9911796707
TMI Blog2011 (9) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... changed its name so the present name w.e.f. 17.8.2006 as per certificate of incorporation produced along with Memorandum and Articles of Association vide Annexure-E. 3. The petitioner Company is having its registered office at Ozone Manay Tech Park Block A, 6th Floor No. 56/18 & 55/9, G.B. Palya, Hosur Road, Bangalore-560 068. 4. The authorised, issued, subscribed and paid up share capital of the petitioner Company is as per the audited balance sheet made up to 30th September, 2010 which is specifically mentioned in paragraph 4 of the Petition. 5. The objects of the petitioner Company is as enumerated in the Memorandum and Articles of Association and carries on its business in data processes, call centre operators and render services in connection therewith as mentioned in detail therein. 6. Siemens Corporate Finance Pvt. Ltd., (first Transferor Company) was incorporated on 4.8.2005 at Mumbai, State of Maharashtra and is having its Regd. Office located at No. 130, Pandurang Budhkar Marg, Worli, Mumbai 400 018. Siemens Information Systems Ltd., (Transferee company) was incorporated on 29.9.1986 at Mumbai, State of Maharashtra and is having its Regd. Office located at No. 130. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r which the Balance sheet and Profit and loss account as at 30.9.2010 has been audited; adopted, approved and filed with the Registrar of Companies as required Secs. 210 and 220 of the Act. If the company is not filing the Balance Sheet and Profit and Loss account as at 30.3.2011, its affairs for one full financial year will not be audited, adopted, approved and filed in accordance with various provisions of Companies Act and also will not be available in public domain u/s. 610 of the Act. Hence, the company should file its Balance sheet, and profit and Loss account for the financial year 30.9.2011 before the scheme being put into operation or alternatively the appointed date any be changed as on 1.10.2010. 3.2 Though the scheme provides that accounting treatment adopted shall be the pooling of Interest Method in accordance with. Accounting Standard-14 but such accounting treatment does not spell out accounting of surplus/deficit as a result of cancellation of inter company investments between the Transferor and Transferee companies and difference in paid up value and investment, value of those shares going to be cancelled. In this case, on cancellation of investment of Transferor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date" in the Scheme ought to be revised as 1.10.2010 on the petitioner company has to file its Balance Sheet and profit and loss account for the financial year 30.9.2011 before Scheme being put into operation. 16. In so far as the first observation of ROC at para 3.1 is concerned, the argument advanced on behalf of the learned senior counsel, is that what is required to be placed on record by the petitioner company as per proviso to Sec. 391(2) is latest financial position of the company, along with the latest auditors report of the accounts of the petitioner company and the petition in question having been filed on 28.1.2011, the petitioner company has placed on record the audited balance sheet as on 30.9.2010 and non-filing of the accounts relating to the period 1.10.2010 up to date would not come in the way of this Court sanctioning the scheme from the appointed date namely 1.10.2011. In support of his submission, he has placed reliance on the judgment of the Delhi High Court in the matter of: Aradhana Bewerages & Foods Co. Ltd., In re AIR 1999 Delhi 69 at paragraph 12. He would elaborate his submission by contending that very scheme of amalgamation which is sought to be sanct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court of Judicature at Bombay enclosing this very Scheme of Amalgamation (Annexure-G1) for sanction and same has to be sanctioned and approved by order dated 26.8.2011 and "subject to present petition being sanctioned by this Court". 20. Learned counsel for the petitioner has filed a memo on 20.9.2011 enclosing copies of the Company Scheme Petition Nos. 82 and 83/2011 filed by first Transferor Company and Transferee Company before the High Court Judicature at Mumbai. In the said petitions also the audited accounts for the year ending 30.9.2010 had been appended thereto which came to be considered while sanctioning the Scheme. However, it would be of relevance to note the observation made by the High Court of Mumbai, while sanctioning the scheme in COP Nos. 82 and 83/2011 which is as under: "14 Since all the requisite statutory compliance have been fulfilled, Company Scheme Petition Nos. 82 of 2011 and 83 of 2011 are made absolute in terms of prayer clauses (a) to (k). The scheme is sanctioned subject to the order to be passed by the High Court of Karnataka in the Petitions filed by the Second Transferor Company." 