Synopsys (India) Private Limited 5th Floor, Tower A Rmz Infinity No. 3, Old Madras Road, Benniganahalli Bangalore 560 016 vs NIL

Aravind Kumar

This petition is filed by the Transferee Company for sanction of Scheme of Amalgamation produced at Annexure-A whereundar Coware India Private Limited (Transferor Company No. 1) and Ingot Systems Private Limited (Transferor Company No. 2) are proposed to be merged with the Petitioner Company (Transferee Company). Petitioner Company was incorporated on 29.4.1995 with the Registrar of Companies, Karnataka, Bangalore. The main object of petitioner company is to carry on business of developing software computer applications, providing total computer solutions such as consultancy system study, processing, hiring etc., amongst others. The registered office of the petitioner company is situated at 5th Floor, Tower-A, RMZ Infinity, No. 3 Old Madras Road, Benniganahalli, Bangalore-560016. The authorised share capital of the Transferee Company is Rs. 3,00,00,000/- (Rupees Three Crores only/ divided into 30,00,000 (Thirty Lakhs) equity shares of Rs. 10/- each. The issued, subscribed and paid up share capital of the company is Rs. 1,27,90,020/- divided into 12,79,002 equity snares of Rs. 10/- each fully paid up.

The Transferor Company No. 1 was incorporated on 27.11.2003 under the name and style of "Coware India Private Limited" with the Registrar of Companies, National Capital Territory (NCT) of Delhi and Haryana and at present carrying on business of developing and designing computer software programmes as mentioned in the petition and as well as in the Scheme of Amalgamation, Annexure-A and its registered office is situated at 205, E-49, Jawahar Park, Laxmi Nagar, Delhi -110092.

The Transferor Company No 2 was incorporated on 18.8.2004 under the name and style of "Ingot Systems Private Limited" at present carrying on the business of hardware solution and its registered office is situated at 2nd Floor, Krishna Chambers, Pashan-sue Road, Pashan, Pune, Maharashtra-411-021. The authorised share capital of the Transferor Company No. 2 is Rs. 1,00,000/- divided into 10,000 equity shares of Rs. 10/- each and same is issued,'' subscribed and paid up. The main object of the said Transferor Company No. 2 is to undertake turn-key assignments and projects of consultancy, development, marketing, trading, hire, leasing and export of software packages etc, amongst others as more than fully specified in its Memorandum and Articles of Association which is appended to the petition as Annexure-F.

The Transferee Company has filed CA. No. 263/2011 for dispensing with conducting meetings of shareholders and creditors and this Court by order dated 29.3.2011 allowed the application and dispensed with the convening of meeting of the shareholders mad creditors and thereafter, the present petition has been filed on 21.3.3011. On issuance of notice to the Regional Director, the Regional Director has filed an affidavit through Registrar of Companies, who has stated in paragraph 3 of the affidavit dated 14.7.2011 that the same is not objected to.

The material on record discloses that Transferor Company No. 1 & 2 are to be merged with Transferee Company and Board of Directors of the Transferee Company by a resolution dated 15.12.2010 which is produced at Annexure-H to the petition, have also approved the scheme of amalgamation and it is stated therein that consequent to acquisition of the company, Virage Logic Inc, (registered in the United States) by the Transferee Company, the present Scheme of Amalgamation is propounded to have a global presence. It is also stated in the Scheme of Amalgamation that it would enable more specific end economic Business to the transferee company. The material on record discloses that Transferee Company has complied with provisions of Section 391 of Companies Act and shareholders have also approved the Scheme of Amalgamation and said consent letters were produced along with CA. 263/2011 where under dispensation for convening meeting of shareholders had been sought for and the said dispensation having been permitted, there is no impediment for approving the said Scheme of Amalgamation. It is also stated that by virtue of amalgamation, trade creditor'' interest is safeguarded by the Transferee Company. Hence, it is noticed that the interest of the shareholders and creditors have been duty safeguarded in the Scheme of Amalgamation and the Transferee Company having exercised its commercial prudence to amalgamate with the Transferor Company No. 1 and 2, the said commercial wisdom exercised by the Transferee Company cannot be examined or scrutinized by this Court until unless It affects the rights of shareholders, creditors or any other persons.

