ORDER :

N.B. Anjaria, J.

The captioned are the petitions filed by two companies. Asahi Songwon Colors Limited is the petitioner of Company Petition No. 177 of 2014, whereas AksharChem (India) Limited being the petitioner in second company petition. The petitioners have prayed for obtaining sanction of this court to a Scheme of arrangement in the nature of De-merger and Transfer of the demerged Undertaking CPC Green Division of Asahi Songwon Colors Limited-the De-merged Company, to AksharChem (India) Limited-the Resulting Company, and consequential restructure of the share capital of the demerged company, proposed under sections 391 and 394 read with Sections 78 and 100 to 103 of the Companies Act, 1956.

2. Heard learned advocate Ms. Swati Soparkar for the petitioner companies, and Learned Assistant Solicitor General Mr. Dewang Vyas who appears for the Central Government upon notice of the present petition being served on the Regional Director.

3. Giving out the basic details of the petitioner companies, learned advocate for the Companies stated to submit that Aashi Songwon Colors Limited (ASCL)- the demerged company is a public limited company and the shares are listed at the Bombay Stock Exchange (BSE) Limited and National Stock Exchange of India Limited. It is engaged in the business of manufacturing pigments-colours used in printing inks, paints, plastics, textiles, rubber, etc. It is in the manufacturing of the Pigment Green-7, beta Blue as well as CPC Blue Crude. The de-merged company is a profit making and dividend paying company.

3.1. On the other hand, stated learned advocate for the petitioner, AksharChem (India) Limited (ACIL)-the Resulting Company is also a public limited company and the shares are listed at BSE Limited and Ahmedabad Stock Exchange. It is primarily engaged in the business of manufacturing of dyes and intermediaries, it claims to be one of the leading manufacturer and exporter of Vinyl Sulphone. It further claims to be a profit making and dividend paying company. It was pointed out that both the companies belong to the same group of management. The Demerged Company-ASCL, has two manufacturing divisions. The CPC Green Division is located at Kadi, Mehsana; the other Pigment Blue division is located at Padra, Vadodara, both in the State of Gujarat.

3.2. It was submitted that it was realised by the management of the company that its two operating divisions are quite different involving distinct business dynamics. Both of them have distinct market segments and customers. The strategies for the development and growth of these business require different focus. With a view to achieving operational efficiencies, site synergies and streamlining its current structure, ASCL has decided to demerge its CPC Green Division into ACIL with primary intention to focus its business synergies on Pigment Blue division. The petitions narrate the commercial advantages expected to flow by virtue of the proposed demerger.

3.3. It was submitted and explained that moreover, as a consequence of the above demerger, the demerged company vide Clause 17 of the scheme, proposes to restructure its Share Capital in order to make is Balance Sheet realistic upon the demerger and transfer of the CPC Green Division. The company has proposed the restructure in form of utilisation of its Securities Premium Account, for adjusting the value of the net assets of the Demerged undertaking in its books of accounts. Though, there is no actual reduction in Issued and Paid up Equity Share Capital of the company, the said proposal shall be covered under the provisions of Section 78 read with Section 100 to 103 of the Companies Act, 1956. However, this is consequential in nature and is proposed as an integral part of the proposed Scheme.

3.4 Both the petitioner companies had passed the necessary Board Resolutions and had approached the concerned Stock Exchanges and Securities Exchange Board of India (SEBI) for the approval of the scheme before filing the same b