THE HONOURABLE SRI JUSTICE N.V. RAMANA Company Petition Nos.200 and 201 of 2009 COMMON ORDER: The petitioners, namely M/s. Liquors India Limited (hereinafter referred to as ‘the Transferor Company’), and M/s. Microbial Technologies India Limited (hereinafter referred to as ‘the Transferee Company’), which are registered under the provisions of the Companies Act, 1956 (hereinafter referred to as ‘the Act’) in the State of Andhra Pradesh, have filed these Company Petitions under Sections 391 and 394 of the Act, praying to sanction the Scheme of Arrangement, as approved by their respective shareholders. The Transferor Company was originally incorporated as a private limited company, under the name and style of “M/s. Liquors India Private Limited”, on 16.01.1975, and later, its name was changed to the present one with effect from 18.01.1991, and its registered office is situated at 8-120, IDA, Nacharam, Hyderabad-500 076. The authorized share capital of the Transferor Company is Rs.10,00,00,000/- divided into 1,00,00,000 equity shares of Rs.10/- each. Its present issued, subscribed and paid up capital is Rs.4,35,19,000/- divided into 43,51,900 equity shares of Rs.10/- each fully paid up. The Transferor Company has been incorporated with the main objects of carrying on the business of brewers, distillers, maltsters, manufacturers and merchants in all aspects thereof, etc. The Transferee Company was incorporated on 20.12.2005. Its Registered Office is located at 408, Topaz Building, Panjagutta, Hyderabad – 500 082. The authorized share capital of the Transferee Company is Rs.1,00,00,000/- divided into 10,00,000 equity shares of Rs.10/- each. Its present issued, subscribed and paid up capital is Rs. 5,00,000/- divided into 50,000 equity shares of Rs.10/- each fully paid up. The Transferee Company has been incorporated with the main objects of carrying on the business of manufacturing, processing, distilling, compounding, formulating, cell harvesting, clarification, isolation, concentration, purification, contaminant removal, acquiring, buying, selling, importing, exporting and dealing in all kinds of biosynthetic products from microbial fermentation, mammalian cell culture, transgenics, human blood, etc. The Transferor Company is having three divisions namely liquor division, chemical division and shrimp/hatchery division. In order to cater to the needs of Scotch manufacturers in the world and also chemical companies and to ensure better operational management and focus on accelerated growth of individual segments, which is essential in the current liberalized scenario to meet the global practices, standards and competition, it was felt to reorganize the companies and de-merge the Chemical Division of the Transferor Company, along with its fixed assets and relatable liabilities, into the Transferee Company, which will be beneficial to both the companies, their shareholders, creditors and employees. The Board of Directors of the Transferor and Transferee Companies in their respective meetings held on 30.08.2008 have approved the proposed Scheme of Arrangement between the companies and their respective shareholders, to be effective from 01.04.2008 subject to approval of the shareholders and confirmation by the Court. The Transferor Company has availed secured loan to the tune of Rs.11,34,28,499/- and the letter of the secured creditor namely State Bank of India, indicating that it has no objection for sanction of the proposed Scheme of Arrangement, has been filed before this Court. This Court, by order dated 26.10.2009 passed in Company Application No.1865 of 2009, ordered convening of meetings of the shareholders and unsecured creditors of the Transferor Company on 05.12.2009, for the purpose of considering the Scheme of Arrangement, and appointed an Advocate as Chairperson for the said meetings, and as directed by this Court, notices of the meetings were sent individually to all the equity shareholders and unsecured creditors and also published in the newspapers. On 05.12.2009, the meetings of the shareholders and unsecured creditors were convened under the chairmanship of the Advocate appointed by this Court. The Advocate, having conducted the meetings, filed reports on 10.12.2009 stating that the meeting of shareholders was attended by 19 shareholders in person and 17 shareholders by proxies and all of them voted in favour of the resolution and no votes were cast against the resolution; whereas the meeting of unsecured creditors was attended by 14 unsecured creditors in person and 2 unsecured creditors by proxies and, out of them, 14 unsecured creditors voted in favour of the resolution and 2 unsecured creditors voted against the resolution. The Transferee Company has no secured and unsecured creditors, and, taking into consideration the affidavits filed by the shareholders of the Transferee Company, expressing their ‘no objection’ to the Scheme of Arrangement, this Court dispensed with the convening of the meeting of the shareholders of the Transferee Company, by order dated 26.10.2009 passed in C.A.No.1866 of 2009. Thereafter, the petitioners filed the present Company Petitions, praying to sanction the Scheme of Arrangement, as approved by their shareholders to be binding on all their members, creditors and employees. On 23.12.2009, this Court, while admitting the Company Petitions, issued notice to the Regional Director, Ministry of Corporate Affairs, Chennai, and ordered publication of the notice of admission of the Company Petitions in “Business Standard” and “Andhra Bhoomi” of Hyderabad editions. As ordered, the petitioners took out notices to the Registrar of Companies, Andhra Pradesh, Hyderabad, the Regional Director, Ministry of Corporate Affairs, Chennai, and also by way of paper publication and filed memo of proof of service into Court. The notices having been served, the Registrar of Companies, Andhra Pradesh, Hyderabad, filed common affidavit stating that the Regional Director, Ministry of Corporate Affairs, Chennai, who is the competent authority on behalf of the Central Government, examined the scheme carefully with reference to the material papers made available to him and upon such examination, it was decided not to make any objection to the Scheme of Arrangement and to leave the matter to be decided by this Court on merits. Heard the learned counsel on record and perused the Scheme of Arrangement. As noted above, the shareholders of both the companies and the secured creditors and requisite majority of unsecured creditors of the Transferor Company have consented to the Scheme of Arrangement as proposed and resolved by the Board of Directors of the respective companies, providing for de-merger of Chemical Division of the Transferor Company into the Transferee Company. Though the notice of admission of the Company Petitions was taken out by way of paper publications, no objection whatsoever have been received by this Court from any quarter, and that the Regional Director, Ministry of Corporate Affairs, Chennai, has also not raised any objection for sanction of the Scheme, which is in the best interest of the companies and their respective shareholders, creditors and employees. That apart, the Scheme is not opposed to any provision of law or public interest. Hence, I am of the considered opinion that this Court also should not have any objection to the sanction of the Scheme of Arrangement. Hence, this Court hereby sanctions the Scheme of Arrangement, as approved by the shareholders of both the companies, and hereby declares that the same is binding on all the shareholders, creditors and employees of both the companies. The parties to the Scheme of Arrangement or other persons interested shall be at liberty to apply to this Court for any directions that may be necessary in regard to the working of the Scheme of Arrangement. The Transferor and Transferee companies shall pay the costs of these petitions set at Rs.3,000/- each to the learned Assistant Solicitor General, and that the Transferor and Transferee companies do file with the Registrar of Companies a certified copy of this order within 30 days from this date. The Company Petitions are allowed accordingly. _________________ N.V. RAMANA, J. 19th February, 2010. IBL