THE HONOURABLE SRI JUSTICE N.V. RAMANA Company Petition Nos.206 and 207 of 2009 COMMON ORDER: The petitioners, namely M/s. CMR Hotels Textiles and Jewellers Private Limited (hereinafter referred to as ‘the Transferor Company’) and M/s. Chandana Brothers Textiles and Jewellers 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 Amalgamation, as approved by their shareholders. The Transferor Company was originally incorporated on 08.11.2000, under the name and style of “M/s. Meghna Inns And Hotels Private Limited” and, later, its name was changed to the present one with effect from 27.01.2009. Its registered Office is situated at M.C.H.D.Nos.1-8-88/1 to 5, 1-1-89 to 91, Plot No.67/A, Kings Way, R.P. Road, Secunderabad- 500 003. The authorized share capital of the Transferor Company is Rs.7,00,00,000/- divided into 70,00,000 equity shares of Rs.10/- each. Its present issued, subscribed and paid up capital is Rs. 6,66,00,000/- divided into 66,60,000 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 Hotel, Motel, Inns, Restaurant, Café, Tavern, Beer-House, Refreshment-Room and Lodging-House keepers, Licensed Victuallers, Wine, Beer and Spirit Merchants, Brewers, Malsters, Distillers, Importers and manufacturers of aerated, mineral and artificial waters and other drinks, purveyors and caterers for public amusements generally, etc. The Transferee Company was incorporated on 11.02.2004 and its registered office is situated at UG-1 to UG5, Bhuvana Towers, and M.C.H. D.Nos.1-2-166 to 193, S.D. Road, Secunderabad- 500 003. The authorized share capital of the Transferee 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. 9,75,15,000/- divided into 97,51,500 equity shares of Rs. 10/- each fully paid up. The Transferee Company has been incorporated with the main objects of carrying on the wholesale and retail trade in the varieties and kinds of sarees, textiles, cloth, garments, readymades, other dress materials and other allied products, as buyers, sellers, dealers, exporters and importers, etc. The Transferor and Transferee Companies are closely held private limited companies. As the activities and businesses of both the companies are common, it was felt to amalgamate the Transferor Company with the Transferee Company so as to overcome administrative inconveniences, reduce overheads and consolidate the business for better margins and volumes. Further it was felt that the amalgamation would result in synergy in operations and optimum utilization of resources and facilities and would enable the amalgamated company to carry on the combined business more economically and efficiently, with the combined reserves, assets and cash flows of both the companies. Hence, it has been decided to amalgamate the Transferor Company with the Transferee Company, which would be in the best interest of the companies, their respective shareholders, creditors, employees and all the concerned. The Board of Directors of the Transferor and Transferee Companies in their respective meetings held on 30.10.2009 have approved the proposed Scheme of Amalgamation, to be effective from 01.04.2009, subject to approval of the shareholders and confirmation by the Court. This Court, taking into consideration the affidavits filed by the shareholders, share application money depositors, secured and unsecured creditors of both the companies, expressing their ‘no objection’ to the Scheme of Amalgamation, dispensed with the convening of their meetings, by orders dated 22.12.2009 passed in C.A. Nos. 2047, 2048, 2049, 2050, 2051, 2052 and 2053 of 2009. Thereafter, the petitioners filed the present Company Petitions, praying to sanction the Scheme of Amalgamation, as approved by their shareholders to be binding on all their shareholders, creditors and all the concerned. On 18.01.2010, this Court, while admitting the Company Petitions, issued notices to the Regional Director, Ministry of Corporate Affairs, Chennai, Registrar of Companies, Andhra Pradesh, Hyderabad, and the Official Liquidator, and ordered publication of the notice of admission of the Company Petitions in “Andhra Jyothi” and “Deccan Chronicle” 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 and the Official Liquidator filed report bearing OLR No.41 of 2010 in C.P.No.206 of 2009. In his report, the Official Liquidator stated that, upon verification of material papers and information made available to him by the Transferor Company, the affairs of the Transferor Company do not appear to have been conducted in a manner prejudicial to the interests of its members or to the public interest. In his common affidavit, the Registrar of Companies, Andhra Pradesh, Hyderabad, raised an objection that the Transferee Company should pay the Stamp Duty as per the provisions of the Stamp Act. Answering the said objection taken by the Registrar of Companies, learned counsel for the petitioners submits that, upon sanction of the Scheme, the Transferee Company will necessarily pay the stamp duty as required under the Stamp Act, so as to make the Scheme effective, and, in fact, the Scheme itself imposes such obligation. Heard the learned counsel for the petitioners and perused the Scheme of Amalgamation. The Transferor and Transferee Companies are closely held companies and engaged in similar businesses. The Memorandum of Associations of the Transferor and Transferee Companies, enable amalgamation with other companies that are engaged in similar businesses. As noted above, the shareholders, share application money depositors, secured and unsecured creditors of the companies have consented to the Scheme of Amalgamation of the Transferor Company with the Transferee Company, as proposed and resolved by the Board of Directors of the respective companies. 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 Official Liquidator, in his report, reported that the affairs of the Transferor Company appear to have not been conducted in a manner prejudicial to their members or public interest, and the objection taken by the Registrar of Companies, with regard to the stamp duty payable by the Transferee Company, has been satisfactorily answered by the learned counsel for the petitioners, stating that the required stamp duty will be paid as per the provisions of the Stamp Act, upon sanction of the Scheme. The Scheme is not opposed to any provision of law or public interest, apart from being in the best interest of the companies and their respective shareholders, creditors and employees. Hence, I am of the considered opinion that this Court also should not have any objection to the sanction of the Scheme of Amalgamation. Hence, the Scheme of Amalgamation is approved. By reason of approval of the Scheme of Amalgamation, the Transferor Company shall stand dissolved without going through the process of winding up. Accordingly, the Company Petitions are allowed. The Transferor and Transferee Companies shall serve a copy of this order on the Registrar of Companies, Andhra Pradesh, Hyderabad, within a period of four weeks from the date of receipt of a copy of this order. The Transferor and Transferee Companies shall pay a sum of Rs. 3,000/- each to the Assistant Solicitor General, towards fee. No costs. ___________________________ JUSTICE N.V. RAMANA 26th February, 2010 IBL