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2016 (5) TMI 595 - GUJARAT HIGH COURT

2016 (5) TMI 595 - GUJARAT HIGH COURT - TMI - Scheme of Amalgamation - Held that:- Perusal of the reports of the Official Liquidator and the Regional Director, the replies filed on behalf of the petitioner Transferee company and having considered the Scheme of Amalgamation together with the relevant documents on record, the Court considers it appropriate to grant sanction to the present Scheme of Amalgamation.

In view of the above, the Scheme of Amalgamation is sanctioned. It is, howe .....

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dator. - COMPANY PETITION NO. 260 of 2015, COMPANY APPLICATION NO. 143 of 2015, COMPANY PETITION NO. 261 of 2015, COMPANY APPLICATION NO. 144 of 2015, COMPANY PETITION NO. 262 of 2015, COMPANY APPLICATION NO. 145 of 2015 - Dated:- 3-5-2016 - SMT. ABHILASHA KUMARI, J. FOR THE PETITIONER : MR NAVIN K PAHWA FOR MRS SANGEETA N PAHWA, ADVOCATE FOR THE RESPONDENT : MR KSHITIJ AMIN FOR MR DEVANG VYAS, ADVOCATE COMMON ORAL ORDER 1. The present petitions are filed under the provisions of Sections 391 to .....

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der dated 28.4.2015, passed in Company Application No. 143 of 2015, this Court ordered the dispensation of the meeting of the Equity Shareholders and further ordered that this being the Transferee Company, the meeting of the Creditors is not required to be held. 3. Fine Hydrochem Private Limited, one of the Transferor Companies, filed Company Application No. 144 of 2015, seeking dispensation of the meetings of the Equity Shareholders and Unsecured Creditors of the petitioner company. By an order .....

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passed in Company Application No. 145 of 2015, this Court ordered the dispensation of the meetings of the Equity Shareholders and Unsecured Creditors. It is reported that there are no secured creditors of the petitioner company. 5. The petitioners, thereafter, filed Company Petition Nos. 260, 261 and 262 of 2015, seeking sanction of the Scheme of Amalgamation. 6. By separate orders dated 7.8.2015, this Court admitted the petitions and directed the issuance of notice to the Regional Director in c .....

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ess, having circulation in Vapi, on 22.08.2015. The Authorised Signatory of all three companies has filed affidavits dated 07.09.2015, 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 18.02.2016, and thereafter has also filed further reply affidavit dated 12.04.2016, making some observations. The petitioner Transferee company has filed its response to both the affidavits by filing two .....

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t. The Learned counsel for the petitioner has relied upon the proviso to Section 394(1) of the Act. It is submitted that the observations made by the Regional Director are, in fact, beyond the scope and ambit of the powers conferred on him under the proviso to Section 394(1) of the Act, in the matter pertaining to the sanction of the Scheme of Arrangement. It is further submitted that as the report does not contain any observation or remark to the effect that the affairs of the Company have been .....

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gard to the observation contained in Para 2(A)(1) of the first affidavit read with the contents of the further affidavit, it is submitted that this Company is engaged in carrying out the processing activity on job work basis. The scale of operations is small and therefore, this company is classified as MSME under Micro Small and Medium Enterprises Act, 2006. The nonreporting of these operations do not impact materially the reporting under the Directors report and there is no impact thereof on th .....

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first affidavit read with the contents of the further affidavit, it is submitted that the Company has issued a single class of equity shares which do not carry any special rights/ preferences/ restrictions. Accordingly, the question of mentioning any special qualifications does not arise. The Company, even otherwise, is a closely held private company. It has no public exposure. Accordingly, this observation is misconceived. (d) With regard to the observation contained in Para 2(A)(4) of the fir .....

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ce is being made by the Regional Director to Note no.21 and not Schedule21. The profit and loss account rightly describes the phrase Earning per Share . However, in Note no.21, through inadvertence, the phrase No. of Shares is mentioned. This error otherwise would have no bearing on the true and fair view of the financial statements of the Company. (f) With regard to the observation contained in Para 2(A)(6) of the first affidavit read with the contents of the further affidavit, It is submitted .....

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e) forming part of the Financial Statements. (h) With regard to the observation contained in Para 2(A)(8) of the first affidavit read with the contents of the further affidavit, It is submitted that the Company has not made provisions for deferred tax assets as there is no reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. As per AS22, deferred tax assets should be recognized and carried forward only to the extent .....