21. In the light of the observation made by the High Court of Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... answer the above formulated question it would be necessary to extract the proviso to sub-section (2) to Section 391 of the Companies Act, 1956, which reads as under: "391. Power to compromise or make arrangements with creditors and members.-(1) ** ** ** (2) If a majority in number representing three-fourths in value of the creditors, or class of creditors, or members, or class of members as the case may be, present and voting either in person or, where proxies are allowed (under the rules made u/s. 643), by proxy, at the meeting, agree to any compromise or arrangement, the compromise or arrangement shall, if sanctioned by the (Tribunal), be binding on all the creditors, all the creditors of the class, all the members, or all the members of the class, as the case may be and also on the company, or, in the case of a company which is being wound up, on the liquidator and contributories of the company:" Provided that no order sanctioning any compromise or arrangement shall be made by the (Tribunal) unless the (Tribunal) is satisfied that the company or any other person by whom an application has been made under sub-section (1) has disclosed to the (Tribunal), by affidavit or otherwi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of, or in connection with, a scheme for the amalgamation of a company, which is being would up, with any other company or companies; shall be sanctioned by the (Tribunal) unless the Court has received a report from the Registrar that the affairs of the company have not, been conducted in a manner prejudicial to the interests of its members or to public, interest: Provided further that no order for the dissolution of any transferor company under clause (iv) shall be made by the (Tribunal) unless the Official Liquidator has, on scrutiny of the books and papers of the company, made a report to the (Tribunal) that the affairs of the company have not been conducted in a manner prejudicial to the interests of its members or to public interest." 25. The Regional Director on behalf of Registrar of Companies has contended that if 'appointed date' is approved prospectively, then the accounts of the petitioner Company would not be available for public scrutiny so as to raise their objections and it would be contrary to the provision of section 610 of Companies Act. Hence, the said provision is also extracted herein. 610. Inspection, production and evidence of documents kept by Registrar.-( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out separate order for winding up being passed and it is at that juncture, it would be incumbent upon this court to secure the reports from the Regional Director, Ministry of Corporate Affairs as well as Official Liquidator to ascertain whether there is statutory compliances and as to whether the books of account of such company is duly audited and it has not conducted its affairs in any manner prejudicial, to the interests of its members, share holders or the public at large. This exercise can be done by the company court, only after the duly audited accounts of the petitioner company is placed on record and not otherwise, before such audited accounts are placed on record by such company before this Court it has to be approved by its shareholders. Creditors etc., as also its board of Directors. The corporate entity of the Second Transferor Company seizes to exist with effect from the date of approval of Scheme of Amalgamation which in the instant case is propounded to be 1.10.2011. In the instant case, neither the shareholders, creditors of the Second Transferor Company nor the shareholders and creditors of the Transferee Company are aware as to what is the financial position of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner company, its shareholders, its creditors etc. In that view of the matter it would be necessary to issue direction to the petitioner company to serve a copy of the audited accounts relating to the period 1.10.2010 to 30.09.2011 on the Regional Director/Registrar of Companies, Karnataka and on the Official Liquidator to enable them to have their say both in the interest of the shareholders, creditors, etc., as also the public. In that view of the matter, directions are being given herein below by passing the following: ORDER CO.P.27/2011 is hereby allowed. The Scheme of Amalgamation vide Annexure-G1 is hereby sanctioned subject to the following conditions: (i) The applicant company shall file the audited accounts of the petitioner company relating to the period 1.10.2010 to 30.09.2011 with the Regional Director, Ministry of Corporate Affairs, South East Region, Hyderabad with a copy to the Registrar of Companies, Karnataka, Bangalore on or before 30.11.2011. On such accounts being filed the Regional Director/Registrar of Companies shall examine the same and file a report/affidavit in this regard within two weeks from the date of receipt of the said accounts. (ii) The a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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