THE HON’BLE SRI JUSTICE G. BHAVANI PRASAD COMPANY PETITION Nos.142, 143 and 144 of 2010 COMMON ORDER: These three company petitions under Sections 391 to 394 of the Companies Act, 1956 are in respect of the scheme of arrangement and restructuring between the demerged company and resulting company and the scheme of amalgamation between the three transferor companies and the transferee company. The composite scheme envisages the demerger and transfer and vesting of the finance division’s business of Octant Interactive Technologies Limited into FIVE X FINANCE & INVESTMENT LIMITED on a going concern basis and reorganization of capital as well as merger of Swarnajyothi Agro & Exports Limited/first transferor, Vanishekar Green Energy (P) Limited/Second Transferor, Indrabathi Energies (P) Limited/Third transferor with Octant Interactive Technologies Limited/Transferee. The three company petitions are concerning the merger of the three petitioner transferor companies with the transferee company. The first transferor company/Swarnajyothi Agro & Exports Limited was incorporated on 15.09.2003 with its registered office opposite police lines, Secunderabad. As per the memorandum and articles of association, the main objects of the company are relating to refinement of oils from groundnut etc. and related activities including dealing in solvent extraction plants and oil mills etc. and also the object of entering into partnership or alignment for achieving its main objects or to amalgamate or to acquire, purchase etc. any interests or shares or securities of any other company with similar objects. The authorized share capital of the company is Rs.12.00 crores divided into equity shares of Rs.10/- each and the subscribed and paid up share capital is Rs.2,99,21,100/- divided into equity shares of Rs.10/- each. The audited balance sheet of the company as on 31.03.2009 is annexed to the petition. The first transferor company is an unlisted company. The second transferor company Vanishekar Green Energy (P) Limited was incorporated on 21.06.2008 with change of name on 01.01.2009 and with its registered office at police lines, Secunderabad. The objects of the company as per the memorandum and articles of association are about generating power supply and selling the same to Governments or other consumers of electricity and undertake related activities like construction and management of power stations, boiler houses, steam turbines etc. The company also intended to act as consultant or contractor in such activities and also pursue objects ancillary to main objects of the company. The authorized share capital of the company is Rs.5.00 lakhs and the same is fully subscribed and paid up divided into equity shares of Rs.10/- each. It also issued Rs.30.00 lakhs worth fully convertible debentures of the face value of Rs.100/- convertible into three lakh shares of the face value of Rs.10/- each. The audited balance sheet of the company as on 31.03.2009 is also annexed to the petition. The second transferor company is also an unlisted company. Indrabathi Energies (P) Limited/third transferor company was incorporated on 23.12.2008 with its registered office opposite police lines, Secunderabad. The said company also has as its main objects, as per the memorandum and articles of association, the generation, transmission and distribution of power and other related activities like construction and management of power stations, boiler houses etc. and also to act as consultants and contractors in such activities. The company has ancillary objects to main objects and its authorized share capital is Rs. 5.00 lakhs fully subscribed and paid up divided into equity shares of Rs.10/- each. The company issued Rs.10.00 lakhs worth fully convertible debentures of the face value of Rs.100/- convertible into one lakh shares of the face value of Rs.10/-. The audited balance sheet of the company as on 31.03.2009 is also annexed to the petition. The transferee company Octant Interactive Technologies Limited incorporated on 12.01.1994 had change of its name ultimately to the present name on 08.12.2008 with its registered office at Mumbai. The main objects of the company as per the memorandum and articles of association are mobilization of capital for finance, undertaking of bills discounting business and carry on business as financiers and undertake related activities like hire purchase, lease etc. The company also had its objects of manufacture and dealing in computer hardware, software etc., the business of digital cinema and also incidental and ancillary objects to the main objects. The authorized share capital of the company is Rs.26.00 crores and the subscribed and paid up capital is Rs.25,69,30,000/- divided into equity shares of Rs.10/- each. The audited balance sheet of the transferee company as on 31.03.2009 is also annexed. The transferee company is listed on Pune Stock Exchange and Ahmadabad Stock Exchanges trading under permitted category of BSC indonext. The transferee company obtained consent letters from both the stock exchanges and the scheme of amalgamation is for focusing on particular business, which would be advantageous to all the four companies and their shareholders. The boards of directors of the four companies approved the scheme in their respective meetings on 12.04.2010. The details of the composite scheme of arrangement and scheme of amalgamation are extracted in detail in all the three petitions and the employees of the transferor companies will continue to be employees of new company without any break or disadvantage in their services. The interests of the shareholders, creditors and debtors will continue and no way be prejudicially