CIVIL APPEAL 139 of 2008 on 29 October 1981

1. M/s Mohta Bearings Ltd. Having its registered office at , C/oKamra Oil Mills, Lakkar Mandi, Abohar-152 116.

...............Petitioner/Transferor Company

2. M/s Trishiv Investments Pvt. Ltd., 14-B, Atma Ram House, 1,Tolstoy Marg, New Delhi.

............... Transferee Company

CORAM:HON'BLE MR. JUSTICE K. KANNAN

1. Whether Reporters of local papers may be allowed to see thejudgment ? 2. To be referred to the Reporters or not ?

3. Whether the judgment should be reported in the Digest ?

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Present:Mr. A.C. Jain, Advocate.

Mr. D.P. Ojha, Official Liquidator.

K. KANNAJ J.

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1. This petition has been filed under Sections 391 to 394 seeking forconfirmation of the Scheme of Arrangement of M/s Mohta Bearings Limited(Transferor Company) with M/s Trishiv Investments Pvt. Ltd. (TransfereeCompany).

2. The Transferor Company had been incorporated as a PrivateLimited Company on 29.10.1981 with the Jullandar Registrar of Companies,Punjab, H.P. & Chandigarh at Jullandar. The authorized capital of 2,50,000equity shares of Rs.10 each was Rs.25,00,000/-, the issued subscribed andpaid up capital consisting of 2,45,000 equity shares was Rs.24,50,000/-.The main object of the Transferor Company was to carry on business ofmanufacturing, production, fabrication, assembling, selling and dealing in bearings and bushes of all kinds and other related products.

3. The Transferee-Company had also been incorporated as a PrivateLimited Company on 13.09.1985 with the Registrar of Companies of NCTof Delhi and Haryana at New Delhi against the authorised capital of Rs.20lacs secured through 2,00,000 equity shares of Rs.10 each, the issued,subscribed and paid up capital through 1,73,100 equity shares wasRs.17,31,000/-. The object of the Transferee Company detailed inMemorandum and Articles of Association, inter alia, was: (i) to acquire andhold shares, stocks, debentures, debenture stocks, bonds, obligations andsecurities issued or guaranteed by any company constituted or carrying onbusiness in India or elsewhere; (ii) to make loans or guarantees and providesecurities to other companies; (iii) to carry on business of farming,horticulture, floriculture etc. The company was essentially in the business ofmoney-lending and earning interest income and also deriving income fromreal estate business.

4. The entire share capital of the Transferor Company and theTransferee Company were held by Mohta Family and Company in whichthey had substantial stake, there was no outside public interest in theshareholdings in both the amalgamating Companies. The TransferorCompany had Anshuman Mohta, M.C. Agarwal, Vinod Shah and RichaAnirudh Agarwal as Directors of Transferor Company with nil shareholdingexcept M.C. Agarwal who holds one equity share of Rs.10, whereasRajyashree Bhartia, Anshuman Mohta, Ramesh Tapuriah, Raj Ratan Pugaliaand Sanjay Kumar Kabra as Directors of the Transferee Company with nilshareholding except Anshuman Mohta who holds 5500 equity shares ofRs.10/- each. The Directors have consented for amalgamating ofCompanies to have a common Board and a diversified product range.

5. M/s Rattan Gupta & Co., Chartered Accountants having their

C.P. No.139 of 2008 (O&M) & C.P. No.20 of 2008

office at Delhi, who are the statutory auditors of the Transferor Companyand the Transferee Company, upon a reference by the management of theamalgamating Company have made a due diligence report and opined a fairexchange ratio between the shares of two companies in such a way that theTransferee Company shall issue at par and allot to the shareholders of theTransferor Company in proportion of one equity share of Rs.10/- each in theequity capital of the Transferee Company credited as fully paid up for every4.5 equity shares of Rs.10/- each fully paid in the equity share capital of theTransferor Company. The name of the amalgamated Company would beTrishiv Investments Pvt. Ltd. (TIPL). The respective resolutions of theTransferor Company and the Transferee Company by the respective Boardof Directors have been placed on record and the Scheme which was draftedwas considered and filed before the Hon'ble Court of Delhi under Sections391 to 394 for convening meeting of Shareholders and Directors for the saidpurpose.

6. By order dated 13.03.2008, this Court pleased to order theholding of the shareholders' meeting on 26.04.2008 under the Chairmanshipof Sh. Raghujit Singh Madaan, Advocate, failing him Sh. Amit Jhanji,Advocate. However, no meeting of the secured creditors was ordered as thepetitioner-Company has no secured or unsecured creditors. The meetingwas accordingly held and the copy of the report has also been filed andalready put on record of Company Petition No.20 of 2008. The report of theChairman had been taken on record and an order was passed on 18.07.2008by this Court directing the Companies to file second motion petition andseek for confirmation of the Scheme of Arrangement. The Hon'ble DelhiHigh Court has already passed an order dated 27.05.2008 dispensing withthe meeting of share holders and secured creditors of the transfereecompany. The notice of the petition of second motion was served on Regional Directors, Ministry of Corporate Affairs, Nodia exercising thepower of the Central Government and advertisements had also been issuedin two newspapers as well as in the Official Gazette of Government ofPunjab. Notices had also been issued to the Official Liquidator attached tothe Company under Section 394 of the Companies Act, 1956.

7. On consideration of all the relevant facts and the proceduralrequirements under Sections 391 to 394 of the Companies Act and therelevant rules and on due consideration of the report of Regional Director,which has been filed on 10.12.2008, I am of the opinion that the Scheme ofAmalgamation as proposed deserves to be approved in the manner it wasfiled and approved in the meetings conducted as per the order of the Court.The Central Government has also reported that M/s S. Chadha Associates,Chartered Accountants have scrutinised the books of accounts and otherrelevant records and reported that the affairs of the Transferor Companyhave been conducted in such a way that it is not prejudicial to interest to itsmembers or to public interest. The Chartered Accountants have stated thatundertakings of compliance of AS 14 of the Institute of CharteredAccountants of India should be taken and in compliance of such directionsCompany has also given such an undertaking.8.The petition is accordingly ordered as prayed for approving theScheme of Amalgamation subject to the sanctioning of Scheme by DelhiHigh Court. A certified copy of this order shall be filed with the Registrarof Companies within 14 days of the order in Form No.41. The Scheme shallbe binding upon all concerned including the shareholders of thepetitioner/Transferor Company and the Transferee Company.

(K. KANNAN) JUDGE