SCAN STEELS LIMITED v. CLARUS INFRASTRUCTURE REALTIES LIMITED

Mr. Kartik Desai i/b Kartikeya & Associates, Advocate for the Petitioners in both Petitions. Mr. C.J. Joy with Mr. D. P. Singh i/b Dr. T. C. Kaushik for Regional Director in both Petitions. CORAM: S. J. Kathawalla, J. DATE : 11th May, 2012 PC:

1. Heard counsel for the parties.

2. The sanction of the Court is sought to a Scheme of Amalgamation of SCAN STEELS LIMITED, the Transferor Company, with CLARUS INFRASTRUCTURE REALTIES LIMITED, the Transferee Company, under Sections 391 to 394 of the Companies Act, 1956. 2

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

4. The Regional Director has filed an Affidavit stating therein that it appears that save and except as stated in paragraphs 6 (a), (b), (c), (d) & (e) of the said Affidavit, it appears that the Scheme is not prejudicial to the interest of shareholders and public. In paragraph 6 (a), (b), (c), (d) & (e) of the said Affidavit, it is stated that:- “(a) The Registered Office of the Transferor Company is situated in the State of Orissa. Hence the present scheme of amalgamation between the Transferor and Transferee Company will be subject to condition of similar approval from Hon’ble High Court of Orissa in respect of Transferor Company. (b) As per clause 21(b) of the scheme the name of the Transferee Company is proposed to be changed to “Scan Steels 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 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. 3 (c ) Clause 21 (c ) of the Scheme deals with change in the main Objects of the Memorandum of Association of the Transferee Company. In this connection, the Transferee Company 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 From No. 21 with the Registrar of Companies. (d) In Clause 26 of the scheme the period fixed for sanctioning the scheme by the Hon’ble High Court is 31/03/2011, which has already expired. in this connection Board of Directors of the Transferor and Transferee Company may be directed to take necessary steps to extend the date by passing Board Resolution before giving effect to the scheme (e) In clause 17(e) of the Scheme, it is stated that the difference between Net Assets Value of the Transferor Company and equity share capital issued to the shareholders of the Transferor Company on Amalgamation by the Transferee Company shall be credited /debited by the Transferee Company to its General Reserve/Goodwill Account as the case may be. In this connection it is submitted that the reserve arising out of the scheme shall be styled as “Capital Reserve” instead of General Reserve and shall not constitute as free Reserve as per section 2(29A) of the Companies Act, 1956 and hence shall not be utilized for the purpose of declaring dividend by the Transferee Company in future.”

5. The counsel appearing on behalf of the of Petitioner Company have tendered affidavit in reply to the aforesaid objection raised by the Regional Director. So far as the objection in paragraph 6 (a) of the Affidavit of Regional Director is concerned, the Petitioner Company in its affidavit in reply states that the Present Scheme amalgamation will be approved by the this Court subject to condition of similar approval from the Hon’ble High Court of Orissa in respect of Transferor Company. Further the counsel for the Petitioner states that the registered office of SCAN STEELS LIMITED, the Transferor 4 Company, is situated in State of Orissa and that the Transferor Company has filed similar petition before the High Court of Orissa and that the said Petition is pending for hearing before the said Court.

6. So far as the objection in paragraph 6 (b) of the Affidavit of Regional Director is concerned, the Petitioner Company in its affidavit in reply states that the Petitioner Company undertake 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 at the time of filing of such application, by the Registrar of Companies.

7. So far as the objection in paragraph 6 (c) of the Affidavit of Regional Director is concerned, the Petitioner Company in its affidavit in reply states that the Petitioner Company undertake to comply with the provisions of section 40 read with section 18 of the Companies Act, 1956 and to file amended copy of Memorandum of Association along with Form No. 21 with The Registrar of Companies.

8. So far as the objection in paragraph 6 (d) of the Affidavit of Regional Director is concerned, the Petitioner Company in its affidavit in reply states that Transferor Company as well as the Transferee Company vide its Board Resolution dated 26th March,2011 and 26th 5 March,2012 in respect of the Transferor Company and Board Resolution dated 12th February,2011 in respect of the Transferee Company have extended the period mentioned in Clause 26 for sanctioning the scheme from 31st March, 2011 to 30th June, 2012.

9. So far as the objection in paragraph 6 (e) of the Affidavit of Regional Director is concerned, the Petitioner Company in its affidavit in reply states that the Petitioner Company agrees that the reserves arising out of the scheme shall be styled as “Capital reserve” instead of General Reserve and shall not constitute as Free Reserve as per section 2(29A) of The Companies Act, 1956 and shall not be utilized for the purpose of declaring dividend by the Transferee Company in future.

10. 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 has come forward to oppose the Scheme.

11. Since all the requisite statutory compliances have been fulfilled, the Company Scheme Petition No. 731 of 2011 filed by the Transferee Company is made absolute in terms of prayer clauses (a) to (i).The 6 scheme is sanctioned subject to similar approval to the present Scheme from the High Court of Orissa in respect of Transferor Company.

12. 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 the order.

13. Petitioner is directed to file a copy of this order alongwith a copy of the Scheme of Amalgamation with the concerned Registrar of Companies, electronically, along with E-Form 21 in addition to physical copy within 30 days from the date of issuance of the order by the Registry.

14. The Petitioner Company to pay costs of Rs.10,000/- to the Regional Director, Western Region, Mumbai. Costs to be paid within four weeks from today.

15. Filing and issuance of the drawn up order is dispensed with. 7

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