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2015 (6) TMI 72 - HC - Companies LawApplication for Scheme of Amalgamation - Regional Director's observations regarding compliance required by RBI for NBFC and Further time required for examination of records by Income tax department, duly addressed - Commissioner-IT observations regarding non competitiveness of transferor / transferee companies , Non transfer of certain assets and share exchange ratio duly addressed - Held that:- It is submitted that all documents as had been asked for by the RBI have already been submitted, and the remaining documents will be submitted post the approval of the Scheme by this Hon’ble Court. Moreover, the Transferor Company is a non deposit taking NBFC. Hence there has been compliance by the Transferor Company. Copies of the entire correspondence between the Transferor Company and the RBI are annexed herewith as Annexure A. f. That the deponent further undertakes that all compliances as may be required by the RBI, referred to here in above, shall be duly complied with by the Transferor Company. In view of the clause 4.2 of the Scheme it is incumbent upon the Transferee Company to take over and be responsible for any liability of the Transferor Company, whether reflected in its books or not. Thus in the event of any demand raised by the Income Tax Department, the deponent undertakes that the Transferee Company shall duly discharge the same, in accordance with law. The learned counsel, Mrs. Munisha Gandhi, contended that even though the Transferor company may be having a small capital base but it also has other assets which would definitely be used in a more fruitful manner once they merged with the Transferee company which is having a greater capital base and greater resources. She further submits that the companies are part of the same group of companies and economies of scale would be achieved by merging the two entities. She submits that the current balance sheet and assets submitted to this Hon’ble Court and the Scheme clearly prescribes the entire assets of the Transferor Company which stands transferred to the Transferee Company. Moreover, the phrase “whether reflected in the books of accounts or not” in normal business parlance refers to the swapping of new assets with the existing assets or the future income during the course of ongoing business transactions of a running company.It is also submitted that in view of the undertaking given by the authorized signatory of the Transferee Company that in the event of any demand raised by the Income Tax Department, the Transferee Company shall duly discharge the same, in accordance with law; the observation of the Income Tax Department is irrelevant and meaningless. The shareholders are the sole authority to decide regarding the exchange ratio of merger and once the shareholders have approved and accepted the same it would not lie with the Income Tax Department to sit in judgment on the wisdom and decision of the shareholders. She further submits that the Official Liquidator has in Para 5 of his report submitted that the amalgamation is not prejudicial to the interest of its Members or to public interest. Thus the objection / observation made by the Income Tax Department is unsustainable and irrelevant. - Application for Scheme of Amalgamation approved.
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