Gujarat High Court
General vs Respondent(S) on 3 May, 2010
Author: M.R. Shah
Bench: M.R. Shah
Gujarat High Court Case Information System
Print
COMP/219/2009 6/ 6 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
COMPANY
PETITION No. 219 of 2009
In
COMPANY
APPLICATION No. 400 of 2009
With
COMPANY
PETITION No. 220 of 2009
In
COMPANY
APPLICATION No. 399 of 2009
For
Approval and Signature:
HONOURABLE
MR.JUSTICE M.R. SHAH
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1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To
be referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
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GENERAL
MECHANICAL WORKS PRIVATE LIMITED - Petitioner(s)
Versus
.
- Respondent(s)
=========================================
Appearance :
MR
PAVAN S GODIAWALA for
Petitioner(s) : 1,
None for Respondent(s) :
1,
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CORAM
:
HONOURABLE
MR.JUSTICE M.R. SHAH
Date
: 03/05/2010
COMMON
ORAL JUDGMENT
1. Company Petition No.219/2009 is filed by the petitioner General Mechanical Works Pvt. Ltd. (hereinafter referred to as 'the transferee company') for an appropriate order of sanctioning the Scheme of arrangement in the nature of Amalgamation of GMW Projects Ltd. (hereinafter referred to as 'the transferor company') with the petitioner - General Mechanical Works Pvt. Ltd..
2. Company petition No.220/2009 is filed by transferor company for sanctioning the Scheme of arrangement in the nature of Amalgamation of the transferred company with the transferee company under Sections 391 to 394 of the Companies Act, 1956.
3. It has been submitted on behalf of the transferor company that the main objects of some of the transferor company and as set out in its memorandum and article of association are (1) to design, engineer, fabricate, commission, test, erect, produce, manufacture, sell, supply steel and structures of various types and sizes for station building. T.G. Bay, coal bunkers and other power plants, low/high pressure piping systems, circulating water piping systems, traveling water screens, coarse screens, trash racks, stoplog gates, various types and sizes of storage tanks and galvanized switchyard structures. (2) to design, erect, fabricate, commission, sell, supply, mechanical, equipments such as turbo generators, heat exchangers, deaerators, boiler feed pumps, fuel oil handling systems and devices and to design, supply erect, test and commission project on turnkey basis. (3) to trade, deal, supply sell all type of mechanical and electrical items instruments, (4) to design, engineer, fabricate, supply, erect, test and commission of fire protection system, on line tube cleaning system, debris filter material handling and conveyor system.
4. It is further submitted that both transferor company and the transferee company are under the same management and no public interest is adversely affected. It is further submitted that the main incidental as well as ancillary / objects of the transferee company are mentioned in paragraph 5 of the Company Petition No.219/2009. It is submitted on behalf of both the petitioners that they have proposed the Scheme of arrangement between the transferee company and the transferor company and their respective members. It is further submitted that Amalgamation of both the companies is for the benefit of the equity shareholders and creditors of both the companies and considering the synergy benefits, both the companies proposed for Amalgamation. It has been submitted that the Amalgamation would also reduce the cost of expenditure and monitoring of business under one banner. It is submitted that there will be profit and wealth maximization upon Amalgamation. It is submitted that cutthroat competition in the market including the domestic and international, the management has thought it fit for merger of the transferor company with the transferee company.
5. It is submitted on behalf of the transferor company that in light of the order made by this Court on 29.10.2009 in Company Application No.399/2009, meetings of the equity shareholders and unsecured creditors of the transferor company were dispensed with.
It is further submitted that in light of the order made by this Court on 29.10.2009 in Company Application No.400/2009, the meetings of the equity shareholders, secured and unsecured creditors of the transferee company were also ordered to be dispensed with.
6. That admission of the present company petition were advertised in two daily newspapers namely Indian Express, English Daily and Loksatta (Gujarat Daily), both Vadodara editions and the affidavit with regard to the admission and notifying the date of final hearing published in the two newspapers is also filed. This Court has not received any objections to the present company petitions.
7. Notices of the company petitions were also send to the Regional Director, Western Region, Department of Company Affairs and a common affidavit has been filed by Shri Rakeshchandra, Regional Director, Western Region, Ministry of Corporate Affairs, Mumbai. It is reported that after receiving the report with the Registrar of Companies and also the reply from the Advocate for the petitioner companies and after considering the provisions of Companies Act, 1956, and considering the various aspects of the proposed Scheme, more particularly, as set out in para 5 of the affidavit of the Regional Director, the Regional Director has no objection to the proposed Scheme of Amalgamation. It is further submitted that two affidavits vide dated 26.11.2009 of Shri Jatinder Singh, Executive Director of transferor and transferee companies disclosed that the company and its Director have not contravened provisions of law and that there are no prosecution for violation with any of the laws against any of the Directors and/or the Company for violation of various laws, before any Court. Thus, as such there is no objection by the Regional Director to the proposed Scheme of Amalgamation.
The Official Liquidator attached to this Court has also submitted in its report on the basis of the report that the acts in the transactions of the company were conducted within the objects mentioned in memorandum of the company and that the affairs of the company have not been conducted in a manner prejudicial to the interest of justice or to the public interest. Thus, it appears that the Central Government as well as the Official Liquidator have no objection, if the proposed Scheme of Amalgamation is sanctioned by this Court.
8. Heard Shri Pawan Godiawala, learned advocate appearing for petitioners and Shri P.S. Champaneri, learned Additional Solicitor General of India appearing on behalf of the Regional Director, Central Government and the Official Liquidator attached with this Court. The Scheme has detailed the benefits, which it may bring to both the companies under the same management on account of Amalgamation of both the companies including the minimization of administrative, marketing and operative costs etc.. Thus, it is submitted that the Amalgamation would be to the mutual advantage of both the transferor and transferee companies, all the shareholders as well as creditors of both the companies for approving the Scheme of Amalgamation and there is no objection of the shareholders and secured creditors to the Scheme of Amalgamation. Despite advertisement of public notice of these petitions in two daily newspapers having wide circulation in the State, nobody has objected to the Amalgamation of transferor company with the transferee company. The Scheme of Amalgamation does not appear to be contrary to law and/or public interest. As stated above, the Central Government has submitted that they have no objection as well as Official Liquidator attached to this Court has also submitted its report and no any objections has been raised by the Official Liquidator. Hence, there does not appear to be any impediment to granting of Scheme to the Scheme of Amalgamation as proposed.
9. For the reasons stated above, both company petitions i.e. Company Petition Nos.219/2009 and 220/2009 are allowed. Prayers in terms of paragraphs 11(a) of both the Company Petitions are hereby granted. In light of the provisions of Section 394(b)(vi) of the Act, transferor company is hereby directed to dissolve without winding up on the transferor company filing certified copy of the order of this Court with the Registrar of Companies.
10. Petitions stand disposed of accordingly. The cost to be paid by the petitioner companies to the Assistant Solicitor General of India are quantified at Rs.5000/- per petition and the cost to be paid to the Official Liquidator at Rs.4000/- by GMW Projects Pvt. Ltd., the transferee company.
(M.R. Shah, J.) *menon Top