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2015 (4) TMI 307 - HC - Companies LawApplication for approval of Scheme of Arrangement under Section 391-394 of the Companies Act,1956 - Objections received from Sales promotion employees of transferor company and one Unsecured creditor - Observations made by Official Liquidator and Regional Director - Held that:- It was submitted that it does not dispute the locus of employees, who filed the applications. He submitted that it is a small group of 750 employees out of total 13000- 14000. All the rights of the existing employees of the Transferee Company have been fully protected under Clause 13 of the Scheme of Arrangement. It has been specifically mentioned therein. Further submitted that the objector was one of the unsecured creditor to the extent of ₹ 17,86,276.80. A sum of Euro 45,000 were paid to the objector in June, 2014, which cleared entire debt due against the transferor company. Once it was not the creditor of the Transferor Company, it had no locus to file the application. In the report of the Official Liquidator, it has been stated that the Scheme of Arrangement is prejudicial to the interest of revenue and public at large, as the Scheme is designed to set off “Carry Forward and Set Off Accumulated Losses and Unabsorbed Depreciation” of the Transferor Company against profits of the profit making Transferee Company. The Scheme was sent to the Income Tax Department. No comments have been received. In case it is legally permissible for the Transferor Company to carry forward and set off all the losses, it shall be entitled to the benefit in case the law does not put a restriction thereon. In response to observation made by Regional Director it was submitted that scheme has been prepared in terms of Accounting Standard-14. Copy of the Scheme was sent to the Chief Commissioner of Income Tax, Chandigarh. How ever, no comments have been received.Also all legal formalities required shall be complied with by the Transferor Company. A perusal of the order passed by the Commission shows that exhaustive exercise was carried out to find out the effect of merger on the public at large. The Commission has issued comprehensive directions in consonance with the provisions of the Competition Act, which are to be complied with by the Transferor / Transferee Companies.No doubt, the Commission has taken full care of the interest of the consumers of the medicines manufactured by both the companies, however, still as an abundant caution, it is added that during the period the entire process of Divestment is completed, the monitoring agency shall also monitor the prices of the drugs manufactured by the combined entity. For the reasons afore-stated and on consideration of all the relevant facts and the procedural requirements contemplated under Sections 391 to 394 of the Companies Act, 1956 and the relevant Rules the Scheme of Arrangement approved.
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