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TMI Blog2014 (7) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... Company No.1) and M/s Vodafone Mobile Services Limited (Transferee Company/ Petitioner Company No.2) are situated at New Delhi within the jurisdiction of this Court. The Registered Office of M/s Vodafone West Limited (Transferor No.2) is situated in the State of Gujarat and for which the said Company has filed Company Petition before the High Court of Gujarat at Ahmedabad for sanction of the Scheme. 3. The details of respective dates of incorporation of the Petitioner Companies, their authorized, issued, subscribed and paid up capital have been set out in the Petition. 4. The copies of Memorandum and Articles of Association of the Petitioner Companies have been enclosed with the Petition. 5. The copies of resolutions passed by the Board of Directors of the Petitioners Companies approving the Scheme have also been filed along with the Petition. 6. Learned counsel for the Petitioner Companies submits that no proceedings under Sections 235 to 251 of the Act are pending against the Petitioner Companies. 7. The Petitioner Companies had earlier filed Co.Appl.(M) 38/2013 seeking dispensation from convening the meetings of the Equity Shareholders, Secured Creditors and Unsecured Cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d creditor of the Petitioner/Transferor Company 1. The Official Liquidator has further stated that no complaint has been received against the proposed Scheme from any person or party interested in the Scheme till the date of filing of the Report. The Official Liquidator has further stated that subject to the submissions made in paras 15 and 16 of the Report, the affairs of the Petitioner/Transferor Company No.1 do not appear to have been conducted in a manner prejudicial to the interests of its members or to public interest as per the 2nd proviso of Section 394 (1) of the Act. 11. In response to the Report of the Official Liquidator, the Petitioner/Transferor Company No.1 has filed Reply dated 13.02.2014. In response to para 15 of the Report of the Official Liquidator, Learned Senior Counsel for the Petitioner Companies submits that the objections of M/s Skipper Limited as referred to in the Report of the Official Liquidator are not tenable in law and the said unsecured creditor cannot be permitted to raise its purported money claim in proceeding under Section 391 of the Act which are for sanction of the Scheme. The Petitioner/Transferor Company No.1 has also filed its Reply to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the said letters, approval would be obtained from the DoT for transfer of licenses after the sanction of the Scheme by the respective High Courts. In view of the above, the concern of the Regional Director is addressed. 16. The third observation raised by the Regional Director relates to the pendency of the Scheme of Amalgamation in Co. Pet. No.488/2012 filed before this Court. It is submitted by the Senior Counsel for the Petitioners that the Scheme subject matter of Co.Pet 488/2012 since been sanctioned by this Court on 01.04.2014 after hearing all the concerned parties viz. Regional Director, Official Liquidator and the Income Tax Department. In this view of the matter the concern of the Regional Director does not survive. 17. The fourth observation raised by the Regional Director is that the present Scheme is pre-mature since Company Petition No.488 of 2012 is pending. Learned Senior Counsel for the Petitioner submits that the Scheme being subject matter of C.P. No.488 of 2012 has since been sanctioned by the Delhi High Court on 01.04.2014, by the High Court at Calcutta on 22.03.2013 and High Court of Madras on 05.06.2013. It is further submitted on behalf of the Petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue Department in connection with other Scheme of de-merger and merger filed in respect of Vodafone Group Companies, (c) There should not be any writing off any liability by the Transferor Companies and (d) As per para 3.7 of the Scheme, in case any amount is created to General Reserve Account in the financial statement of the Transferee Company, the same should not be utilized to pay any dividends under the Companies Act. 21. As regards the rights of the Income Tax Department to proceed against the Transferee Company, Learned Senior Counsel has relied on the ORDER DATED 01.04.2014 IN C.P. NO.488 OF 2012 M/S VODAFONE DIGILINK LTD. AND ORS and submits that similar protection may be granted to the Income Tax Authorities. 22. In view of the above, it is clarified that any income tax liability which is payable by the transferor companies shall be paid by the transferee company as the liabilities of the transferor companies stand transferred to the transferee companies. Therefore, any liability that falls on the Transferor Companies on account of any earlier transaction shall have to be borne by the Transferee Company. It is also clarified that any tax benefit by way of refund or a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Institute of Chartered Accountants of India. In view of the above, the concern of the Regional Director and the Income tax authorities has been addressed. 24. The Regional Director has at para 10 of the Report observed that the Appointed Date under the Scheme be shifted to 01.04.2013. Learned Senior Counsel for the Petitioner Companies submits that Appointed Date of 01.04.2012 as specified in the Scheme has been accorded approval by the Board of Directors and the shareholders of the respective companies. It is submitted that the choice of an appointed date is the prerogative of the respective companies and approval has been granted to the present Scheme incorporating the said Appointed Date. It is further submitted that the Board of Directors of the Petitioner Companies and the Transferor Company-2 approved the present Scheme on 21.03.2013. The equity shareholders of the Petitioner Companies and the Transferor Company-2 have also approved the present Scheme by letters dated 21.03.2013 and the Company Application (Main) No. 38 of 2013 was sworn on 22.03.2013. 25. Mr. Atma Sah, Assistant ROC has relied upon the JUDGMENT DATED 26.03.2014 OF THIS COURT IN CO.PET. NO. 653/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in law which requires a report for the share exchange ratio or that such report has to be prepared only by chartered accountants. Without prejudice to the aforesaid, it is submitted that M/s Ernst & Young Private Limited is a company providing various services like financial advisory, tax advisory, management consulting, valuation etc. Learned Senior Counsel submits that as per the instructions received from Ernst & Young Private Limited, the team in respect of the present report comprised of chartered accountants, cost accountants and experts in the field of finance. Learned Senior Counsel in support of his contention has relied upon the judgment of this Court in M/S KEANE INTERNATIONAL DATED 06.07.2009 IN C.P. NO.160 OF 2009 and the judgment of the PUNJAB & HARYANA HIGH COURT IN VARDHMAN TEXTILES LIMITED DATED 24.01.2008 IN C.P. NO.59 OF 2007. It is further submitted that no objection to the swap ratio or valuation has been raised by the Regional Director. In view of the submissions on behalf of the Petitioners and the law as laid down, the objection of the Regional Director is not sustainable. 29. As regards the observations of the Regional Director in para 12 and 13 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectors, M/s Skipper Limited and Associated Towers Structure Private Limited have not yet initiated any proceedings for recovery of amounts purportedly due to them. This Court is of the view that the claim raised by the three Unsecured Creditors cannot be agitated in the present proceedings for sanction of the Scheme. It is however clarified that the sanction of the Scheme will not in any manner affect the Arbitration proceedings between the Transferee Company and M/s Matrix Cellular Services Private Limited and would not come in the way of the said M/s Skipper Limited and M/s Associated Towers availing legal remedies for recovery of amounts claimed to be due to them subject to objections available under law to the Transferee Company, including the plea of alternate remedy and limitation. In this view the objections raised by the three Unsecured Creditors do not survive. 32. The Petitioner Companies have placed on record communications from Unsecured Creditors to the effect that they shall be opposing the scheme. However, none of these Unsecured Creditors have appeared before this Court or filed objections to the Scheme before this Court. 33. In view of the approval accorded by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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