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ydrochem Private Limited, another Transferor Company are dealt with as under : (a) With regard to the observation contained in Para 2(B)(1) of the first affidavit read with the contents of the further affidavit, It is submitted that the Company has made necessary disclosures in Note no.5. Even otherwise, it is stated that during the year, the Company has been engaged only in the business of providing services and therefore, question of any reporting under the Conservation of Energy and Technolog .....

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is only mistake in recording the Note meant for the balance sheet under the Statement of Profit and Loss Account and viseversa. This error is purely through inadvertence and would have no impact on the true and fair view of the financial statements of the Company. (c) With regard to the observation contained in Para 2(B)(4) of the first affidavit read with the contents of the further affidavit, It is submitted that the Company has issued a single class of equity shares which do not carry any spe .....

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l in the provision is adjusted at the time of final determination. The shortfall is reduced from the surplus in the profit and loss account of the previous year. There is thus no reduction from the current year profit and loss account. This method and the method suggested by the Regional Director are different methods which are equally accepted as valid. (e) With regard to the observation contained in Para 2(B)(6) of the first affidavit read with the contents of the further affidavit, It is subm .....

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x assets as there is no reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. As per AS22, deferred tax assets should be recognized and carried forward only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. (g) With regard to the observation contained in Para 2(B)(8), 2(B)(9) and 2(B)(10) of the first affid .....

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aged in manufacturing of intermediates. The scale of operations are small and therefore, the Company is classified as MSME as MSME under Micro Small and Medium Enterprises Act, 2006. The Company is engaged in serving the export markets and earn about 70% of revenue through foreign exchange. As such, the nonreporting of the above operations do not impact materially the reporting under the Directors Report and there is no impact thereof on the financial statements as well as to the stake holders. .....

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ct on the true and fair view of the financial statements of the Company. (c) With regard to the observation contained in Para 2(C)(3) of the first affidavit read with the contents of the further affidavit, It is submitted that the Company has issued a single class of equity shares which do not carry any special rights/ preferences/ restrictions. Accordingly, the question of mentioning any special qualifications does not arise. The Company even otherwise is a closely held private company. It has .....

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he accounting principles. Without prejudice, the Note no.24 of the Profit and Loss Account does refer to the depreciation on revaluation portion. The Company has thus made the requisite disclosures. (e) With regard to the observation contained in Para 2(C)(5) of the first affidavit read with the contents of the further affidavit, It is submitted that the loans are in respect of the car loan and the office premises. The Company is a closely held Company and the disclosures suggested in the observ .....

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ported in Note no.22(A)(l). (g) With regard to the observation contained in Para 2(C)(7) of the first affidavit read with the contents of the further affidavit, It is submitted that AS17 has no application to this Company as this Company does not fall in any of the categories to which AS17 apply. (h) With regard to the observation contained in Para 2(C)(8) of the first affidavit read with the contents of the further affidavit, It is submitted that the amount shown in Note 22(e)(B) is concerning .....

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t the letter dated 1.12.2015, through inadvertence, contained the old address. As stated by the Regional Director, in response to the report of the Regional Director, the Company has already responded and clarified the position about the change of address of its registered office. (k) With regard to the observation contained in Para 2(E) of the first affidavit read with the contents of the further affidavit, it is submitted by the Ld Counsel on behalf of the petitioner that the report of the Reg .....

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ction proposed under section 391 to 394 of the Companies Act, 1956. In any case and without prejudice to the above, it is stated by the Ld. Counsel for the petitioner, under the instructions, that the petitioner company would undertake compliance of the Income Tax Act and the Rules made thereunder. (l) With regard to the observations contained in para 2(C) of the first affidavit read with further affidavit, it is submitted the appointed date proposed is 01.04.2014 and not 01.04.2013. Amitech Che .....

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r to the public interest. The Official Liquidator, however, has requested this Court to direct the petitioners to preserve their books of accounts, papers and records and not to dispose of the records without the prior permission of Central Government under Section 396A of the Companies Act, 1956. 14. Having heard Mr. Navin K. Pahwa, learned Counsel for the petitioner companies, Mr. Kshitij Amin, Learned Central Government Standing Counsel on behalf of Mr. Devang Vyas, Learned Assistant Solicito .....

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