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2016 (5) TMI 593 - GUJARAT HIGH COURT

2016 (5) TMI 593 - GUJARAT HIGH COURT - TMI - Scheme of Amalgamation deserves to be sanctioned. The proposed Scheme of Arrangement in the nature of Buy Back of the Equity Shares and consequential Restructure of Capital is hereby sanctioned. - COMPANY PETITION NO. 105 of 2016, COMPANY APPLICATION NO. 113 of 2016 - Dated:- 2-5-2016 - SMT. ABHILASHA KUMARI, J. FOR THE PETITONER : MRS SWATI SOPARKAR, ADVOCATE FOR THE RESPONDENT : MR KSHITIJ AMIN FOR MR DEVANG VYAS, ADVOCATE ORAL ORDER 1. This is a p .....

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nd selling of plastic processing machineries and components thereof. It is a profit- making company with substantially positive Net Worth. It is further submitted that the Petitioner Company has substantial liquid funds available which are more than its requirements, and hence, the Company has considered restructuring its share capital through purchase/Buy Back of Equity Shares from its existing Shareholders to the required extent. It is envisaged that such Scheme shall be beneficial to the Appl .....

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ave approved the proposed Scheme of Arrangement. 3. It has been submitted that vide the order dated 2th9 March 2016, passed in Company Application No.113 of 2016, the meeting of the Equity Shareholders of the Petitioner company was dispensed with, in light of the consent letters of the shareholders, being placed on record. There are no Secured Creditors of the Petitioner Company, as on date. It has been further submitted that the rights and interests of the Unsecured Creditors of the Petitioner .....

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was ₹ 222.9 Crores; Whereas in the Post Scheme scenario it shall still be approximately ₹ 154. 9 Crores. Considering the strong financial position o f the Petitioner Company, the meeting of the Unsecure d Creditors was dispensed with, vide the above referred order dated 29th March 2016. 4. A substantive petition for the sanction of the Scheme was filed by the petitioner company, which was admitted on 5th April 2016. The notice for the hearing of the petition was duly advertised in t .....

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nt and Shri Devang Vyas, learned Assistant Solicitor General appear for the Central Government. An affidavit dated 27th April 2016 has been filed by Mr.Shambhu Kumar Agarwal, the Regional Director, North-Western Region, Ministry of Corporate Affairs, whereby some observations are made. 6. The attention of this Court is drawn to the common Additional Affidavit dated 28th April 2016 filed by Mr.Vinod Bhalavat, the Chief Financial Officer and Authorised Signatory of the Petitioner Company whereby t .....

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MA and RBI guidelines must be ensured. In this regard, it has been submitted that the petitioner is not required to obtain any prior approval for the proposed Scheme under the provisions of the above referred Acts. The petitioner has, so far, complied with and has further undertaken to comply with the applicable provisions of the said Acts as and when necessary, for the implementation of the Scheme. 7.2 The observation of the Regional Director made vide paragraph2(d) pertains to the factual stat .....

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shares upto 25% of the Capital of the Company. It has been observed by the Regional Director that the present petitioner has not chosen to go for Buy Back by following the procedure laid down under the said provisions and have chosen to present the Scheme under Section391 of the Companies Act, 1956. In this regard, it has been submitted on behalf of the Petitioner that it is open to any company to adopt either of the modes for the said purpose. Reliance has been placed on judgments of this Cour .....

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28th April 2015, passed by Bombay High Court in the matter of Capgemini India Private Limited, deals with the same issue and the ratio of the said judgment also confirms that it is open to a company to buy back its own shares by following the procedure prescribed under Section 77A of the Companies Act or Section 391 read with other applicable provisions of the Companies Act. Both these judgments have relied upon the decision of the Division Bench of Bombay High Court in the matter of SEBI V/s St .....

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r no longer survives in light of the above. 7.4 Vide the observation made in paragraph2( f), the Regional Director has pointed out the difference between the Book Value of the Share and the recommended Buy Back Price. In this regard, it has been submitted that the Petitioner has relied upon the valuation undertaken by an independent Chartered Accountant who has worked out the Fair Value of the Shares of the Petitioner Company after taking into account the relevant factors. 7.5 The next observati .....

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