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2016 (7) TMI 437 - GUJARAT HIGH COURT

2016 (7) TMI 437 - GUJARAT HIGH COURT - TMI - Scheme of Amalgamation is in the interest of its shareholders and creditors as well as in the public interest and the same deserves to be sanctioned and the same is hereby sanctioned. - COMPANY PETITION NO. 180 of 2016 In COMPANY APPLICATION NO. 201 of 2016 With COMPANY PETITION NO. 181 of 2016 In COMPANY APPLICATION NO. 211 of 2016 - Dated:- 1-7-2016 - MR. R.M.CHHAYA, J. FOR THE PETITIONER : MRS SWATI SOPARKAR, ADVOCATE FOR THE RESPONDENT : MR DEVAN .....

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hich are similar in nature, viz. manufacturing and marketing aromatic chemicals. The Board of Directors of both the companies thought it appropriate to amalgamate them for synergic benefits. It is envisaged that consolidation of their activities shall be beneficial for rapid growth of operations of the Transferee Company. The petitions provide the details of the benefits envisaged out of the proposed Scheme. 3. It has been submitted that vide order dated 28th April 2016 passed in Co. Application .....

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ng companies with substantially high positive net worth. However, in compliance with the contractual terms with its Secured lenders, the Company had undertaken to place on record the approval from all of them before the final sanction of the Scheme. The said approvals from the Secured Lenders has been placed on record with the Additional Affidavit dated 24th June 2016. 4. Similarly, vide the order dated 28th April 2016 passed in Company Application No.211 of 2016, the meetings of the Equity Shar .....

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the Transferee Company in the Post Scheme scenario shall also be sufficient to safeguard the interests of the creditors of both the companies. However, in compliance with the contractual terms with its Secured lenders, the Company had undertaken to place on record the approval from all of them before the final sanction of the Scheme. The said approvals from the Secured Lenders has been placed on record with the Additional Affidavit dated 24th June 2016. 5. The substantive petitions for the sanct .....

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the publication and the same has been further confirmed by the additional affidavit dated 24th June 2016. 6. Notice of the petition has been served upon the Office of the Official Liquidator for the Transferor company. The report dated 22nd June 2016 has been 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 conduc .....

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ct, 1956. Accordingly, the Transferee Company is hereby directed to preserve the books of accounts, papers and records of the Transferor Company 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 Transferor Company shall comply with all the applicable provisions of law and shall not be absolved from any of its statutory liabilities. 7. Notice of the petitions have been served upon the Central Go .....

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ory of the Petitioner Companies, whereby the said 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 observations made vide para 2(a) and (b) are factual statements and do not require any response. (ii) The observation of the Regional Director made vide para 2(c) pertains to an inadvertent error with regard to the .....

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dance with the Accounting Principles and the excess of assets over liabilities cannot be credited to General Reserve Account and has to be treated as Capital Reserve Account/ Amalgamation Reserve Account. In this regard, it has been submitted that vide Clause 11 (a) of the Scheme, the petitioner has confirmed that the Accounting Treatment shall be in compliance with AS-14. The petitioner has further undertaken that in case of any deviation from the same, the Transferee Company shall make requisi .....

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de vide para 2(e) pertains to the letter dated 25th May 2016 sent by the Regional Director to the Income Tax Department to invite their objections, if any. Since no reply is received from the said department Within the statutory period of 15 days as envisaged by the relevant circular of the Ministry of Corporate Affairs, it can be presumed that the Income Tax dept., has no objection to the proposed scheme of arrangement. The petitioner companies have agreed to comply with the applicable provisio .....

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at large. 9. Considering all the facts and circumstances and taking into account all the contentions raised by the affidavits and reply affidavits, undertakings provided vide the additional affidavit dated 24th June 2016, I am satisfied that the observations made by the Regional Director, Ministry of Corporate Affairs, do not survive. I have come to the conclusion that the present Scheme of Amalgamation is in the interest of its shareholders and creditors as well as in the public interest and th .....

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