferee Company on the sanction of Scheme of Amalgamation. It is also stated that as per the copies of the balance sheets made available, the Transferor Companies had not availed any secured or unsecured loans. It is also stated that the Scheme of Amalgamation had taken due care for protecting services of permanent employees of the Transferor Companies and that the records furnished had not revealed anything about pending litigation and prosecution either against or by the Transferor Companies and their Directors. Thus it was submitted by the Official Liquidator that the affairs of the Transferor Companies did not appear to have been conducted in a manner prejudicial in the interests of their members or to the public interest. A common affidavit has been filed by the Registrar of Companies, A.P., Hyderabad, dated 16.12.2010. As could be seen, the only objection raised by the Registrar of Companies is with regard to payment of stamp duty. However the said objection on the face of it is untenable since the Transferor Companies are subsidiaries of the Transferee Company and no shares are being allotted by the Transferee Company. Therefore, as rightly submitted by the learned counsel for the petitioners no stamp duty is payable under Article 20 (d) of Schedule I-A of the Indian Stamp Act, 1899. Having regard to the facts and circumstances noticed above and keeping in view that all the statutory requirements have been fulfilled and that the proposed Scheme of Amalgamation is not opposed to any provision of law or public interest, there is no impediment in granting sanction to the proposed Scheme of Amalgamation. Accordingly, all the Company Petitions are allowed and the Scheme of Amalgamation is approved. A copy of this order shall be filed shall be filed before the Registrar of Companies within 30 days from the date of receipt of this order. The parties to the Scheme or other persons interested shall be at liberty to apply to this Court for any directions that may be necessary in regard to working of the Scheme. The petitioner Companies shall pay a sum of Rs.3,000/- each to the Assistant Solicitor General of India, towards fee. All these Company Petitions are accordingly allowed. No costs. _____________ G. ROHINI, J. Dt. 21.12.2010 gbs