JUDGMENT : SUDERSHAN KUMAR MISRA, J. 1. This joint petition has been filed under Sections 391(2) & 394 of the Companies Act, 1956 by the petitioner companies seeking sanction of the Scheme of Amalgamation of Priapus Real Estate Private Limited (hereinafter referred to as the transferor company no. 1) and Priapus Properties Private Limited (hereinafter referred to as the transferor company no. 2) with Priapus Developers Private Limited (hereinafter referred to as the transferee company). 2. The registered offices of the transferor and transferee companies are situated at New Delhi, within the jurisdiction of this Court. 3. The transferor company no. 1 was incorporated under the Companies Act, 1956 on 22nd December, 2009 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi. 4. The transferor company no. 2 was incorporated under the Companies Act, 1956 on 11th December, 2009 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi. 5. The transferee company was incorporated under the Companies Act, 1956 on 22nd December, 2009 with the Registrar of Companies, NCT of Delhi & Haryana at New Delhi. 6. The present authorized share capital of the transferor company no.1 is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each. The issued, subscribed and paid up capital of the company is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each. 7. The present authorized share capital of the transferor company no.2 is Rs.1,70,00,000/- divided into 17,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid up capital of the company is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each. 8. The present authorized share capital of the transferee company is Rs.7,00,000/- divided into 70,000 equity shares of Rs.10/- each. The issued, subscribed and paid up capital of the company is Rs.1,00,000/- divided into 10,000 equity shares of Rs.10/- each. 9. Copies of the Memorandum and Articles of Association of the transferor and transferee companies have been filed on record along with CA(M) 2/2015 earlier filed by the petitioners. The audited balance sheets, as on 31st March, 2014, of the transferor and transferee companies, along with the report of the auditors, as well as the provisional financial statements of the petitioner companies, as on 15th December, 2014, had also been filed. 10. The audited balance sheets, as on 31st March, 2014, of the transferor and transferee companies, along with the report of the auditors, as well as the provisional financial statements of the petitioner companies, as on 15th December, 2014, had also been filed. 10. A copy of the Scheme of Amalgamation has been placed on record and the salient features of the Scheme have been incorporated and detailed in the petition and the accompanying affidavits. It is submitted by the petitioners that the Scheme is designed to consolidate the businesses of the petitioner companies with an overall objective of ensuring focused management in a single combined entity and for administrative and compliance convenience to obtain better control and running of the businesses. It is claimed that the scheme shall enable the transferee company to consolidate the business activities of the group thereby attaining economies of scale and the combined net-worth in a single entity shall also facilitate in attracting funds from strategic investors. 11. So far as the share exchange ratio is concerned, the Scheme provides that since transferor companies no. 1 and 2 are wholly owned subsidiaries of the transferee company and their entire issued, subscribed and paid-up share capital is held by the transferee company, therefore, upon the scheme becoming effective, the entire share capital of the transferor companies no. 1 and 2 shall stand cancelled and there would be no issue of shares of the transferee company to the shareholders of transferor companies no. 1 and 2 pursuant to amalgamation of transferor companies with the transferee company. 12. It has been submitted by the petitioners that no investigation proceedings under Sections 235 to 251 of the Companies Act, 1956 are pending against the petitioner companies. 13. The Board of Directors of the transferor and transferee companies in their separate meetings held on 15th December, 2014 have unanimously approved the proposed Scheme of Amalgamation. Copies of the Resolutions passed at the meetings of the Board of Directors of the transferor and transferee companies have been placed on record. 14. The petitioner companies had earlier filed CA (M) No. 2/2015 seeking directions of this court to dispense with the requirement of convening the meetings of their equity shareholders, secured and unsecured creditors, which are statutorily required for sanction of the Scheme of Amalgamation. 14. The petitioner companies had earlier filed CA (M) No. 2/2015 seeking directions of this court to dispense with the requirement of convening the meetings of their equity shareholders, secured and unsecured creditors, which are statutorily required for sanction of the Scheme of Amalgamation. Vide order dated 20th January, 2015, this court allowed the application and dispensed with the requirement of convening and holding the meetings of the equity shareholders and unsecured creditors of the transferor and transferee companies, there being no secured creditors of the petitioner companies, to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Amalgamation. 15. The petitioner companies have thereafter filed the present petition seeking sanction of the Scheme of Amalgamation. Vide order dated 3rd February, 2015, notice in the petition was directed to be issued to the Regional Director, Northern Region, and the Official Liquidator. Citations were also directed to be published in ‘Financial Express’ (English) and Jansatta (Hindi) Delhi editions. Affidavit of service has been filed by the petitioners showing compliance regarding service one the Official Liquidator and the Regional Director, Northern Region and also regarding publication of citations in the aforesaid newspapers on 25th February, 2015. Copies of the newspaper clippings containing the publications have been filed along with the affidavit of service. 16. Pursuant to the notices issued, the Official Liquidator sought information from the petitioner companies. Based on the information received, the Official Liquidator has filed a report dated 14th July, 2015 wherein he has stated that he has not received any complaint against the proposed Scheme of Amalgamation from any person/party interested in the Scheme in any manner and that the affairs of the transferor companies do not appear to have been conducted in a manner prejudicial to the interest of their members, creditors or public interest, as per second proviso of Section 394(1) of the Companies Act, 1956. 