6 In view of material facts discussed hereinabove and the Auditors report furnished along with the present petition as per Annexure-C, would also disclose that Transferee Company has not conducted its business activities in any manner prejudicial to its members, shareholders and creditors and likewise Transferor Company No. 1 and 2 having also not conducted their business activities in any manner prejudicial to any of the parties referred to above, as per certificates issued by the Auditor at Annexure-E & G respectively, I am of the considered view that both the companies have complied with Section 159 sub Section (2) of the Companies Act. 1956.

On the query posed by the Court to learned counsel for petitioner with regard to pendency of similar petitions by Transferor Company No. 1 and Transferor Company No. 2 and their status, it has been stated that these two companies being constituted within the jurisdiction of Registrar of Companies and NCT respectively, and petitions have been presented before the jurisdictional High Courts and same is pending, said submission is placed on record. At this juncture, the Scheme of Amalgamation produced at Annexure-A is perused and clause-13 & 14 there under provides for filing of applications before the jurisdictional High Courts and it is also stated in the preamble of the Scheme of Amalgamation that "High Court" means and includes Hon''ble High Court of Karnataka at Bangalore, Hon''ble High Court of Delhi at New Delhi and Hon''ble High Court of Judicature of Bombay at Mumbai. In that view of the matter, this Scheme of Amalgamation presented by the Transferee Company is approved subject to the approval of similar scheme presented by the Transferor Company No. 1 and Transferor Company No. 2 before the jurisdictional High Courts.

Perusal of the Scheme of Amalgamation, Annexure-A would disclose that on scheme becoming effective, Transferee Company would issue and allot equity shares credited as fully paid up, namely 25 filly paid up shares of Rs. 10/- each of the Transferee Company for every 2 equity shares of Rs. 10/- each held by Transferor Company No. 1 without insisting for any application deed. Likewise, it is also agreed to under the Scheme of Amalgamation that Transferee Company in terms of the scheme would allot 2 fully-paid up equity shares of Rs. 10/ each of the Transferee Company for every 1 equity share of Rs. 10/- each held in the Transferor Company No. 2. It is also agreed to under the Scheme of Amalgamation that all the employees, staff, workmen of Transferor Company No. 1 and 2 in service from the effective date shall become the employees of the Transferee Company without break or interruption in their service and on the basis of their continued service and service conditions not less favourable substituting with Transferee Company would be applicable.

As noticed hereinabove, the material on record as also order sheet of this company petition discloses no employee has appeared either on the date of notifying the notice published in the newspaper i.e., on 3.6.2011 or on any subsequent dates to oppose the Scheme of Amalgamation. As such it is held that there is no opposition to the Scheme of Amalgamation by the employee. As observed hereinabove, Scheme of Amalgamation having been approved by the Transferee Company, it would not be open for this Court to sit in appeal over the commercial wisdom exercised by the petitioner company.

In view of the discussion made hereinabove and also considering the fact that Scheme of Amalgamation approved by those persons interested in the affairs of the company, I am of the considered view that petitioner company has made out a case for sanction of the Scheme of Amalgamation as per Annexure-A. Hence, I pass the following order:-

a) Scheme of Amalgamation as per Annexure-A produced by the petitioner is hereby approved and held that same would be binding on the petitioner company''s shareholders, creditors subject to company petition said to have presented by Transferor Company No. 1 and Transferor Company No. 2 which is pending before the Hon''ble High Court of Delhi, New Delhi and Hon''ble High Court of Judicature of Bombay, Mumbai

b) Transferor Company No. 1 and Transferor Company No. 2 shall stand dissolved subject to above.

c) Transferee Company shall serve copy of this osier on the Registrar of Companies within 30 days from the date of receipt of copy of this order.