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2016 (7) TMI 343 - GUJARAT HIGH COURT

2016 (7) TMI 343 - GUJARAT HIGH COURT - TMI - Composite Scheme of Arrangement involving Demerger and Transfer of Two Demerged/ Transferor companies to the Resulting Company - Held that:- The present Composite Scheme of Arrangement is in the interest of its shareholders and creditors as well as in the public interest and the same deserves to be sanctioned. The Scheme is hereby sanctioned. - COMPANY PETITION NO. 190 of 2016 In COMPANY APPLICATION NO. 152 of 2016 TO COMPANY PETITION NO. 224 of 2016 .....

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z. Mas Chemicals Industries Private Limited, Samurai Holdings Private Limited to the Resulting Company viz. Arris Estates Private Limited and Demerger and Transfer of Portfolio Investment Undertakings of Four Demerged/ Transferor companies viz. Akshar Estates Private Limited, Bar Magnet Investment Private Limited, Mas Chemicals Industries Private Limited, Samurai Holdings Private Limited to Resulting Company viz. Opel Securities Private Limited, Amalgamation of the Residue Undertakings of the Fo .....

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ivate Limited, Croma Financial Services Private Limited, Denis Trades And Investments Private Limited, Epistyle Propcon Private Limited, Euroknit International Limited, Fillet Realty Private Limited, Fuji Finance Private Limited, Gabriel Trading Private Limited, Gama Fabric Sales Private Limited, Khadayata Decor Limited, Lovely Consultants Private Limited, Parpen Propcon Private Limited, Pratham Textiles Private Limited, Quilon Chemicals Private Limited, Saumya Textiles Private Limited, Stolon F .....

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Directors of these Companies thought it appropriate to propose a Composite Scheme whereby overall restructure of the business of all these companies is envisaged. This involves streamlining in accordance with the activities, minimizing the number of entities in order to avoid duplication of operative and administrative costs and amalgamate them for synergic benefits. The petitions provide the details of the benefits envisaged due to the proposed Composite Scheme. 3. It has been submitted that v .....

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Secured Creditor and hence dispensation of the meeting of the creditors was granted vide the abovereferred order. It has been pointed out that in case of four demerged companies, proposing the restructure of Capital in form of the Utilisation of Securities Premium Account, dispensation was granted from the procedure prescribed under Section 101(2) of the Companies Act, 1956 as well as the procedure prescribed under rule 48 to 65 of the Companies (Court) Rules 1959. 4. In case of the Transferee C .....

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ertaken in compliance with the contractual terms with the said Secured Creditor, his approval shall be obtained and placed on record before the final sanction of the Scheme. The said consent letter of the sole Secured creditor was placed on record alongwith the Petition. Vide a further order dated 22nd June 2016, passed in the Company Application No. 278 of 2016, the meeting of the Preference Shareholders of the Transferee was dispensed with as the consent letters of the sole Preference Sharehol .....

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Affidavits dt. 7th June 2016 and/or 8th June 2016 confirm the same. No one has come forward with any objections to the said petitions even after the publication and the same has been further confirmed by the common additional affidavit dated 28th June 2016. 6. Notice of the petitions has been served upon the Office of the Official Liquidator for the Transferor companies. The reports dated 27th June 2016 have been filed by the Official Liquidator after taking into account the respective reports o .....

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to preserve the books of accounts, papers and records and not to dispose of the same without prior permission of the Central Govt. as per the provisions of Section 396 (A) of the Companies Act, 1956. Accordingly, the Transferee Company is hereby directed to preserve the books of accounts, papers and records of all the Transferor Companies and not to dispose of the same without prior permission of the Central Govt. It is hereby further directed that even after the scheme is sanctioned, the Transf .....

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by some observations are made. 8. The attention of this Court is drawn to the Additional Affidavit dated 28th June 2016 filed by Mr. Sankalchand G. Patel, the Director and Authorised Signatory of the Petitioner Transferee Company, whereby all the above issues have been dealt with. I have further heard submissions made by the learned counsel appearing for the Central Govt. and Mrs. Swati Soparkar, learned advocate appearing for the petitioners as follows: (i) It has been submitted that observatio .....

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Divisional Balance Sheets of the Demerged Companies clearly indicating the assets and liabilities of the respective Demerged Undertakings being transferred to respective Resulting Companies as well as the Residue Undertakings being amalgamated with the Transferee Company as Exhibit B1 to the respective petitions. In view of the same, it will not be necessary to issue any further directions in this regard. (iii)The observation of the Regional Director made vide para 2(d) pertains to the proposed .....

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where the undertakings are being transferred under the Demerger proposal of the scheme, where AS14 is not applicable. However, Clause 32.5 pertains to the undertakings being transferred under the proposed Amalgamation. It has been further submitted that as per settled legal position by several decisions of various High Courts, including the Gujarat High Court, the petitioner has undertaken that in case of deviation from the aforesaid accounting standard or practice, the Resulting Companies as w .....

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t necessary. (iv) The observation made vide para 2(e) of the said affidavit pertains to the absence of the working sheets for calculation of Share Exchange Ratio as worked out by M/s. R. Chaudhary Associates, Chartered Accountants. It has been pointed out on behalf of the petitioner that all the companies involved in the proposed Scheme are either private limited companies or closely held limited companies and all of them belong to the same group of management. The shares of all the companies ar .....

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g Company2. It has been observed by the Regional Director that since the company is registered with RBI as NBFC, copy of NOC from RBI should be submitted and further the petitioner company be directed to comply with the guidelines issued by RBI. In this regard, it has been submitted by the Petitioner that under the applicable RBI guidelines, the prior approval to the Scheme is not required. It has been undertaken on behalf of the Resulting Company2 that upon Scheme being effective it shall compl .....

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e petitioner company has already initiated the process to update the information on MCA portal. (vii)The observation made vide para 2(h) pertains to the approval of the Preference Shareholders of the Transferee Company by convening a meeting. As recorded hereinabove, the dispensation of such meeting of the sole Preference Shareholder of the Petitioner Transferee Company was sought and has been granted vide an order dated 22nd June 2016. (viii)The observation of the Regional Director made vide pa .....

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s. In view of the same, no further directions are required to be issued to the petitioner company in this regard. (ix) It has been further submitted that there are no complaints received by the Registrar of Companies as confirmed by para 2 (j). The Regional Director has vide the observation 2 (k) confirmed that it has no other objection except the above. 9. Considering all the facts and circumstances and taking into account all the contentions raised by the affidavits and reply affidavits, under .....

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