affected by the scheme and all the assets and liabilities of the transferor companies shall stand transferred to the transferee company with effect from the effective date. The transferor companies had to apply before the Company court at Hyderabad and the transferee company had to apply before the Company Court at Mumbai for sanctioning and for giving effect to the scheme of amalgamation and the scheme is subject to the orders of the said Courts. The companies are not facing any investigation or proceedings under any provisions of the Companies Act and the consent of secured and unsecured creditors has been furnished. The shareholders of all the three companies gave their consent and accordingly the required meetings are dispensed with. The transferee company already filed an appropriate petition before the High Court of Mumbai. Hence, the petitioner transferor companies sought for the scheme of arrangement as approved and / or consented by the shareholders of the respective companies to be confirmed and sanctioned so as to bind all the members, creditors and employees of the companies and directing the petitioner companies to cause certified copies of the orders passed herein to be delivered to the Registrar of companies, Andhra Pradesh, Hyderabad, within 30 days from the date of the respective orders for registration and consequential action, for the petitioner companies to stand dissolved without being wound up on the scheme becoming effective, for opportunity to the parties of the scheme or any interested persons to apply to this Court for any necessary direction for carrying out the composite scheme of arrangement and other appropriate orders. Notices of the petitions were given to the Regional Director, Ministry of Corporate affairs, Chennai, Registrar of Companies, Andhra Pradesh and the Official Liquidator apart from general notice by publication in Andhra Jyothi, Telugu Daily and the New Indian Express, English daily. Heard Sri Kezer Kharawala, learned counsel representing Sri A. Diwakar Rao, learned counsel for the petitioners, Ms.M.Ramya, learned counsel representing the learned Assistant Solicitor General and Sri M. Anil Kumar, learned counsel for the Official Liquidator. A thorough scrutiny of all the petitions and the enclosed materials furnished on behalf of the petitioners in all the petitions was done by Sri M. Anil Kumar, learned counsel for the official liquidator at the request of the Court. The reduction in the unsecured debts between 2009 and 2010, the identity of the persons to whom the amounts were shown to be due in the audited accounts ending with 31.03.2009 and correlation about the identity of the unsecured creditors described as State Bank of India, Global Factors Limited were found to be required to be explained. The petitioner in Company Petition No.144 of 2010 filed an additional affidavit along with copies of resolutions passed by the board of directors of the company on 12.04.2010, the auditors report by M/s. N. Siva Prasad Associates, Chartered Accountants dated 01.09.2010 along with the balance sheet as on 31.03.2010 duly authenticated by the Managing Director and Director on behalf of the company and the Chartered Accountants as well as a letter from Global Trade Finance Limited explaining the change of name of the company. The additional affidavit consequently stated that due to the submission of the audited balance sheet, the explanation for the change of name of the unsecured creditor and the said audited balance sheet explaining the reduction of the liability between 2009 and 2010, the relief sought for in the main petitions may be ordered. A perusal and consideration of the entire material on record, now discloses no factual or legal reasons for not granting the reliefs. The common affidavit of the Registrar of Companies refers to the necessity to have the approval of High Court of Mumbai, but the transferee company is stated to have already filed the necessary petition before the said High Court. No objection certificates from the creditors were already furnished and the liability of the transferee company to pay any stamp duty under the provisions of the Stamp Act undoubtedly remains. The typographical errors indicated by the Registrar of Companies in the common affidavit have been corrected. The reports of the Official Liquidator show that the affairs of the companies do not appear to have been conducted in a manner prejudicial to the interest of members or public interest and as required by the Official Liquidator in his reports, consent letters from the creditors were furnished and the other objections as already stated appear to have been satisfactorily answered. Therefore, the reliefs sought for have to be granted. Accordingly, all the three company petitions are allowed. The scheme of arrangement as approved and consented by the shareholders of the three petitioner companies is sanctioned and confirmed so as to be binding on all the members, creditors and employees of all the three petitioner companies and all other persons concerned. The petitioner companies shall cause certified copies of the order to be delivered to the Registrar of Companies, Andhra Pradesh, Hyderabad, within 30 days from today for registration and consequential action. The three petitioner companies shall stand dissolved from the effective date of the scheme of amalgamation without the necessity of being wound up and the parties to the scheme or any other persons interested in any of the companies shall be at liberty to apply to this Court for any direction that may be necessary for carrying out the composite scheme of arrangement. _____________________ G. BHAVANI PRASAD, J Date:06.10.2010 Rns