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2016 (2) TMI 354 - GUJARAT HIGH COURT

2016 (2) TMI 354 - GUJARAT HIGH COURT - TMI - Scheme of Arrangement would be in the interest of the shareholders and creditors of all the companies, as well as in the public interest. The same, therefore, deserves to be sanctioned. - COMPANY PETITION NO. 319, 320, 321, 339 of 2015, COMPANY APPLICATION NO. 229, 230, 231, 232, of 2015 - Dated:- 8-12-2015 - SMT. ABHILASHA KUMARI, J. FOR THE PETITIONORE : MR JAYMIN DAVE FOR MRS SWATI SOPARKAR, ADVOCATE FOR THE RESPONDENT : MR KSHITIJ AMIN FOR MR DEV .....

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ted, the Transferee Company, proposed under Sections391 to 394 of the Companies Act, 1956. 2. Heard Mr.Jaimin Dave, learned advocate for Mrs.Swati Soparkar, learned advocate on behalf of the petitioner Companies. 3. It has been submitted that all the companies in the proposed scheme belong to the same group of management. They are all engaged in complementary commercial activities, viz. Animal Health Products. Hence, with the primary objective of consolidation of the above activities, the Board .....

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l Health Private Limited to demerge the Trading undertaking of Innoves Animal Health Private Limited into Hester Biosciences Limited. 4. It has been further pointed out that the Transferee Company viz. Hester Biosciences Limited is a listed public limited company and the shares are listed on BSE Limited and National Stock Exchange of India Limited. In compliance with Clause24( f) of the listing agreement, as well as applicable SEBI circulars, the petitioner Company had already approached the con .....

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Biosciences Limited, the Transferee Company, all the shareholders had granted approval to the Scheme, in the form of written consent letters which were placed on record. In case of the Demerged Company as well, consent letters from all the shareholders of the company were placed on record. It has been pointed out that there are no secured creditors of any of the Transferor Companies and the Demerged Company. The unsecured creditors of these companies, wherever applicable, had given their approv .....

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otice, the said meeting was duly convened on 15th September, 2015. The Scheme was considered at the said meeting and it was approved unanimously by the Equity Shareholders of the company, present and casting valid votes at the said meeting. The report of the Chairman, along with his affidavit dated 28th September 2015, has been placed on record, which provides the details of the result of the meeting. It has been further brought to the notice of the Court that in light of the fact that no shares .....

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s already submitted the requisite Undertaking and the Auditor's certificate to the SEBI. In view of the facts and circumstances, it was not necessary for the Transferee Company to obtain the approval from its public shareholders through Postal Ballot and evoting. 7. Further, the attention of the Court is drawn to paragraph17 of the petition filed by the Transferee Company, where it has been submitted that the proposed scheme does not envisage any compromise with the Secured or Unsecured Cred .....

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w of the facts and circumstances, the meetings of the creditors of the Transferee Company were dispensed with vide the order dated 5th August, 2015. However, to comply with the contractual terms of the loan agreements with the Secured Creditors, the petitioner company has obtained the approval from all its secured creditors and the same are placed on record. 8. The substantive petitions for the sanction of the scheme were filed by the Transferor companies and Demerged company which were admitted .....

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015, and 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 20th November 2015. 9. Notice of the petitions has been served upon t he Office of the Official Liquidator for the two Transferor companies. The respective reports dated rd3 November 2015 have been filed by .....

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rocess of winding up. However, t he Official Liquidator has asked for directions to b e issued, to preserve the books of accounts, papers a nd records and not to dispose of the same without pri or permission of the Central Government as per t he provisions of Section396( A) of the Companies Act, 1956. 10. Accordingly, the Transferee Company is hereby directed to preserve the books of accounts, papers and records of all the Transferor Companies and not to dispose of the same without prior permiss .....

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Agarwal, the Regional Director, NorthWestern Region, Ministry of Corporate Affairs, whereby four main observations are made. 12. The attention of this Court is drawn to the common Additional Affidavit dated 20th November 2015 filed by Mr.Rajiv Gandhi, Chief Executive Officer and Managing Director of the petitioner Transferee Company, wherein the above observations have been dealt with. 13. This Court has heard the submissions made by the learned counsel appearing for the Central Government and M .....

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bservation letters from the said exchanges. However, under the SEBI circulars dated 4th February 2013 and 21st May 2013, the approval from SEBI has to be obtained. In this regard, it has been submitted that the said Transferee company was required to obtain SEBI approval through the stock exchanges only and the said exchanges have actually granted the observation letters only after obtaining clearance from SEBI, which is clearly evident from the observation letters. It is further clarified that .....

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ny has already complied with the said SEBI circulars, no further directions are required to be issued. (iii) The observation made vide paragraph2( e) refers to a part of the shares of the Demerged company held by a foreign national shareholder to the extent of 36.25% and part of the shares of the Transferee Company held by NRI/FII/Foreign shareholders. It has been submitted on behalf of the petitioners that the details with regard to the shareholding are admitted by the petitioner Companies. How .....

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of the same, no further directions are required to be issued to the petitioner in this regard. (iv) The observation of the Regional Director made vide paragraph2( f) pertains to the Accounting Treatment as envisaged under Clause23.4 of the Scheme. It is contended that the proposed treatment is against the requirement of accounting principles and the excess of assets over liabilities cannot be credited to the General Reserve Account and has to be treated as Capital Reserve Account. In this regar .....

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e has already settled by several decisions of various High Courts, including of this Court. The petitioner has undertaken that in case of deviation from the aforesaid accounting standard or practice, the Resulting/Transferee Company shall make necessary disclosures in its first financial statements after the Scheme is made effective. The Regional Director has sought a further undertaking that reserves so created, if any, shall not be available for distribution of dividends. In this regard, it ha .....

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ompany, to restrict the distribution of the dividend out of such Reserves. (v) The observation of the Regional Director made vide paragraph2( g) pertains to the letter dated 14th October 2015 sent by the Regional Director to the IncomeTax Department, to invite their objections, if any. Since the statutory period of 15 days, as envisaged by the relevant circular dated 15th January 2014 of the Ministry of Corporate Affairs is over, it can be presumed that the IncomeTax Department has no objection .....

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ompany, Hester Biosciences Limited. His request was to adjourn the matter. 15. As the Regional Director has stated in his affidavit that no objections have been received from the IncomeTax Department within the period of time stipulated in the Circular of the Ministry of Corporate Affairs, Government of India, it can be presumed that the IncomeTax Department has no objection to the action proposed under Section391 or 394 of the Companies Act, 1956, as the case may be. The request for adjournment .....

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terest of the shareholders and creditors of all the companies, as well as in the public interest. The same, therefore, deserves to be sanctioned. 17. Hence, the following order : (1) The prayers in terms of paragraph16( a) of the Company Petitions Nos.319 to 321 of 2015, and paragraph29( a) of the Company Petition No.339/2015, are hereby granted. (2) The petitions are disposed of, accordingly. (3) So far as the costs to be paid to the Central Government Standing Counsel is concerned, they are qu .....

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