TMI Blog2009 (9) TMI 588X X X X Extracts X X X X X X X X Extracts X X X X ..... maintaining the same appointed date as mentioned in the scheme. In view of the aforesaid, the scheme deserves to be modified to the extent that the appointed date shall be 1st April, 2009 and not 1st April, 2008 as provided in the scheme. Hence, order accordingly. - - - - - Dated:- 14-9-2009 - JAYANT PATEL,J Swati Soparkar and P S Champaneri for the Appearing Parties. ORDER 1. The present petitions are for seeking sanction to the scheme of amalgamation of Shree Balaji Cinevision (India) (P.) Ltd. (petitioner of Company Petition No. 100 of 2009, transferor-company) with Balaji Electrical Insulators (P.) Ltd. (petitioner of Company Petition No. 101 of 2009, transferee-company). The scheme is produced at Annexure C in the present group of petitions. 2. In Company Petition No. 100/2009, vide order dated 20th April, 2009 passed by this court in Company Application No. 178 of 2009, as all the equity shareholders had given consent for approval of the scheme, the meeting of the equity shareholders was dispensed with and it was also recorded that as there were no secured creditors and all unsecured creditors had given their written consent for approval of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ountant has further mentioned that the amalgamation is in the best interest of its members, creditors and public at large. Such an opinion is not expected to be given by the chartered accountant, unless it is called for specifically by this court. Therefore, the said opinion of the chartered accountant to that extent does not deserve to be considered and the opinion only to the extent of conducting the affairs of the company as to whether it is prejudicial to the interest of its members, creditors or public at large or not, is required to be taken into consideration. 8. The aspect of the appointed date provided in the scheme of amalgamation deserves consideration. In the present group, the scheme at Annexure C shows that in the definitions, the appointed date is provided as under: 'The "appointed date" means 1st April, 2008 or such other date as the Gujarat High Court at Ahmedabad may direct.' 9. Therefore, the scheme itself makes the provision for alteration of the date if this court so directs. Even otherwise also as per the provisions of the Companies Act, 1956 ('1956') the Parliament has also vested such powers with this court for alteration. 10. Reference to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sections 391 and 393 it becomes at once clear that the company court which is called upon to sanction such a scheme has not merely to go by the ipse dixit of the majority of the shareholders or creditors or their respective classes who might have voted in favour of the scheme by requisite majority but the court has to consider the pros and cons of the scheme with a view to finding out whether the scheme is fair, just and reasonable and is not contrary to any provisions of law and it does not violate any public policy. This is implicit in the very concept of compromise or arrangement which is required to receive the imprimatur of a court of law. No court of law would ever countenance any scheme of compromise or arrangement arrived at between the parties and which might be supported by the requisite majority if the court finds that it is an unconscionable or an illegal scheme or is otherwise unfair or unjust to the class of shareholders or creditors for whom it is meant. Consequently, it cannot be said that a company court before whom an application is moved for sanctioning such a scheme which might have got the requisite majority support of the creditors or members or any class of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is proposed by the company. It is well settled that though delay is not to operate as a bar to exercise of the power by the court, such delay would be required to be considered not only on the aspect of alteration of the rights of the parties but may also be required to be considered on the aspect as to whether such litigant or such company as the case may be, has approached to this court at the earliest or well in time or within reasonable period or not. If the court finds that any litigant has merely allowed time to go or that he has not moved the court within reasonable time and has allowed the period to go to the extent that the whole accounting year is over and the consequence as per the relevant statute for fiscal laws may also be allowed to operate and, thereafter, has moved this court, court may find that keeping in view the said aspects, the appointed date as provided in the scheme may be altered keeping in view the aspect that there is no further complications to the proper observance of other relevant statute under the fiscal laws and the scheme works in consonance with the liabilities as may accrue under the fiscal laws for that particular accounting year. 16. Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied upon the observations made at pp. 649 to 652 of the said decision. 20. In the very decision this court at p.652 found that the purpose for which the amalgamation is proposed, is not to defeat the tax and it was further observed that if the amalgamation as proposed is not sanctioned, the loss suffered by the transferor-company would be carried forward and would be adjusted against profits which it has made in the subsequent year. Therefore, the court found that shifting the date would not result into against the public interest. In the said decision, the court had no occasion to consider the exercise of the discretion by the court after the prescription of the accounting year by statute under the fiscal laws. Further the court had also no occasion to consider the aspect of discretion to be exercised upon the delay by the litigant in approaching before the court within the reasonable time by such company concerned. 21. In case of Marshall Sons Co. (India) Ltd. v. ITO [1997] 88 Comp. Cas. 528/ AIR 1997 SC 1763, when the High Court sanctioned the scheme no order was passed for altering the appointed date and the scheme was sanctioned. Thereafter, the Income-tax Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the observations of the Apex Court reproduced hereinabove in case of Miheer Mafatlal ( supra ). 26. Mr. Soparkar, learned counsel for the petitioner, further contended that if this court alters the 'appointed date', it may result in to further complication inasmuch as, the transferor-company in anticipation of sanction which may be granted for the scheme, has not got the accounts approved through its General Board and if the appointed date is changed the accounts shall remain unapproved and it may invite further penal consequences. He also contended that the books of transferor-company are examined by official liquidator through chartered accountant up to the appointed date. Therefore, if the appointed date is altered no body is there to look after for the period after the appointed date mentioned in the scheme. Therefore, he submitted that appointed date may not be altered. 27. Firstly if such a contention is accepted, it would mean that under no circumstances the court can alter the appointed date on the face of the statutory power to make modification in the scheme. Further in the scheme itself such date is to be finalised as so ordered by this court. If any company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the delay is sufficiently explained and this court may maintain the appointed date as mentioned in the scheme. 31. As regards the meeting of the Board of directors is concerned, the same is an internal management of the petitioner-company. The relevant date would be the initiation of the statutory process for convening of the meeting by moving to this court. If the contention is entertained that the Board had passed the resolution in the end of March and, thereafter, this court is moved at the earliest though accounting year is over, it would leave room for large number of uncertainty and it may also leave room for manipulations. Therefore, it appears to the court that if the statutory process is not initiated for convening of the meeting, the appointed date in the scheme normally should not be accepted beyond the date of beginning of such accounting year. No other explanation has come on record which may require this court to take a different view for maintaining the same appointed date as mentioned in the scheme. 32. In view of the aforesaid, the scheme deserves to be modified to the extent that the appointed date shall be 1st April, 2009 and not 1st April, 2008 as p ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
