TMI Blog2009 (4) TMI 456X X X X Extracts X X X X X X X X Extracts X X X X ..... titions filed by the petitioner-companies for sanction of a scheme of arrangement in the nature of amalgamation of five transferor companies, viz., Nirmay Properties (P.) Ltd., Shreya Realities (P.) Ltd., Pulkit Developers (P.) Ltd., Ankita Builders (P.) Ltd., and Rishabh Infrastructure (P.) Ltd., with Sterling Addlife India Ltd., the transferee company under section 391 read with section 394 of the Companies Act, 1956. All the petitioner-companies belong to the same group of management and all the transferor companies are wholly owned subsidiaries of the transferee company. 2. It has been submitted that vide orders dated 15-5-2008, passed in Company Application Nos. 343, 344, 345, 346 and 347 of 2008, meetings of the equity shareholders and unsecured creditors of the transferor compa-nies were dispensed with in view of the written consent letters placed on record. There were no secured creditors of these companies. Whereas vide order passed on 15-5-2008, in Company Application No. 348 of 2008, meeting of the equity shareholders was directed to be convened. The scheme was unanimously approved by all the equity shareholders present and voting at the said meeting duly conve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... untant is as under : 1. Note to paragraph 5 on shareholding pattern The transferor companies had become subsidiary of the transferee company on 10-5-2007, i.e., after the balance-sheet date of 31-3-2007 and, therefore, the auditors of the company have not stated the shares held by the holding company, since as on the balance-sheet date there was no holding subsidiary relationship. The annual return was filed based on the annual general meeting date, on which the transferor companies had become subsidiary of the transferee company and therefore the correct shareholding pattern was incorporated in the annual return. 2. Paragraph 8 on books of account The management of the transferor companies was taken over by the present board during the financial year 2006-07. On taking over of the management, there was a cash shortfall of Rs. 57,125 and, therefore, the management decided to write it off the short fall in cash by passing the board resolution. Accordingly, such shortfall in cash was written off to profit and loss a/c, after obtaining the approval in the board meeting. Further, the auditor of the company have not qualified the report or the Registrar of Companies, Gujar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08 ( h )The transferee company is not a listed Indian company. Further, as on the balance-sheet date there was no holding subsidiary relationship and therefore there was no requirement to make any disclosure as per AS-18. The necessary disclosure of the transaction was made in the audited accounts of the transferee company at Note No. 2. Regarding disclosure as per AS-4, please refer our reply at paragraph ( c ) above. 6. On the basis of the explanation furnished by the company, the Official Liquidator has observed that violation of provisions of the Companies Act and Accounting Standards and the adverse observations of the chartered accountant are not satisfactorily clarified/explained by the company, more particularly, the evasion of stamp duty in the context of judgment of this court in the case of Wood Polymer Ltd., In re [1977] 47 Comp. Cas. 597 , and the evasion of income-tax of Rs. 2,23,84,000 causing substantial loss to the exchequer. The Official Liquidator has, therefore, stated that subject to the report of the chartered accountant, the affairs of the transferor companies have not been conducted in a manner prejudicial to the interest of its members or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the statutory authorities have any doubt on any of the affairs of either or both the transferor companies, even after amalgamation, the transferee company would be in a position to attend to all the queries which may be raised or inquiry which may be initiated by any such authority. Hence, any inquiry or investigation which may be pending or initiated against any of the transferor companies will not be prejudiced by amalgamation of the transferor companies with the transferee company". (p. 543) 9. Mr. Soparkar further relied on the decision of this court in the case of Gujarat Ambuja Cotspin Ltd., In re [2001] 104 Comp. Cas. 397 , wherein while dealing with the objections raised against the scheme, this court has clarified that the order of sanctioning the scheme will not come in the way of the appropriate Revenue authorities in looking into the objections which have been raised by the objector and taking appropriate actions in accordance with law for which the transferee company shall always remain accountable. 10. Mr. Soparkar has further relied on the decision of this court in the case of Arvind Mills Ltd., In re [2002] 111 Comp. Cas. 118 1 , wherein while dealing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, the report of the Official Liquidator as well as the affidavit of the Deputy Registrar of Companies, the court is of the view that the objections raised by the Official Liquidator have been properly explained by the petitioner transferor companies in their reply to the notice issued by the Official Liquidator as well as in the affidavit filed before this court. The issues raised by the chartered accountant have come up before this court earlier and they have been duly considered by the court. Despite these objections, the court has granted its sanction to the scheme subject to certain reservations. Here in the present case also, while considering the objections raised by the chartered accountant, the court is of the view that these objections would not affect the scheme and on the basis of these objections, it is not possible for this court to come to the conclusion that the affairs of the company have been conducted in a manner prejudicial to the interest of the shareholders or to the public interest. Certain irregularities which are pointed out by the chartered accountant have been taken care of by the transferee company. There is no substance with regard to avoidance of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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