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2016 (2) TMI 204 - GUJARAT HIGH COURT

2016 (2) TMI 204 - GUJARAT HIGH COURT - TMI - Scheme of Amalgamation - As the requirements of the provisions of sections 391 to 394 of the Companies Act, 1956 are satisfied. The Scheme appears to be genuine and bonafide and in the interest of the shareholders and creditors. This Court, therefore, considers it proper to allow Company Petitions and approve the Scheme. The Scheme stands sanctioned and the prayers made in the respective Company Petitions are granted. - COMPANY PETITION NO. 368 of 20 .....

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ture of Slump Sale of Jamnagar Windmill Undertaking of Olympic Laminates Private Limited, The Transferor Company to Sara Suppliers Private Limited, and Amalgamation of residue Undertaking of Olympic Laminates Private Limited with Sara Suppliers Private Limited, the Transferee Company, proposed under Section 391 to 394 of the Companies Act, 1956. 2 It is submitted that both the companies in the proposed Scheme belong to the same group of management viz. Royal Laminates group. Olympic Laminates Pr .....

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posed for the consolidation of operations and it is envisaged that the proposed reorganization would result into synergic benefits. The petitions provide the details of the anticipated advantages. 3 It has been submitted that vide orders dated 29th October 2015, passed in Company Application No. 324 and 325 of 2015, meetings of the Equity Shareholders of both the companies were dispensed with in light of the consent leters of all the shareholders being placed on record. The Secured Creditors and .....

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ised in Ahmedabad editions of the English daily newspaper Indian Express and the Gujarati daily newspaper Sandesh dated 18th November 2015. The publication in the Government gazette was dispensed with as directed in the said orders. Pursuant to the said publication in the newspapers, no objections were received by the petitioner or its advocate. The said fact has been confirmed vide the common additional affidavit dated 04th January 2016. 5 Notice of the petition has been served upon the Office .....

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r Transferor Company may be dissolved without following the process of winding up. However, the Official Liquidator has sought direction to preserve the books of accounts, papers and records and not to dispose of the same without prior permission of the Central Govt. as per the provisions of Section 396(A) of the Companies Act, 1956. 6 Accordingly, the Transferee company is hereby directed to preserve the books of accounts, papers and records of the Transferor Company and not to dispose of the s .....

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common affidavit dated 17th December 2015 has been filed by Mr. Shambhu Kumar Agarwal, the Regional Director, NorthWestern Region, Ministry of Corporate Affairs, whereby some observations are made. 8 The attention of this Court is drawn to the common Additional Affidavit dated 4th January 2016 filed by Mr. Jitendra Patel, the Director of the petitioner Transferor Company whereby the said issues have been dealt with. This Court has heard submissions advanced by the learned counsel appearing for t .....

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tted that upon the Scheme becoming effective, the petitioner Transferee Company shall make the requisite financial arrangements for the same. Further, it is pointed out by the Regional Director that two separate business undertakings are proposed to be transferred by the petitioner companies by way of the present single composite Scheme. He has requested this Court to direct the petitioner companies to place on record all the relevant facts of the matter. In this regard, it is submitted that the .....

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arrangement. 10 In this context learned counsel for the petitioner has relied upon a judgment of the Supreme Court in the case of Miheer H Mafatlal, reported in (1996) 4 Comp LJ 124 (c) . The relevant extract is reproduced below: 28. However further question remains whether the Court has jurisdiction like an appellate authority to minutely scrutinise the scheme and to arrive at an independent conclusion whether the scheme should be permitted to go through or not when the majority of the creditor .....

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ormed view of the concerned parties to the compromise as the same would be in realm of corporate and commercial wisdom of the concerned parties. The Court has neither the expertise nor the jurisdiction to delve deep into the commercial wisdom exercised by the creditors and members of the company who have ratified the Scheme by the requisite majority. Consequently the Company Court s jurisdiction to that extent is peripheral and supervisory and not appellate. The Court acts lime an umpire in a ga .....

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h 2(d) of the affidavit, it has been observed by the Regional Director that the working sheet for the calculation of the Share Exchange Ratio has not been submitted by the petitioner companies. In this respect, it has been submitted that since both the companies belong to the same group and by and large there is the same set of shareholders, it is not necessary to provide the working sheets. It is further submitted that such an objection is beyond the purview of the Regional Director. 13 In Wels .....

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further submitted that the valuer has, as is relevant, given the context that all the shareholders of the Demerged Company shall receive proportionate shareholding in the Resulting Company, based on his findings and given his recommendation on the basis of the ok value of the assets and on the basis of the share capitals of the Demerged Company and the intended share capital of the Resulting Company. The share exchange ratio that has been arrived at by the valuer has been approved by more than .....

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eholders..... . Therefore, the submission with regard to working sheets is unwarranted . 14 Considering the above facts and circumstances, this court does not think it necessary to direct the petitioner companies to place on record the working sheets, particularly in light of the fact that all the shareholders of both the companies have thought it appropriate to approve the Scheme with the proposed exchange ratio and no questions have been raised in this regard. 15 Vide paragraph 2(e) of the aff .....

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mitted that the Transferor company had obtained the requisite permissions and licenses to carry on the said activity. However, they being general licenses, upon the Scheme becoming effective, the Transferee company shall do needful to obtain such licenses as are necessary as well as the other regulatory approvals, or amend the respective licenses, as applicable under the applicable laws from the respective regulatory authority. The power generation activity shall be undertaken by the Transferee .....

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. The petitioner companies have agreed to comply with the applicable provisions of the Income Tax Act and rules. In view of the same, no further directions are required to be issued to the petitioner companies in this regard. 18 Considering the above facts and circumstances and the contentions raised in the affidavits and counter affidavits, the judgments cited at the Bar, and the submissions on behalf of the parties, this Court is of the view that the observations made by the Regional Director, .....

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