THE HON’BLE Ms. JUSTICE G.ROHINI COMPANY PETITION No.174 OF 2010 Dated: 15.02.2011 In the matter of the Companies Act of 1956 (1 of 1956) And In the matter of Sections. 391 to 394 of the said Act And In the matter of the Scheme of Amalgamation And In the matter of SPS Textiles & Industries Limited (Transferor Company) And In the matter of Mynah Industries Limited (Transferee Company) and their respective Shareholders and creditors SPS Textiles & Industries Limited, having its Regd. office at Plot No.18, Street No.1, Sagar Society, Road No.2, Banjara Hills, Hyderabad-34, Rep. by its Director Mrs. Sarita Boorugu. .. Petitioner/ Transferor Company THE HON’BLE Ms. JUSTICE G.ROHINI COMPANY PETITION No.174 OF 2010 ORDER : The petitioner herein is SPS Textiles & Industries Limited (hereinafter referred to as ‘Transferor Company’). This petition is filed under Sections 391 to 394 of the Companies Act, 1956 to sanction the Scheme of Amalgamation of the petitioner-transferor company with Mynah Industries Limited (hereinafter referred to as ‘the transferee company’). The transferor company is a public limited company incorporated under the Companies Act, 1956 and its registered office is situated at Plot No.18, Street No.1, Sagar Society, Road No.2, Banjara Hills, Hyderabad. The main objects of the transferor company as set out in Memorandum of Association have been mentioned in para (4) of the Company Petition. It is stated that the authorized share capital of the Transferor Company is Rs.11,00,00,000/- divided into 1,10,00,000 equity shares of Rs.10/- each. The present issued, subscribed and paid up capital is Rs.10,14,20,000/- divided into 1,01,42,000 fully paid up equity shares of Rs.10/- each. The Transferee Company - Mynah Industries Limited - is also a public limited company which was originally incorporated on 12.03.1993 under the name and style of Rama Qualitex Limited w.e.f. 22.01.2009 vide Company Identification No.U17111TZ1993PLC006729. The registered office of the Transferee Company is situated at S.No.66/2, Mugalapalli Village, Hosur Taluk, Krishnagiri District, Tamilnadu-635105. The main objects have been specified in para 7 (c) of the Company Petition. The present authorized share capital of the Transferee Company is Rs.30,00,0000/- divided into 3,00,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid-up capital is Rs.29,07,90,600/- divided into 2,90,79,060 fully paid up equity shares of Rs.10/- each. It is stated that the Board of Directors of the Transferor Company having proposed amalgamation of the Transferor Company with the Transferee Company, passed a resolution on 25.06.2010 approving the Scheme of Amalgamation to be effective from 1.4.2009 subject to the approval /directions by this Court. All the 7 members of the Transferor company have given written consent for the proposed merger. Basing on the same, this Court by order dated 2.9.2010 in C.A.No.610 of 2010 dispensed with the meeting of the shareholders. It is further stated that there are no secured or unsecured creditors except 16 trade creditors and out of the said 16, the petitioner company had obtained no objection letters from 5 trade creditors constituting 97.20% of major value of credit. The consent letters of members and the no objection letters given by trade creditors have been annexed to the company petition. In pursuance of the notice ordered by this Court on 22.9.2010, the Official Liquidator filed a report vide OLR No.33/2011 stating that the petitioner company though had secured loan to an amount of Rs.10,54,00,000/- in respect of Stressed Assets Stabilization Fund (SASF), it had failed to furnish the consent letter. However it was stated that the petitioner company had paid the loan obtained from IDBI Bank under SASF. In the report filed by the Registrar of Companies, the following two objections have been raised: “(a) As the transferee company is having its registered office in Coimbatore in the State of Tamilnadu, the scheme is subject to approval of the Hon’ble High Court of Madras also. (b) The transferee company should pay the stamp duty wherever applicable as per the Regulations of Andhra Pradesh Stamp Act.” The petitioner filed a reply-affidavit stating that the petitioner company though obtained loan from IDBI Bank under SASF, the same was repaid and obtained no objection certificate on 19.4.2010. Form-17 filed by the Registrar of Companies has been produced before this Court to substantiate the said plea. So far as the objection No.2 that no due certificate was not filed in relation to unsecured loan of Rs.20,75,732/-, it is submitted that the petitioner company though borrowed loan for the purpose of its business from G. Saraswathi, who is the Director of the company, the same was obtained in the financial year 2008-2009 and the company had repaid the said amount in the financial year 2009-2010. The consent affidavit given by the said Director stating that no amount is outstanding has been placed before this Court. The said Director has also stated that she has no objection for the proposed Scheme of Amalgamation. With regard to the further objection that NOC had not been obtained from the Sales Tax Department in relation to unsecured loan of Rs.10,30,098/-, it is explained that the said liability is being defered till 31.5.2012 under the Sales Tax Department Scheme under Target 2000 and therefore the consent affidavit of the unsecured creditor is not required. It is also relevant to note that in view of the phrase “as the case may be” employed in Sections 391 (1) & (2) of the Companies Act, 1956, the consent of the unsecured creditors is not necessary for sanctioning the proposed Scheme of Amalgamation. Even with regard to the payment of Stamp duty, the law is well- settled that the same can be paid upon the sanction of the arrangement so as to make the amalgamation effective. In the circumstances, none of the objections raised are tenable and there can be no impediment for granting sanction of Scheme of Amalgamation as sought by the petitioner. The scheme is stated to be in the public interest of the company and it is not opposed to any provision of law or public interest. Hence, the proposed Scheme of Amalgamation is hereby sanctioned and the same shall be binding on all the parties. Accordingly, the proposed Scheme of Amalgamation is approved. A copy of this shall be filed before the Registrar of Companies within 30 days from the date of receipt of this order. A sum of Rs.3,000/- shall be paid by the petitioner company to the Assistant Solicitor General of India towards fee . The Company Petition is accordingly allowed. No costs. ______________ G. ROHINI, J. Dt. 15.02.2011 gbs