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IN RE : BIGBLOC CONSTRUCTION LIMITED

2016 (2) TMI 758 - GUJARAT HIGH COURT

Scheme of Arrangement in the nature of Demerger - Appointed Date - Held that:- It is now settled law that it is open for a Company to propose any date as the appointed date, in its wisdom, and so long as the Scheme with a particular appointed date is approved by the members of the Company, the objections of the Regional Director may not be sustained.

Accounting treatment proposed in the Scheme is not as per the accounting principles and apparently the accounting standard AS14 - With r .....

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irculars 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 Clause 14 of the Scheme. As such, this observation is also not sustain .....

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Regional Director, it may be presumed that the Income Tax Department has no objection to the action proposed under Sections 391 to 394 of the Companies Act, 1956. In any case and without prejudice to the above, the petitioner companies submit that they would undertake the compliance of the Income Tax Act and Rules made thereunder. Thus this Court finds it appropriate to grant sanction to the present Scheme of Arrangement. - COMPANY PETITION NO. 439, 440 of 2015, COMPANY APPLICATION NO. 299, 300 .....

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s 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 .....

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y this Court and, further, that all the Equity Shareholders, Secured Creditors and Unsecured Creditors, present in the respective meetings, in person or through proxy, have unanimously approved the Scheme of Arrangement. 4 Bigbloc Construction Limited, the resulting Company, filed Company Application NO. 299 of 2015 seeking dispensation of the meeting of the Equity Shareholders of the petitioner company. The petitioner further submitted that this being the Resulting Company, the meeting of the c .....

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dmitted the petitions and directed the issuance of notice to the Regional director in case of both the companies. This Court also directed publication 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 Newspa .....

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to AS14. As per the observation made by the Regional Director, the accounting treatment proposed in the Scheme is not as per the accounting principles and apparently the accounting standard AS14. The third observation made by the Regional Director is with regard to compliances of circulars of SEBI by the petitioner Demerged Company being listed with BSE and NSE. The fourth observation made by the Regional Director is with regard to invitation of comments from the Income Tax Department. Accordin .....

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proved by the members of the Company, the objections of the Regional Director may not be sustained. It is further submitted that the particular issue about the appointed date being prior to the date of incorporation of the Resulting Company came up for consideration before this Court in the case of Patel Airtemp (India) Ltd. Wherein, this Court, while considering a judgment rendered by the Hon ble High Court of Delhi, in the case of HCL Limited (1994) 80 Com Cases 228, was pleased to reject simi .....

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of amalgamation and not in case of demerger as is envisaged in the present Scheme. In this regard, the petitioner has relied upon a decision of this Court in the case of Gallops Realty Private Limited, reported in (2009) 150 Comp Cases 596. 11 With regard to the third observation, it is submitted that the petitioner Demerged Company has made necessary averments in paragraphs 8 to 10 in the petition, suggesting that the petitioner company has already made appropriate changes in the Scheme of Arra .....

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r, no adverse remarks, within the stipulated period of time, are received from the Income Tax Department. In the Circular date 15.1.2014 of the Ministry of Corporate Affairs, it is stipulated that if no response is received from the Income Tax Department within a period of fifteen days from the receipt of the notice by the Regional Director, it may be presumed that the Income Tax Department has no objection to the action proposed under Sections 391 to 394 of the Companies Act, 1956. In any case .....

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