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2016 (7) TMI 33 - GUJARAT HIGH COURT

2016 (7) TMI 33 - GUJARAT HIGH COURT - TMI - Scheme of Amalgamation - Held that:- This court is of the view that that the observations made by the Regional Director, Ministry of Corporate Affairs, have been addressed satisfactorily and hence 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 Amalgamation is in the interest of the shareholders and credito .....

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MENT 1. These petitions are filed by two companies for the purpose of obtaining the sanction of this court to a Scheme of Amalgamation of Advanta Limited, the Petitioner Transferor Company with UPL Limited, the Petitioner Transferee Company, proposed under section 391 to 394 of the Companies Act, 1956. 2. It has been submitted that both the companies operate in same line of business, viz. Agriculture Sector, and are engaged in commercial activities which are complimentary to each other. The Tran .....

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e entity. The petitions provide the details of anticipated benefits as a result of the said scheme. 3. It has been further pointed out that both the Petitioner Companies are listed public limited companies and the shares are listed on BSE Limited and NSE Limited. In compliance with clause 24 (f) of the listing agreement, and in compliance with the requirements vide SEBI circulars, the Petitioner Company had already approached the concerned stock exchanges, and the approvals/clearances obtained f .....

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vice of individual notices to all the Equity Shareholders of the Petitioner Company in both the categories as well as the public notice, the said meetings were duly convened on 30th March 2016. The proposed Scheme of Amalgamation was duly approved unanimously i.e. 100% in number and 100% in value at the respective meetings of the Equity Shareholders of the Transferor Company in each category. The result of these meetings had been placed on record in form of Chairman s reports dated 9th April 201 .....

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red Creditors and Unsecured creditors of the Transferor Company were dispensed with, in view of the submission that their rights and interests are not likely to be prejudicially affected as a result of the Scheme. It was submitted by the Petitioner Companies that both the companies are profit making companies with substantially positive net worth. The net worth certificates issued by Chartered Accountant for the Petitioner Transferor Company as on 31st March 2015 as well as for the Transferee Co .....

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as now placed consent letters from all its Secured Lenders alongwith the affidavit dated 14th June 2016. 6. In case of the Transferee Company vide the order dated 17th February 2016 passed in Company Application No. 66 of 2016, meeting of the Equity Shareholders of the Transferee Company was directed to be convened for the purpose of obtaining their approval to the proposed Scheme. Pursuant to the directions, issued with regard to the conduct of the meeting, after the due service of individual n .....

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ines vide the applicable circulars, the Company also obtained the requisite approval from its Public Shareholders by following the requisite procedure for evoting and Postal Ballot. The scheme was duly approved by majority of 99.27% of the total valid votes. The said result also has been placed on record vide the abovereferred Chairman s report. 7. It has been submitted that vide the said order dated 17th February 2016 passed in Company Application No. 66 of 2016, meetings of the Secured Credito .....

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are placed on record confirm the same. In light of the same meetings of the Secured and Unsecured creditors of the Transferee Company were dispensed with. 8. The substantive petitions for the sanction of the scheme were filed by the petitioner companies which were admitted on 22nd April 2016. The notice for the hearing of the petitions were duly advertised in Ahmedabad and Vadodara editions of English daily Indian Express and all Gujarat editions of Gujarati daily Sandesh dated 16th May 2016. Af .....

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filed by the Official Liquidator after taking into account the report of the Chartered 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 Officia .....

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after the scheme is sanctioned, the Transferor company shall comply with all the applicable provisions of law and shall not be absolved from any of its statutory liability. Further, vide Para 13 of the report, the Official Liquidator has pointed out that Clause 12 (a) of the Scheme envisages only all Permanent employees of the Transferor Company to become the employees of the Transferee Company, upon Scheme being effective. It has been observed that the Scheme should be made applicable to all th .....

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, the said prayer is hereby granted to amend the scheme to this limited extent. 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. 1st June 2016 has been filed by Mr. Shambhu Kumar Agarwal, the Regional Director, NorthWestern Region, Ministry of Corporate Affairs, whereby some observat .....

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factual statements and do not require any response. (ii) Vide Para 2(d) of the affidavit, it has been observed by the Regional Director that both the Petitioner Companies being the listed companies, and pursuant to the Observation letters from the Bombay Stock Exchange and National Stock Exchange, issued on 4th February 2016 and 3rd February 2016 respectively, the Petitioner Company is required to comply with applicable provisions of the SEBI Circulars viz. CIR/CFD/DIL/5/2013 dated 4th February .....

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btaining clearance from SEBI. It has been further submitted that the Petitioner Companies have already complied with the requisite provisions. Both the Petitioner Companies, being listed companies were required to obtain the approval of the public shareholders through Postal Ballot and Evoting as envisaged under Clause 5.16(a) of the above referred SEBI circulars. Both the Petitioner Companies had undertaken the independent procedure for obtaining the same from its Public Shareholders in additio .....

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circulars, upon Scheme being sanctioned and in view of this, no further directions are required to be issued in this regard. (iii)The observation of the Regional Director vide Para 2(e) of the affidavit pertains to shareholding in both the Petitioner Companies by foreign shareholders and compliances with the provisions of FEMA and RBI guidelines. In this regard, it has been submitted that the details of the foreign shareholding are factual and no response is required for that. It has been furth .....

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of the same, it is not necessary to issue any further directions to the Petitioners Companies. (iv) The observation made vide Para 2(f) pertains to obtaining approval from regulatory body for business of agriculture and chemicals. In this regard, it has been submitted that both the Petitioner Companies had obtained the requisite approvals/licenses required to conduct their business activities relating to seeds and agrochemicals. However, upon Scheme being effective, the Transferee Company shall .....

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om 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 (h). The Regional Director has vide the observation 2 (i) confirmed that it has no other objection except the above and further confirmed that the proposed Sc .....

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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 Amalgamation 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. 13. Prayers in terms of paragraph 23(a) of the Company Petition No.127 of 2016, and paragraph 22 (a) of the Company Petition No.12 .....

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