Morarjee Textiles Limited (“the Demerged v. Companies

Mr. Rajesh Shah i/b Rajesh Shah & Co. Advocates for all the Petitioner Companies. Ms. Nisha Valani i/b Dr. T. C. Kaushik for Regional Director. Mrs. R. N. Sutar, Asst. Official Liquidator present in Company Scheme Petition No 269 of 2012. Ms. Krupali Rajani, Advocate for unsecured creditor M/s. Max Trade Ltd. CORAM: S. J. Kathawalla, J. DATE: 29th June, 2012 P.C.:

1. Heard learned counsel for the parties.

2. The sanction of the Court is sought to a Composite Scheme of Arrangement and Amalgamation between Morarjee Textiles Limited and Five Star Mercantile Limited and Morarjee Holdings Private Limited and their respective shareholders under Sections 391 to 394 read with Sections 100 to 103 of the Companies Act,

3. Counsel appearing on behalf of the Petitioner Companies has stated that the Petitioner Companies have complied with all requirements as per directions of this Court and they have filed necessary Affidavits of compliance in the Court. The Petitioner Companies also undertake to comply with all statutory requirements, if any, as required under the Companies Act, 1956 and the Rules made thereunder. The said undertakings are accepted.

4. The Official Liquidator has filed his report in Company Scheme Petition No.269 of 2012 stating therein that the affairs of the Transferor Company have been conducted in a proper manner 3 and that the Transferor Company may be ordered to be dissolved.

5. The Regional Director has filed an Affidavit stating therein that save and except for the directions to be complied with as stated in paragraphs 6(a) to 6(d), of the said Affidavit, it appears that the scheme is not prejudicial to the interest of shareholders and public. In Paragraph 6 of the said Affidavit it is stated that: (a) Clause No. 16.1 read with clause 17.2 of the scheme indicates that Transferor Company (MHPL) would become subsidiary of Resulting Company (FSML) on giving effect to Demerger. In this connection, it is respectfully submitted that on Demerger, first the investment held by Demerged Company in the capital of Transferor Company be transferred to Resulting Company and only thereafter the merger of Transferor Company can be given effect to. (b) As per clause 10 of the scheme the name of the Transferee Company (FSML) is proposed to be changed to “Integra Garments and Textiles Limited”. In this connection Transferee Company may be directed to comply with the provisions of section 21/23 of the Companies Act 1956 in respect of filing of necessary forms with the Registrar of Companies and the proposed new name will be allowed subject to availability of the same, by the Registrar of Companies since under the computerized MCA 21 System of allotting the names, it is systemically not possible to reserve the names. Therefore, the name if available at the time of filing of such application, shall be made available by the Registrar of Companies, Mumbai. (c)Clause 24.1 of the Scheme deals with change in Other Objects of the Memorandum of Association of the Demerged Company (MTL) and also Clause 24.2 of the Scheme deals with change in Main Objects of the Memorandum of Association of the Resulting/Transferee Company (FSML). In this connection, Demerged Company (MTL) and Resulting/Transferee Company (FSML). may be directed to comply with provisions of 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. (d)Clause 5.6 of the scheme, states that Resulting/Transferee Company (FSML) shall, if necessary and to the extent required, increase the authorised share capital to facilitate issue of shares under this scheme. Accordingly clause 24.3 of the scheme 4 provides for increase of authorised share capital of Resulting/Transferee Company (FSML) to the extent of Rs 12,05,00,000/-. In this connection the Resulting/Transferee Company (FSML)may be directed to comply with provisions of section 94/97 read with Schedule X of the Companies Act 1956, in respect of filing of necessary forms with the Registrar of Companies after payment of necessary filing fee and stamp duty as applicable on the said forms.

6. As far as the objection in paragraph 6 (a) of the affidavit of the Regional Director is concerned, the Petitioners through their counsel undertakes that the investment held by Demerged Company in the capital of Transferor Company will be transferred to Resulting Company and only thereafter the merger of Transferor Company will be given effect to. The said undertaking is accepted.

7. So far as the objection in paragraph 6 (b) of the affidavit of the Regional Director is concerned, the Resulting/Transferee Company undertakes to comply with the provisions of Section 21/23 of the Companies Act 1956 in respect of filing necessary forms with the Registrar of Companies. Further, the counsel appearing on behalf of the Resulting/Transferee Company (FSML) undertakes that the new name will be approved subject to availability of the same on the MCA-21 system at the time of filing such application. The said undertaking is accepted. -

8. As far as the objection in paragraph 6 (c) of the affidavit of the Regional Director is concerned, the Demerged Company (MTL) and Resulting/Transferee Company (FSML) undertakes to comply with provisions of Section 40 read with Section 18 of the Companies Act 1956, and to file the amended copy of Memorandum of Association alongwith Form No.21 with the Registrar of Companies. The said undertaking is accepted.

9. So far as the objection in paragraph 6 (d) of the affidavit of the Regional Director is concerned, the Resulting/Transferee 5 Company (FSML) undertakes to comply with provisions of section 94/97 read with Schedule X of the Companies Act 1956, in respect of filing of necessary forms with the Registrar of Companies after payment of necessary filing fee and stamp duty as applicable on the said forms. The said undertaking is accepted.

10. The counsel appearing for Max Trade Limited i.e. unsecured creditor of Morarjee Textiles Limited states that an amount of USD 95706.55/- equivalent to Rs. 54 Lacs is due and payable by Morarjee Textiles Ltd. to her client. In view thereof, Morarjee Textiles Limited through its counsel undertakes to make the above payment to Max Trade Limited on or before 10th July, 2012 as per the USD rate prevailing on the date of payment. The said undertaking is accepted.

11. From the material 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. Since all the requisite statutory compliances have been fulfilled, all aforesaid Company Scheme Petitions are made absolute in terms of prayer Clauses (a) to (d) of the respective petitions.

13. The Petitioner Companies to lodge a copy of this order and the Scheme duly authenticated by the Company Registrar, High Court (O.S.), 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 order.

14. The Petitioner Companies are directed to file copy of this order alongwith a copy of the Composite Scheme of Arrangement and 6 Amalgamation with the concerned Registrar of Companies, electronically, along with E-Form 21 and also file physical copy thereof both within 30 days from the date of issuance of the order.

15. The Petitioner Companies in the above Company Scheme Petitions to pay costs of Rs.10,000/- each respectively, to the Regional Director and the Petitioner in Company Scheme Petition No. 269 of 2012 to pay cost of Rs. 10,000/- to the Official Liquidator, High Court Bombay. Costs to be paid within four weeks from the date of the Order.

16. Filing and issuance of the drawn up order is dispensed with.

17. All authorities concerned to act on a copy of this order along with Scheme attached thereof, duly authenticated by the Company Registrar, High Court (O.S.), Bombay. (S. J. KATHAWALLA, J.)