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2016 (6) TMI 857 - GUJARAT HIGH COURT

2016 (6) TMI 857 - GUJARAT HIGH COURT - TMI - Scheme of amalgamation - Held that:- This court is of the view that based on the material on record it can be concluded that the present scheme of arrangement is in the interest of the shareholders and creditors of both the companies as well as in the public interest, therefore, the same deserves to be sanctioned and the same is hereby sanctioned. - COMPANY PETITION NO. 107 of 2016 In COMPANY APPLICATION NO. 56 of 2016 With COMPANY PETITION NO. 108 o .....

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oposed under section 391 to 394 of the Companies Act, 1956. 2. It has been submitted that both the companies are engaged in similar commercial activities viz. manufacturing and marketing a wide range of ceramic and glazed tiles. These companies are also engaged in trading as well as export of the said products. The present scheme of arrangement is proposed for synergic benefits arising out of consolidation of activities, integration of resources and reduction in administrative and operative cost .....

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ed that vide order dated 15th February 2016 passed in Company Application No. 56 of 2016, meeting of the Equity Shareholders of the Transferor Company was dispensed with in light of the consent letters of all the shareholders placed on record. The meetings of the Secured Creditors and Unsecured creditors of the Transferor Company were directed to be convened in order to obtain their approval to the proposed scheme. Pursuant to the directions, issued with regard to the conduct of the meetings, af .....

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. 5. It has been submitted that vide order dated 15th February 2016 passed in Company Application No. 55 of 2016, meeting of the Unsecured Creditors of the Petitioner Transferee Company was dispensed with in light of the substantially high positive net worth of the Transferee Company, as certified by a Chartered Accountant. The contention of the said petitioner company that the rights and interests of the unsecured creditors of the Transferee Company are not prejudicially affected as a result of .....

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eetings were duly convened on 18th March 2016. The proposed Scheme of Arrangement was duly approved unanimously i.e. 100% in number and 100% in value at the respective meetings of the Equity Shareholders and secured creditors of the Transferee Company. The result of these meetings had been placed on record in form of Chairman s reports dated 30th March 2016. 7. Further, the attention of the court was drawn to Para 10 of the Petition. It was submitted that the Transferee company was not required .....

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copies of the same were also placed on record as Exhibit F to the said petition. 8. The substantive petitions for the sanction of the scheme were filed by the petitioner companies which were admitted on 7th April 2016. The notice for the hearing of the petitions were duly advertised in Ahmedabad editions of English dailies Indian Express and Financial Express and Gujarati daily Divya Bhaskar dated 20th April 2016. Affidavits dated 28th April 2016 confirm the same. The publication in the Governme .....

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artered Accountant appointed by him out of the panel. It has been observed by the Official Liquidator that the affairs of the Transferor Company have been conducted within its object clauses and it has not been conducted in any manner prejudicial to the interest of the members or public interest, hence the petitioner transferor company may be dissolved without following the process of winding up. However, the Official Liquidator has sought directions to be issued to preserve the books of account .....

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applicable provisions of law and shall not be absolved from any of its statutory liability. 10. Notice of the petitions have been served upon the Central Govt. and Mr. Kshitij Amin, learned Central Government Standing Counsel has appeared for Shri Devang Vyas, learned Assistant Solicitor General of India, on behalf of Central Govt. A common affidavit dt. 20th May 2016 has been filed by Mr. Shambhu Kumar Agarwal, the Regional Director, North-Western Region, Ministry of Corporate Affairs, whereby .....

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para 2(a) and (b) are factual statements and do not require any response. (ii) Vide Para 2(c) of the affidavit, it has been observed by the Regional Director that the Transferee Company, being a listed public limited company, and pursuant to the Observation letters from the Bombay Stock Exchange and National Stock Exchange, issued on 15th January 2016, the Petitioner Company is required to comply with applicable provisions of the SEBI Circulars. In this regard, it has been submitted that the pet .....

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ompany had already submitted the requisite Undertaking and the Auditor s certificate to the SEBI, copies of which are also placed on record as referred earlier. (iii)The observation of the Regional Director vide Para 2(d) of the affidavit pertains to compliance with FEMA and RBI Guidelines as a small part of the Equity Share Capital of the Transferee Company is held by FIIs/NRIs. In this regard, it has been submitted that the Transferee Company is not required to obtain any prior approval from t .....

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the proposed Accounting Treatment does not specifically mention the name or type of Reserves for such treatment and that directions should be issued in this regard. In this connection, it has been pointed out that vide clause 11.1 (a), it has already been specified that the Transferee Company shall account for amalgamation in accordance with Accounting Standard14. Further, the Regional Director has sought an undertaking that reserves so created, if any, shall not be available for distribution o .....

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April 2016 sent by the Regional Director to the Income Tax Department to invite their objections, if any. Since no response has been received from the said Department in the prescribed time, it can be presumed that there are no objections. Further, the petitioner companies have agreed to comply with the applicable provisions of the Income Tax Act and rules. (vi)It has been further submitted that there are no complaints received by the Registrar of Companies as confirmed by para 2 (g). The Region .....

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ations made by the Regional Director, Ministry of Corporate Affairs, do not survive. No directions are required to be issued to the petitioner companies. This court is of the view that based on the material on record it can be concluded that the present scheme of arrangement is in the interest of the shareholders and creditors of both the companies as well as in the public interest, therefore, the same deserves to be sanctioned and the same is hereby sanctioned. Prayers in terms of paragraph 21 .....

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