TMI Blog2016 (2) TMI 758X X X X Extracts X X X X X X X X Extracts X X X X ..... nd apparently accounting standard AS14, is based on the misconception and misreading of the said accounting standard. The plain reading of the said accounting standard makes it clear that AS14 would apply only in case of amalgamation and not in case of demerger as is envisaged in the present Scheme. Compliances of circulars of SEBI by the petitioner Demerged Company being listed with BSE and NSE - With regard to the third observation, the petitioner company has already made appropriate changes in the Scheme of Arrangement. A copy of the Scheme at AnnexureA to the petition, would show that the Scheme does contain the two observations as are quoted by the Regional Director in paragraph 2(f) of his report. The said observations are part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Scheme of Arrangement, in the nature of Demerger of AAC BLOCK Division of Mohit Industries Limited into Bigbloc Construction Limite. 2 Mohit Industries Limited, the Demerged Company, filed Company Application No. 300 of 2015 seeking directions for convening and holding of the meetings of Equity Shareholders, Secured Creditors and the Unsecured Creditors. By an order dated 5.10.2015, passed in Company Application No. 300 of 2015, this Court ordered the holding of the meetings of Equity Shareholders, Secured Creditors and Unsecured Creditors of the petitioner company, to be held on 10.11.2015. This Court appointed Mr. Sitaram Saboo, Director and failing him Mr. Naresh Saboo, Director, as Chairman of the meetings. 3 The petitioner Demerg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of notice of the petition in the English Daily Newspaper Indian Express and the Vernacular daily newspaper Gujarat Mitra , having circulation in Surat. 7 It is submitted that pursuant to the order dated 23.12.2015, the petitioners have published the notices of the petitions in the Gujarati Daily Newspaper Gujarat Mitra and the English Daily Newspaper Indian Express , having circulation in Surat, on 6.1.2016. The Authorized Director of both the Companies has filed affidavits dated 8.1.2016, respectively, in support of the publication of the advertisements. 8 In response to the notice issued, the Regional Director has filed a common affidavit dated 10.2.2016, making four observations. The first observation made by the Regiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered by the Hon ble High Court of Delhi, in the case of HCL Limited (1994) 80 Com Cases 228, was pleased to reject similar objections taken by the Regional Director. 10 With regard to the second observation, it is submitted on behalf of petitioner company that the observation made by the Regional Director that the accounting treatment proposed in the Scheme is not as per the accounting principles and apparently accounting standard AS14, is based on the misconception and misreading of the said accounting standard. The plain reading of the said accounting standard makes it clear that AS14 would apply only in case of amalgamation and not in case of demerger as is envisaged in the present Scheme. In this regard, the petitioner has relied upo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Act and Rules made thereunder. 13 Having heard Mr. Navin K Pahwa, learned advocate for Thakkar and Pahwa, Advocates, learned advocate for the petitioner companies, Mr. Kshitij Amin, learned Central Government Standing Counsel on behalf of Mr. Devang Vyas, learned Assistant Solicitor General of India for the Regional Director and upon perusal of the report of the Regional Director, the reply filed on behalf of the petitioner Demerged Company and having considered the Scheme of Arrangement together with relevant documents on record, the Court finds it appropriate to grant sanction to the present Scheme of Arrangement. 14 In view of the above, the Scheme of Arrangement is sanctioned. The cost of these petitions are determined at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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