TMI Blog2016 (3) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... ctioning. - COMPANY PETITION NO. 236, 237, 239 of 2015, COMPANY APPLICATION NO. 76, 77, 79 of 2015 - - - Dated:- 8-3-2016 - SMT. ABHILASHA KUMARI, J. FOR THE PETITIONER : MS DHARMISHTA RAVAL, ADVOCATE FOR THE RESPONDENT : MR. KSHITIJ AMIN, CENTRAL GOVERNMENT STANDING COUNSEL FOR MR DEVANG VYAS, ADVOCATE ORAL ORDER 1 These petitions have been filed by the Petitioner Companies for the sanction of the Composite Scheme of Arrangement between Chamanlal Mehta and Company ( Transferor Company1 ) and Victoria Ventures Limited ( Transferor Company 2 ) and Galactic Enterprises Limited ( Transferor Company 3 ) and Mangaldas Mehta and Company Limited ( Transferee Company ) and with their respective shareholders and creditors, ( Scheme ) under Section 391 to 394 of the Companies Act, 1956. 2 It is submitted that the Arrangement of the Transferor Companies with the Transferee Company would enable the merged entity to focus on, and enhance, the business of running a hotel and also carrying on the activities of a restaurant. Moreover, the proposed Arrangement between the Transferor Companies with the Transferee Company would enable the companies to carry on and conduct t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... companies and Mr. Kshitij Amin, learned Central Government Standing Counsel on behalf of Mr. Devang Vyas, learned Assistant Solicitor General of India. 10 In the above affidavit, the Regional Director has, inter alia, made the following observations: a) In paragraph 2(c) it is submitted that no share exchange ratio has been recommended for the 6 nominee shareholders of the Petitioner Transferor Company 2 namely M/s. Victoria Capital Ventures Limited. b) In para 2(d) it is submitted that the issued share capital of ₹ 40,00,000 of the Petitioner Transferor Company namely M/s. Mangaldas Mehta and Company Limited is further divided into 3,62,600 number of Class A equity shares and 37,400 number of Class B equity shares and that, petitioner Transferor Company 2 holds 3,86,700 number of equity shares whose bifurcation is not submitted by the petitioner Transferee Company into Class A and Class B equity shares. c) In para 2(e) it is submitted that in the scheme there is no separate clause provided for cancellation of those shares which are held by the petitioner companies in other petitioner companies. d) In para 2 (f) it is submitted that the accounting treatment as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gional Director, Ms. Dharmishta Raval, learned advocate for the petitioners, has submitted upon instructions, that the Petitioner Transferee Company undertakes, on the sanctioning of the Scheme, to cancel the shares held by petitioner Transferor Company 1 and 2 and a new clause 9.1 A may be added as follows: 9.1 A On the scheme being sanctioned the shares held by Transferor Company in another Transferor Company shall stand cancelled . 14 In response to the fourth observation made by the Regional Director, Ms. Dharmishta Raval, learned advocate for the petitioners has submitted that section 211 (3B) of the Companies Act, 1956, along with relevant provisions of Companies Act, 2013, itself envisages and provides for deviation from the Accounting Standard. The Companies Act provides that if the practice adopted for an accounting entry varies from the said standard, necessary disclosures should be made in the financial statements. In view of the several decisions of various High Courts, including of this Court, on the said issue, the petitioner hereby undertakes to make disclosures in the first financial statements of the petitioner Transferee Company after the Scheme is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undup. 18 As regards the observation raised by the Official Liquidator in his reports has stated that the Petitioner Transferor Companies be directed to preserve its books of accounts, papers and records and not dispose the same without prior permission of the Central Government as per Section 396 A of the Companies Act, 1956, it was submitted by Ms. Raval, learned advocate that as observed by the Official Liquidator, the books of account and papers would be preserved by the Petitioner Company as per Section 396 A of the Companies Act,1956. It was further submitted by Ms. Raval, learned advocate, that petitioner companies would comply with the provisions of the Companies Act, 1956, including Section 294 thereof. 19 In view of the above discussion, the observations made by the Regional Director having been addressed and the Official Liquidator having opined that the affairs of the Petitioner Transferor Companies have not been conducted in a manner prejudicial to the interest of its members or to the public interest, in the opinion of this Court, there does not appear to be any impediment to the grant of sanction to the Composite Scheme of Arrangement. From the material on reco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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