THE HONOURABLE SRI JUSTICE N.V. RAMANA Company Petition Nos.180 and 181 of 2009 COMMON ORDER: The petitioners, namely M/s. Jasper Industries Private Limited (hereinafter referred to as ‘the Transferor Company’), and M/s. B. Seshagiri Rao Transport Contractors Private 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. B. Seshagiri Rao & Sons Industries Private Limited”, on 30.11.1987, and later, its name was changed to the present one with effect from 26.03.1998, and its registered office is situated at Golden Edifice, 1st Floor, Opp. Visweswarayya Statue, Khairatabad Circle, Hyderabad- 500 004. The authorized share capital of the Transferor Company is Rs.3,50,00,000/- divided into 30,00,000 equity shares of Rs.10/- each and 10,000 equity shares of Rs.500/- each. Its present issued, subscribed and paid up capital is Rs.2,47,57,130/- divided into 24,75,713 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 manufacturers, assemblers of, dealers in, hirers, repairers, cleaners, stores, warehouses, of motor cars, motor cycles, cycle-cars, motors, scooters, boats and ships, vans, and other vehicles and conveyances of all descriptions for carrying passengers or other personnel, goods, commodities, produce, cargoes and other things on land or sea or by air (all hereinafter comprised in the term “Motors and other things”) whether propelled or assisted by means of petrol, spirit, steam, gas, electrical, animal or other powers, and all engines, chassis, bodies, turbines, tanks, tools, implements, accessories and other things, materials and products used for, in or in connection with motors and other things, etc. The Transferee Company was incorporated on 31.03.1982. Its registered office is situated at 1st Floor, Golden Edifice, Opp. Visweswarayya Statue, Khairatabad Circle, Hyderabad- 500 004. The authorized share capital of the Transferee Company is Rs.5,00,000/- divided into 1,000 equity shares of Rs.500/- each. Its present issued, subscribed and paid up capital is Rs.4,20,000/- divided into 840 equity shares of Rs.500/- each fully paid up. The main objects of the Transferee Company are to acquire, take over by purchase or otherwise all or any of the assets and liabilities together with or without goodwill and to exploit the existing rights including the rights in the agreement with Associated Cement Companies Limited by the Partnership firm carrying on business as transporters under the name and style of M/s. B. Seshagiri Rao, etc. The Transferor Company is having two divisions namely (i) Sales and Marketing Division and (ii) Service and Workshop Division, both situated at Benz Circle, Bundar Road, Vijayawada. Considering the exigencies of the business of the Transferor Company, and having regard to its interest in sales and service businesses, the Board of Directors of the respective companies felt that, for greater focus on different activities and to ensure accelerated growth and improved profitability in specific areas of operations, it would be advantageous to re-organize the companies and de-merge the Service and Workshop Division of the Transferor Company into the Transferee Company. The Board of Directors further felt that the arrangement/ re-organization is essential to ensure better business opportunities and focus on accelerated growth of the individual segments in the current scenario in automobile business. Accordingly, the Board of Directors, after holding meetings with all concerned, decided to take appropriate steps to carry on effectively and efficiently the business of Sales Division and Service & Workshop Division independently in the larger interest of the shareholders, creditors, employees etc. The Board of Directors of the Transferor and Transferee Companies in their respective meetings held on 24.08.2009 have approved the proposed Scheme of Arrangement between the companies and their respective shareholders, to be effective from 01.03.2009, subject to approval of the shareholders and confirmation by the Court. This Court, taking into consideration the affidavits filed by the shareholders of the Transferor and Transferee Companies expressing their ‘no objection’ to the Scheme of Arrangement, by orders dated 27.10.2009 passed in C.A. Nos.1872 and 1873 of 2009, dispensed with the convening of the meeting of their respective shareholders. 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 17.11.2009, this Court, while admitting the Company Petitions, issued notice to the Central Government and the Official Liquidator, and ordered publication of the notice of admission of the Company Petitions in “Business Standard” and “Andhra Bhoomi” of Hyderabad editions. The petitioners took out notices, as ordered by this Court, and also caused 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, raising an objection that, as the Transferor Company has availed secured and unsecured loans and the Transferee Company has availed unsecured loans, both the companies have to obtain and produce the consent/No Objection Certificates from the said creditors. To satisfy the said objection raised by the Registrar of Companies, today, the counsel for the petitioners filed before this Court the letters of the secured and unsecured creditors expressing ‘No Objection’ for the proposed Scheme of Arrangement. Heard the learned counsel on record and perused the Scheme of Arrangement. As noted above, the shareholders and secured and unsecured creditors of both the companies 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 Service and Workshop 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 objections whatsoever have been received by this Court from any quarter. The Scheme, apart from being in the best interest of the companies and their respective shareholders, creditors and employees, 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. ___________________________ JUSTICE N.V. RAMANA 19th February, 2010. IBL