1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO.894 OF 2007 CONNECTED WITH COMPANY APPLICATION NO.1129 OF 2007 In the matter of the Companies Act I of 1956 AND In the matter of Section 391 and 394 of the Companies Act, 1956 AND In the matter of the Composite Scheme of Arrangement between Varroc Lighting Private Limited and Varroc Engineering Private Limited and Varroc Polymers Forgings Private Limited. Varroc Lighting Private Limited …........ Petitioner (Transferor Company) AND COMPANY PETITION NO. 895 OF 2007 CONNECTED WITH COMPANY APPLICATION NO. 1130 OF 2007 In the matter of the Companies Act I of 1956 AND In the matter of Section 391 and 394 of the Companies Act, 1956 AND In the matter of the Composite Scheme of Arrangement between Varroc Lighting Private Limited and Varroc Engineering Private Limited and Varroc Polymers Forgings Private Limited.. Varroc Engineering Private Limited …..…Petitioner (Transferee/Demerged Company) 2 AND COMPANY PETITION NO. 896 OF 2007 CONNECTED WITH COMPANY APPLICATION NO. 1131 OF 2007 In the matter of the Companies Act I of 1956 AND In the matter of Section 391 and 394 read with sections 100 to 105 of the Companies Act, 1956 AND In the matter of the Scheme of Arrangement between Varroc Lighting Private Limited and Varroc Engineering Private Limited and Varroc Polymers Forgings Private Limited. Varroc Polymers Private Limited …..…Petitioner (Resulting Company) Hemant Sethi i/b by Hemant Sethi & Co. Advocates for Petitioners Mr S.Ramakantha Deputy Official Liquidator in Company Petition No 894 of 2007. Ms. Heena Shah with S. K. Mohapatra for R.D. in all the Petitions. CORAM: A. M. KHANWILKAR J. DATE : 18TH JANUARY, 2008 PC: 1. Heard learned counsel for parties. 2. The sanction of the Court is sought under Section 391 to 394 read with sections 100 to 105 of the Companies Act, 1956 to Composite Scheme of Arrangement between Varroc Lighting Private Limited, the Transferor Company and Varroc 3 Engineering Private Limited,Transferor/Demerged Company and Varroc Polymers Private Limited, the Resulting Company for amalgamation of Varroc Lighting Private Limited into Varroc Engineering Private Limited and demerger of Polymer Business of Varroc Engineering Private Limited into Varroc Polymers Private Limited. 3. Counsel appearing on behalf of the Petitioners have stated that they 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. In the case of Varroc Polymers Private Limited in Company Petition No 896 of 2007. The Equity Shareholders in Extra Ordinary General meeting held on 30th October, 2007 has unanimously approved and passed Special Resolution for Reduction and Reorganisation of Share Capital pursuant to Composite Scheme of Arrangement in terms of Section 100 to 105 of the Companies Act, 1956.Same is annexed at Exhibit “G” of the Company Petition No 896 of 2007. 5. In view of averment made in paragraph 25 of the Company Petition No 896 of 2007 the reduction and reorganisation of Share Capital does not involve neither diminution of liability in respect of unpaid capital nor payment to any shareholder of any unpaid share capital account and the interest of the creditors of the Petitioner/Resulting Company are not affected by such reduction and the procedure under section 101(2) of the Companies Act,1956 has been dispensed with. 6. The only objection to the proposed Composite Scheme of Arrangement has been raised by Mr Narayan Totaram Ingle proprietor of M/s Amba Electric Works an Unsecured Creditor of Varroc Engineering Private Limited., the Transferee/ Demerged Company.It is stated that the objecting creditor has already filed a civil 4 suit before Civil Judge, Senior Division at Aurangabad. The learned advocate appearing on behalf of the Petitioner states that the Transferee/Demerged Company has filed affidavit in reply dated 10th January,2008. It is stated that the matter is admittedly subject matter of litigation in suit No 107/2006 pending before the Civil Judge, Senior Division at Aurangabad against which the Transferee/Demerged Company has filed its written statement. In affidavit in reply filed on behalf of the Transferee/Demerged Company it is stated that the objector cannot use scheme as instrument/tools to recover debts which are disputed and not admitted by the Transferee/Demerged Company. The learned advocate for the Petitioner further points out that the objecting Unsecured Creditor has not substantiated in what manner the Composite Scheme of Arrangement will affect the objecting Unsecured Creditor or the pending proceedings or rights of any of the Creditors. The learned advocate for the Petitioner states that in any event, the Composite Scheme of Arrangement does not affects the rights of the Creditors as there is no compromise or arrangement with the Creditors, and the Transferee/Demerged Company will continue to subsist as there is no dissolution of the Transferee/Demerged Company. The learned advocate further states that there is no reason why the relief in the nature of the claim for the sanction of the scheme should be defeated. In view thereof, the implementation of the scheme should not be held up on account of the aforesaid objection. 7. The Regional Director has filed his affidavit stating therein that the Composite Scheme of Arrangement is not prejudicial to the interest of shareholders and creditors and public. 5 8. The Official Liquidator has filed report in Company Petition No 894 of 2007 stating that the affairs of the Transferor Company has been conducted in proper manner. 9. Upon perusal of the entire material on record, in my opinion 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. 10. There is no objection to Composite Scheme of Arrangement save and except as stated in paragraph (6) hereinabove and since all the requisite statutory compliances have been fulfilled Company Petitions filed by the Transferor Company, the Transferee/Demerged Company and the Resulting Company are made absolute in terms of prayer clause (a) to (c) in Company Petition No.894 of 2007 i.e the Transferor Company and prayer clause (a) to (c) in Company Petition No.895 of 2007 i.e the Transferee/Demerged Company and prayer clause (a) to (f) in Company Petition No.896 of 2007 i.e the Resulting Company. 11. The Transferee/Demerged Company and the Resulting Company to lodge copy of this order and the Scheme with the concerned Superintendent of Stamps for the purpose of adjudication of stamp duty, payable, if any, on the same within 30 days of obtaining the authenticated and/or certified copy of this Order. 12. The Petitioners in all the Company Petition to pay cost of Rs.5000/- each to the Regional Director. Petitioner in Company Petition No 894 of 2007 to pay to the Official Liquidator, High Court, Bombay sum of Rs 5,000/-. Costs to be paid within 4 weeks from today. Petitioner to comply with statutory compliances, applicable, if any. 13. Petitioner in Company Petition No 896 of 2007 to publish notice of registration of order and minute of reduction by Registrar of Companies once each in the two local newspaper viz Lokmat Times in English and Lokmat Times in Marathi both 6 circulating in Aurangabad and in the Maharashtra Government Gazette within 14 days of registration aforesaid. 14. Filing and issuance of the drawn up order is dispensed with. 15. All concerned to act on a copy of this order alongwith scheme (in case of Company Petition No 894, 895 & 896 of 2007) and also form of minutes (in case of Company Petition No 896 of 2007) duly authenticated by Company Registrar, High Court, Bombay. (A. M. Khanwilkar J.)