17. In response to the notices issued in the petition, Mr. A.K. Chaturvedi, Regional Director, Northern Region, Ministry of Corporate Affairs has filed his report dated 21st July, 2015. Relying on Clause 6.11.1 of Part-II the Scheme, he has stated that, upon sanction of the Scheme of Amalgamation, all the employees of the transferor companies shall become the employees of the transferee company without any break or interruption in their services. A.K. Chaturvedi, Regional Director, Northern Region, Ministry of Corporate Affairs has filed his report dated 21st July, 2015. Relying on Clause 6.11.1 of Part-II the Scheme, he has stated that, upon sanction of the Scheme of Amalgamation, all the employees of the transferor companies shall become the employees of the transferee company without any break or interruption in their services. He has further submitted that in Clause 9.1 of Part-II of the Scheme, it has been stated that the transferee company shall account for amalgamation of the transferor companies in the books of accounts as per the “Purchase Method” specified under the Accounting Standard-14, Accounting for Amalgamation. He further submitted that in Clause 12 of Part-II of the Scheme, it has been stated that upon this scheme becoming effective, the transferor companies shall stand dissolved without the process of winding up. 18. The Regional Director in para 8 of his report has stated as under: (i) That in the financial year ended 31.03.2014, the transferor company no. 1 reported nil revenue from its operation except other income of Rs.5.59 crores including dividend income of Rs.5.52 crores which shows that the entire income of the company has been derived from investment of Rs.78.48 crores in India-bulls Housing Finance Limited whereas there is no mention whether the said company is registered with RBI as NBFC to do such activities; (ii) That on perusal of the balance sheets ending 31.03.2014 of transferor companies no. 1 & 2, it is indicating that the holding company was advancing borrowed money to its subsidiaries without interest and the same was used by the subsidiaries for the business purposes other than their main objects. Further, both the transferor companies earned considerable dividend income. 19. In response to the aforesaid objections, the petitioner companies in the affidavit dated 16th August, 2015 of Mr. Vaibhav Poonia, Director of the petitioner companies have submitted that the transferor company no.1 was formed and is engaged in the business of real estate which is in consonance with its main objects and that the petitioner companies, including transferor company no. 1, have acquired land located at Village Bilara, Jodhpur, Rajasthan during the financial year 2010 for the purposes of development of real estate project. 1, have acquired land located at Village Bilara, Jodhpur, Rajasthan during the financial year 2010 for the purposes of development of real estate project. It has been further submitted that the term ‘Financial Institution’ used in Section 45-I(c) of the Reserve Bank of India Act, 1934 specifically excludes any institution which carries on as its principal business as purchase, construction or sale of immovable property. No portion of the income of the companies is stated to be derived from financing of purchases, constructions or sales of immovable property. It is, therefore, submitted that all the petitioner companies are carrying on business of real estate and their activities fall outside the purview of NBFC. Further, the petitioner companies in the affidavit dated 13th January, 2016 of Mr. Vaibhav Poonia, Director of the petitioner companies have submitted that none of the transferor companies are registered with the Reserve Bank of India. He has, however, undertaken and confirmed that the petitioner companies will comply with all the compliances of the Reserve Bank of India and will take other necessary steps in this regard, if any, and that the petitioner companies and their directors will be bound for any action which may be taken by the RBI in future for any act of commission or omission by the petitioner companies with regard to NBFC regulations. In view of the aforesaid, the first objection raised by the Regional Director stands satisfied. 20. So far as the second objection of the Regional Director is concerned, it is submitted by the petitioners that all the petitioner companies, being private companies, are not permitted to accept public deposits and loans, as mandated under law, can only be raised from shareholders or directors. Accordingly, the transferee company has obtained loans from one of its erstwhile Directors, Sh. Rajiv Rattan, which are also interest free. Therefore, the transferee company, being a private company and there being no public money involved, advances interest free loans to wholly owned subsidiaries, which is not barred under any law. In view of the aforesaid, the second objection raised by the Regional Director also does not survive. 21. No objection has been received to the Scheme of Amalgamation from any other party. The petitioner companies, in the affidavit dated 21st July, 2015 of Mr. In view of the aforesaid, the second objection raised by the Regional Director also does not survive. 21. No objection has been received to the Scheme of Amalgamation from any other party. The petitioner companies, in the affidavit dated 21st July, 2015 of Mr. Dhritiman Bhattacharyya, counsel for the petitioner companies, have submitted that the petitioner companies have not received any objection pursuant to the citations published in the newspapers on 25th February, 2015. 22. Considering the approval accorded by the equity shareholders and creditors of the petitioner companies to the proposed Scheme of Amalgamation; the affidavit filed by the Official Liquidator not raising any objection to the proposed Scheme of Amalgamation and there being no surviving objection to the same by the Regional Director, Northern Region, there appears to be no impediment to the grant of sanction to the Scheme of Amalgamation. Consequently, sanction is hereby granted to the Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956. The petitioner company will comply with the statutory requirements in accordance with law. Certified copy of this order be filed with the Registrar of Companies within 30 days. It is also clarified that this order will not be construed as an order granting exemption from payment of stamp duty as payable in accordance with law. Upon the sanction becoming effective from the appointed date of Amalgamation, i.e. 15th December, 2014, the transferor companies no. 1 & 2 shall stand dissolved without undergoing the process of winding up. 23. Learned counsel for the Official Liquidator prays that costs of at least Rs.1,50,000/- should be paid by the petitioners keeping in view the fact that the matter has involved examination of extensive records and also prioritized hearings. Learned counsel for the petitioner companies states that the same is acceptable to him. As already directed vide order dated 06.01.2016, the petitioners shall deposit a sum of Rs.1,50,000/- by way of costs with the Common Pool Fund of the Official Liquidator. 24. The petition is allowed in the above terms.