IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY SCHEME PETITION NO.105 OF 2011 CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.24 OF 2011 In the matter of the Companies Act, 1956 And In the matter of Section 391 and 394 of the Companies Act, 1956 And In the matter of Scheme of Amalgamation between Sangam Laboratories Limited With Camlin Fine Chemicals Limited SANGAM LABORATORIES LIMITED ….Petitioner (Transferor Company) Mr. Satyan S. Israni, Advocate for the Petitioner. Ms. Jyotsna Pandhi i/b. H. P. Chaturvedi for Regional Director. Dr. T. Pandian, Official Liquidator present. CORAM: S. J. VAZIFDAR, J. DATED: 21st April, 2011 P.C.: 1. Heard learned Counsel for parties. 2. The sanction of the Court is sought under Sections 391 and 394 of the Companies Act, 1956, to the Scheme of Amalgamation of 2 Sangam Laboratories Limited, the Transferor Company with Camlin Fine Chemicals Limited, the Transferee Company. 3. The Counsel appearing on behalf of the Petitioner has stated that they have complied with all the requirements as per the directions of this Court and they have filed necessary Affidavits of compliance in the Court. Moreover, the Petitioner Company also undertakes to comply with all the statutory requirements, if any, as required under the Companies Act, 1956 and the Rules made thereunder. The said undertakings are accepted. 4. The Counsel for the Petitioner submits that the Petitioner Company is a wholly owned subsidiary of Camlin Fine Chemicals Limited, the Transferee Company and that by an order passed by this Court in Company Summons for Direction No.24 of 2011 on 14th January, 2011, the filing of separate proceedings under Section 391 to 394 of the Act by the Transferee Company was dispensed with. 5. The Regional Director has filed his Affidavit stating therein that save and except as stated in paragraph 6(a) to 6(c) of the said Affidavit, it appears that the Scheme is not prejudicial to the interest of the shareholders and the public. 6. In paragraph 6(a) to 6(c) of the said Affidavit, it is stated that:- a) “Clause 2.14 of the Scheme deals with change in Main Objects of the Memorandum of Association of the Transferee Company. In this 3 connection, the Transferee Company may be directed to comply with Section 40 read with section 18 of the Act and to file amended copy of Memorandum of Association alongwith Form No.21 with the Registrar of Companies. b) It is respectfully submitted that transferor company is not holding any investment in the transferee company. However, clause No.2.12 of the scheme provides for cancellation of investment/cross holding held by the transferor company and consequential reduction of share capital under section 100 to 104 of the Companies Act, 1956. Hence, clause No. 2.12 becomes redundant and may be deleted. c) In clause No.2.15(f) of the scheme, it is stated that any surplus arising out of amalgamation shall be credited to the General Reserve in the books of the Transferee Company. In this connection it is respectfully submitted that the Transferee Company shall not utilize the said reserve for the purpose of declaring dividend in future out of this reserves so created as the same cannot be termed as a free reserve.” 7. As far as the observation in paragraph 6(a) of the said Affidavit is concerned, the Counsel on behalf of the Petitioner Company undertakes that the Transferee Company shall comply with the provisions of Section 18 read with Section 40 of the Companies Act and shall file the amended copy of Memorandum of Association 4 alongwith the Form No.21 with the Registrar of Companies in connection with the change in Main Objects of the Transferee Company. The said undertaking is accepted. 8. So far as the observation in paragraph 6(b) of the said Affidavit is concerned, the Counsel on behalf of the Petitioner Company seeks leave of the Court to carry out necessary amendment in the Scheme by deleting Clause 2.12 of the Scheme. The leave to amend is granted. Amendment to be carried out within two weeks from today. 9. So far as the observation in paragraph 6(c) of the said Affidavit is concerned, the Counsel on behalf of the Petitioner Company undertakes that the any surplus arising out of amalgamation shall be credited to the General Reserve in the books of the Transferee Company and the Transferee Company shall not utilize the said reserve for the purpose of declaring dividend in future out of this reserves so created as the same will not be termed as a free reserve. The said undertaking is accepted. 10. The Official Liquidator has filed his report stating that the affairs of the Transferor Company have been conducted in a proper manner and that the Transferor Company may be ordered to be dissolved. 5 11. From the material placed on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy. None of the parties concerned have come forward to oppose the Scheme. 12. There is no objection to the Scheme and since all the requisite statutory compliances have been fulfilled, Company Scheme Petition No.105 of 2011 filed by the Transferor Company is made absolute in terms of prayers (a) to (k). 13. The Transferor Company to lodge a copy of this order and the Scheme duly authenticated by the Company Registrar, High Court, Bombay, with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty payable, if any, on the same within 60 days from the date of the order. 14. The Transferor Company to pay costs of Rs.10,000/- each to the Official Liquidator and Regional Director. Costs to be paid within four weeks from today. 15. Filing and issuance of the drawn up order is dispensed with. 16. All concerned authorities to act on a copy of this order alongwith the Scheme duly authenticated by the Company Registrar, High Court, Bombay. (S. J. VAZIFDAR, J.)