Allowed

M/S. Sreepathi Pharmaceuticals Limited v. -

Telangana HC8 Mar 2011CP/238/2010

Case brief

AI extract

What is this about?

The court sanctioned the scheme of amalgamation of M/s. White Star Alums Private Limited with M/s. Sreepathi Pharmaceuticals Limited under Sections 391 and 394 of the Companies Act, 1956, finding it beneficial to shareholders and creditors with no objections raised.

What did the court decide?

Sanction of the scheme of amalgamation of M/s. White Star Alums Private Limited with M/s. Sreepathi Pharmaceuticals Limited.

M/S. Sreepathi Pharmaceuticals Limited Vs - — Specific Performance | Telangana HC (2011)

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THE HON'BLE Ms. JUSTICE G.ROHINI

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COMPANY PETITION Nos. 237 AND 238 OF 2010

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Dated:08.03.2011

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COMPANY PETITION No. 237 OF 2010

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Between:

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M/s. White Star Alums Private Limited

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..... Petitioner Company

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COMPANY PETITION No. 238 OF 2010

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Between:

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M/s. Sreepathi Pharmaceuticals Limited

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…… Petitioner Company

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The Court made the following :

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THE HON'BLE Ms. JUSTICE G.ROHINI

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COMPANY PETITION Nos. 237 AND 238 OF 2010

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COMMON ORDER :

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These two petitions are filed under Sections 391 and 394 of the Companies Act, 1956 (for short, ‘the Act’) with a prayer to sanction the scheme of amalgamation of M/s. White Star Alums Private Limited with M/s. Sreepathi Pharmaceuticals Limited. The petitioner in Company Petition No.237 of 2010- M/s. White Star Alums Private Limited is the Transferor Company whereas the petitioner in Company Petition No.238 of 2010- M/s. Sreepathi Pharmaceuticals Limited is the Transferee Company.

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The Transferor Company was incorporated as a Private Limited Company in the State of Andhra Pradesh on 31.08.1995 under certificate of incorporation No.01-21575 of 1995-96. The registered office of the Transferor Company is situated at Plot No.74/A, Second Floor, Central Bank Building, Kalyan Nagar, Hyderabad. The present authorised share capital of the Transferor Company is Rs.20,00,000/divided into 2,00,000 equity shares of Rs.10/- each and the issued, subscribed and paid-up capital of the Transferor Company is Rs.10,80,000 divided into 1,08,000 shares of Rs.10/- each. Apart from the above there is a share application money pending allotment to an extent of Rs.3,41,63,890. The objects for which the Transferor Company was incorporated as set out in its memorandum of association have been enumerated in Para No.5 of Company Petition No.237 of 2010.

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The Transferee Company was originally incorporated under the

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name and style of M/s. Sreepathi Pharmaceuticals Private Limited in the State of Andhra Pradesh on 29.12.1983 under the certificate of incorporation No.4356 of 1983-84. Later on the company became a public limited company in terms of Section 31(1)/44 of the Act and had obtained a fresh certificate of incorporation consequent on its conversion from the Registrar of Companies, Andhra Pradesh on 13.05.1992 after complying with the necessary formalities under the Act. The registered office of the Transferee Company is situated at Plot No.22B, Road No.2, Jubilee Hills, Hyderabad- 500 033. The authorised share capital of the Transferee Company as on 31.03.2010 was Rs.4,00,00,000/- divided into 4,00,000 equity shares of Rs.100/each. The issued, subscribed and paid-up capital of the Transferee Company as on 31.03.2010 was Rs.3,69,63,900/- divided into 3,69,639 equity shares of Rs.100/- each. The objects for which the Transferee Company was incorporated as set out in its memorandum of association have been enumerated in Para No.5 of Company Petition No.238 of 2010.

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The audited balance sheets of both the transferor company and transferee company as on 31.03.2010 have been filed along with the company petitions. It is stated that the transferee company is engaged in the business of manufacturing of bulk drugs whereas the transferor company is engaged in the manufacture of chemical products and is a subsidiary of transferor company. In order to take advantage of infrastructural facilities of the transferor company, the transferee company after amalgamation would be in a position to diversify into various products at different locations in view of its existing infrastructure and capacity being utilized at optimum level. Further the proposed amalgamation would also benefit both the companies by rationalizing the activities of their respective products which will lead to economies of scale and also there would be reduction in over heads and other expenses and thus saving substantial amount. Further the proposed amalgamation would also enable the transferee company to

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position itself to withstand market fluctuations with diversified products and would also command large resources by virtue of larger capital base and reserves and would result in more sales with much better profitability. Therefore, it would be advantageous and beneficial to all the shareholders, creditors, employees and all persons concerned.

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In view of the advantages of amalgamation, the Board of Directors of the transferor company and transferee company at their meeting held on 03.11.2010 approved the Scheme of Amalgamation of the transferor company with the transferee company with effect from 01.10.2010 subject to the approval/consent of the shareholders and confirmation by this Court.

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While placing a copy of the proposed Scheme of Amalgamation, these two applications have been filed for sanction of the said scheme.

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I have heard the learned counsel for the petitioners. The material available on record shows that by orders dated 01.12.2010 made in C.A.No.1471 of 2010 and 1472 of 2010, this Court had dispensed with the convening of the meeting of the shareholders of the transferor and transferee companies as all the shareholders had given their no objection by means of affidavits.

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It is pleaded by the transferor company that it had not availed any secured loans and the unsecured loans availed by way of sales tax deferment will be transferred to the transferee company on the Scheme of Amalgamation. So far as the transferee company is concerned, it is stated that it had availed secured loans from Canara Bank towards term loan and cash credit and from HDFC Bank towards vehicle loan. The transferee company has also availed unsecured loans from its transferor company and the proposed amalgamation will not affect their interest. Both the transferor company and transferee company are unlisted companies.

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By order dated 24.12.2010 this Court directed notice to the Regional Director, Ministry of Corporate Affairs, Chennai and the

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Official Liquidator, High Court of Andhra Pradesh.

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Pursuant thereto, the Official Liquidator filed a report vide O.L.R.No.37 of 2011 dated 18.02.2011 stating that the affairs of the Transferor Company appear to have not been conducted in a manner prejudicial to the interest of the members or to public interest.

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A common affidavit has been filed by the Registrar of Companies raising the following objection:

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“The transferee company should pay the Stamp Duty wherever applicable as per the Regulations of Andhra Pradesh Stamp Act.”

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The above said objection is not tenable since the transferor company is a subsidiary of the transferee company.

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As rightly submitted by the learned counsel for the petitioners no stamp duty is payable under Section 20(d) of Schedule I-A of Indian Stamp Act, 1989.

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Having regard to the facts and circumstances noticed above and taking into consideration the fact that the scheme of amalgamation is not opposed to any provision of law or public interest, and despite notice of the admission of the company petition by paper publication, no objection whatsoever have been received from any quarter, I am of the opinion that it is a fit case for granting sanction of the scheme of amalgamation as sought by the petitioners.

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Accordingly, both the Company Petitions are allowed and the scheme of amalgamation is approved. A copy of this order shall be filed before the Registrar of Companies within 30 days from the date of receipt of this order. No costs.

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__________ G. ROHINI, J

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Date: 08.03.2011 Ivd

M/S. Sreepathi Pharmaceuticals Limited v. -

Case brief

What is this about?

What did the court decide?

M/S. Sreepathi Pharmaceuticals Limited v. -

Case brief

What is this about?

What did the court decide?

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