1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO. 938 OF 2009 CONNECTED WITH COMPANY APPLICATION NO. 1094 OF 2009 BALAJI BULLIONS & COMMODITIES (INDIA) PRIVATE LIMITED. …………Petitioner / Demerged Company. AND COMPANY PETITION NO. 941 OF 2009 CONNECTED WITH COMPANY APPLICATION NO. 1095 OF 2009 HILLVIEW IMPEX PRIVATE LIMITED. …………Petitioner / Resulting Company. In the matter of the Companies Act 1 of 1956; AND In the matter of Sections 391 to 394 of the Companies Act, 1956; AND In the matter of Scheme of Arrangement between Balaji Bullions & Commodities (India) Private Limited (the Demerged Company) and Hillview Impex Private Limited (Resulting Company) and their respective shareholders Ms. Alpana Ghone with Mr. Rajesh Shah i/b Rajesh Shah & Co., Advocates for the Petitioners. Mr. Shyam Mehta with Ms. Neeta Masurkar i/b Mr. S.K. Mohapatra for Regional Director in both Petitions. CORAM: S. J. Kathawalla, J. DATE: 5th May, 2010. PC: 1. Heard learned counsel for the parties. 2 2. The sanction of the Court is sought under Sections 391 to 394 of the Companies Act, 1956, to the Scheme of Arrangement between Balaji Bullions & Commodities (India) Private Limited (the Demerged Company) and Hillview Impex Private Limited (Resulting Company), for demerger of the specified assets and specified liabilities of Balaji Bullions & Commodities (India) Private Limited, into Hillview Impex Private Limited, the Resulting Company. 3. Counsel appearing on behalf of the Petitioners has stated that they have complied with all requirements as per directions of this Court and they have filed necessary affidavits of compliance in the Court. Moreover, Petitioner Companies undertake to comply with all statutory requirements, if any, as required under the Companies Act, 1956 and the Rules made there under. The Undertaking is accepted. 4. The Regional Director has filed an affidavit stating that as per the letter sent to them, they have received the report from the concerned Registrar of Companies, Mumbai, wherein it is stated that they have received a complaint from Dr. Kirit Somaiya, Former Member of Parliament against Natraj Financial Services Limited and M/s. Luxury Export Private Limited in connection with Madhu Koda Finance Scam. He has further stated that the investigations are also being conducted by investigating agencies viz., Enforcement Directorate, Income Tax Department, CBI in connection with the Madhu Koda Finance Scam. The Regional Director has further stated that the subject scheme is purportedly a scheme of demerger whereby certain alleged assets and liabilities of Balaji Bullions and Commodities (India) Pvt. Ltd. are being transferred to Hillview 3 Impex Pvt. Ltd. and that in reality there is no demerger but merely a transfer of shares of one Natraj Financial & Services Ltd. by Balaji Bullion to Hillview, the Resulting Company. He has also stated that Hillview is a wholly owned subsidiary of Balaji Bullions and it is not understood why the said shares are being transferred by Balaji Bullions to Hillview under the garb of a Scheme of Arrangement. It is also stated that Balaji Bullions, Hillview and Natraj are all companies belonging to the Madhu Koda Group and that the activities of the Companies and other entities forming part of the Madhu Koda Group are being investigated by various agencies and regulators like CBI, RBI, ED and IT Department and according to him it is believed that these companies are involved in money laundering activities to the tune of thousand of crores of rupees. 5. The Petitioner/Demerged Company has filed its affidavit wherein all the allegations and contentions made by the Regional Director in his affidavit have been denied by the Demerged Company and it is stated that the allegations raised by the Regional Director liable to be rejected for the reasons stated in the said Affidavit. 6. The Petitioner counsel also pointed out that the Scheme is of Demerger of investment division of the Demerged Company into its wholly owned Subsidiary. The Scheme has unanimous support of the respective shareholders and creditors of both the Demerged Company and the Resulting Company. The Petitioners Counsel pointed out that clause No. 8 of the Scheme provides for the Legal proceedings to be continued and enforced by or against Demerged Company shall be continued with resulting company and scheme is not going to be affected in any manner. 4 7. Today, Counsel appearing for Regional Director tendered Further Affidavit dated 5th May, 2010. In the said affidavit it is stated that they have considered the scheme carefully and according to them, the present scheme is not against any provisions of the Companies Act, 1956 and prima facie, appears to be in order, however, the Scheme may be considered without prejudice to the investigations initiated by other regulatory agencies. 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 any public policy. None of the parties concerned have come forward to oppose the Scheme. Moreover, the Regional Director has stated that the Scheme as proposed is not prejudicial to the interest of shareholders and creditors. 9. There is no objection to the Scheme save and except as stated in paragraph 4 hereinabove, since all the requisite statutory compliances have been fulfilled. 10.Upon perusal of the report of the Regional Director, Affidavit in reply of the Petitioner and the arguments advanced before me by the both the Counsels, I do not see any reason as to why the present Scheme should not be allowed. In the circumstances, both the Company Petitions are made absolute in terms of prayer clauses (a) to (h). 11.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 Stamps for 5 the purpose of adjudication of stamp duty payable, if any, on the same within 60 days from the date of the order. 12.The Petitioners in both the Company Petitions to pay cost of Rs.7,500/- each to the Regional Director. 13.Filing and issuance of the drawn up order is dispensed with. 14.All concerned authorities to act on a copy of this order along with Scheme duly authenticated by the Company Registrar, High Court, Bombay. 15.This order will in no way prejudice the pending investigations. (S. J. Kathawalla, J.)