1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICITON In the matter of Sections 391 to 394 of Companies Act, 1956. And In the matter of Scheme of arrangement for amalgamation of 1. Dhanasingh Synthetics Pvt. Ltd. 2. Harnam Syntex Pvt. Ltd. And 3. One G. M. Fabrics Pvt. Ltd. With G. M. Knitting Industries Pvt. Ltd. COMPANY PETITION NO.47 OF 2009 CONNECTED WITH COMPANY APPLICATION NO.1684 OF 2008 Dhanasingh Synthetics Pvt. Ltd. ..Petitioner / 1st Transferor Company AND COMPANY PETITION NO.48 OF 2009 CONNECTED WITH COMPANY APPLICATION NO.1685 OF 2008 Harnam Syntex Pvt. Ltd. ..Petitioner / 2nd Transferor Company AND COMPANY PETITION NO.49 OF 2009 CONNECTED WITH COMPANY APPLICATION NO.1686 OF 2008 One G. M. Fabrics Pvt. Ltd. ..Petitioner / 3rd Transferor Company Ananth Iyengar - Advocate for Petitioners 2 Mr. C. J. Joy with R. Ambekar i/b S. K. Mohapatra for the Regional Director in all the Petitions. Mr. S. Ramakantha, Dy. O. L. in all the Petitions. CORAM : A. M. KHANWILKAR J DATE : 8th May 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 between Dhanasingh Synthetics Pvt. Ltd. (the first Transferor Company), Harnam Syntex Pvt. Ltd. (the second Transferor Company), and One G. M. Fabrics Pvt. Ltd. (the third Transferor Company), the Transferor Companies and G. M. Knitting Industries Pvt. Ltd., the Transferee Company and their Respective Shareholders. 3. Counsel appearing on behalf of the Petitioners has stated that the Petitioners have complied with all the requirements as per directions of this Hon’ble Court and they have filed necessary affidavits of compliance in the Court. 4. The Regional Director has filed his affidavit in reply and has stated that save and except the observation in para 6 which is 3 reproduced hereunder, the Scheme is not prejudicial to the interest of shareholders and public. 6 That Deponent further submits that, as per clause 11.3 of the scheme, the excess, if any, of the value of the assets over the liability of the Transferor Companies vested in the Transferee Company pursuant to this scheme as recorded in the books of account of the Transferee Company shall, after adjusting the aggregate face value of the shares issued by the Transferee Company to the members of the Transferor Companies pursuant to the scheme and the amounts recorded in terms of clause 11.2 of the scheme, be credited to the General Reserve Account in the books of the Transferee Company. This appears to be not in consonance with generally accepted Accounting Principle which provide that any profits arising out of a capital transaction like merger or demerger ought to be treated as capital profits and hence shall be transferred to Capital Reserve and not to General Reserve. The petitioners through their counsel undertake to treat the excess, if any, as capital profits and to transfer the same to Capital Reserve Account in the Books of Accounts of Transferee Company, Clause 11.3 of the Scheme shall stand modified accordingly. The said undertaking is accepted. 5. The Official Liquidator in all the Company Petitions has filed his report stating that the affairs of the Transferor Companies have 4 been conducted in a proper manner and that the Transferor Companies may be ordered to be dissolved. 6. Upon perusal of the entire material 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 and the Official Liquidator have stated that the Scheme as proposed is not prejudicial to the interest of Shareholders, Creditors, and the Public. 7. There is no objection to the Scheme and since all the requisite statutory compliances have been fulfilled, Company Petition Nos.47 of 2009, 48 of 2009 and 49 of 2009 filed by the Transferor Companies are made absolute in terms of prayer clauses (a) to (g). 8. The Transferee Company to lodge copy of this order and the Scheme with the concerned Superintendent of Stamps for the purpose adjudication of stamp duty, payable, if any, on the same within 30 days of obtaining the authenticated and/or certified copy of this Order. 9. The Petitioners in all the three Company Petitions to pay cost of Rs.7500/- each to the Regional Director. Petitioner in Company Petition Nos.47 of 2009, 48 of 2009 and 49 of 2009 to pay to the Official Liquidator, High Court, Bombay a sum of Rs.7,500/- each. 5 Cost to be paid within four weeks from today. Petitioners to comply with statutory compliances, applicable, if any. 10. Filing and issuance of the drawn up order is dispensed with. 11. All concerned authorities to act on a copy of this order and the Scheme duly authenticated by Company Registrar, High Court, Bombay. COMPANY JUDGE.