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2016 (10) TMI 465 - GUJARAT HIGH COURT

2016 (10) TMI 465 - GUJARAT HIGH COURT - TM - Scheme of Arrangement in the nature of Amalgamation - Held that:- This Court is of the view that the observations 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 in the nature of Amalgamation is in the interest of the Shareholders an .....

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ited and prayers made in terms of Paragraph Nos. 17(a) and 17(b) as well as the Minutes under Section 103(1) of the Companies Act, 1956 in terms of Paragraph 14 of the Company Petition No. 379 of 2016 for the Transferee Company viz. INI Design Studio Limited are hereby granted. - COMPANY PETITION NO. 378 of 2016 In COMPANY APPLICATION NO. 377 of 2016 With COMPANY PETITION NO. 379 of 2016 In COMPANY APPLICATION NO. 378 of 2016 - Dated:- 7-10-2016 - MR. R.M.CHHAYA, J. FOR THE PETITIONER : MR TUSHA .....

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Transferor Company and INI Design Studio Private Limited viz. the Transferee Company and Restructure of Capital of INI Design Studio Private Limited proposed under Sections 391 to 394 read with Sections 100 to 103 of the Companies Act, 1956. 2. Both the petitions being necessarily interconnected, they were heard together and are considered simultaneously by this common order. 3. Ms. Vaibhavi Parikh, learned advocate for the petitioner companies submitted that INI Design Services Private Limited .....

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th the Companies belong to the same group of management, the Board of Directors of these Companies thought it fit to amalgamate them for achieving synergic advantages. To streamline the current organization structure and to realize commercial synergies, the Board of Directors of both the Companies is desirous of merging INI Design Services Private Limited into INI Design Studio Private Limited. The rationale, which led the management of both the Companies to decide for amalgamation lies in sever .....

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simplification of structure and operations. Consequently, amalgamation shall provide good opportunity for growth to both the Companies and a competitive edge over others. Thus, it is perceived that the proposed merger shall be advantageous and beneficial in more than one way to the Companies, their shareholders and creditors. 5. It has been pointed that vide an order dated 16th August, 2016 passed in Company Application No. 377 of 2016, filed by INI Design Services Private Limited, the Transfer .....

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led by INI Design Studio Private Limited, the Transferee Company, the meeting of the Equity Shareholders of the Company were dispensed with in view of the written consent letters from all its shareholders, approving the proposed scheme and confirmation of the same by the certified Chartered Accountant, being placed on record. The meetings of the Creditors of the Transferee Company were dispensed with, accepting the contention that rights and interests of these Creditors are not being adversely a .....

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such reduction. It has been submitted that the reduction of Equity Share Capital does not involve either diminution of liability in respect of unpaid share capital or payment to any shareholder of any paidup share capital. Further it is also pointed out that approval granted to the present scheme by the Equity Shareholders of the Transferee Company, in form of the consent letters shall be treated as the Special Resolution as required under Section 100 of the Companies Act, 1956. In view of the .....

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s on 9th September, 2016, and the publication in the Government Gazette was dispensed with as directed in the said orders. Affidavit dated 14th September, 2016 confirms the same. Pursuant to the said publication in the newspapers, no objections were received either by the petitioners or its advocates. The said fact has been confirmed vide an additional affidavit dated 5th October, 2016. 9. Notice of the petition of INI Design Services Private Limited viz. the Transferor Company was served upon t .....

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the provision of Section 396(a) of the Companies Act, 1956. The Official Liquidator has requested that the Transferor Company may ensure statutory compliance of all applicable laws and shall not be absolved from any of its statutory liability. It has been assured by the Transferor Company vide its additional affidavit dated 5th October, 2016 that the Transferor Company shall preserve its books of accounts, papers and records and shall not dispose off without the prior permission of the Central .....

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of the Central Government. An affidavit dated 28th September, 2016 has been filed by Shri Jatinder Kumar Jolly, the Regional Director, Ministry of Corporate Affairs, NorthWestern Region. In that common affidavit, the said authority made certain comments and observations. 11. The attention of this court is drawn to the Additional Affidavit dated 5th October, 2016, filed by Shri Pradip Sheth, Director of both the Companies, whereby the observations raised by the Regional Director have been dealt .....

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sign Studio Private Limited viz. the Transferee Company on the MCA website pursuant to the transfer of the equity shares of the Transferee Company that were held by a Foreign Company as on 1st October, 2015 which got transferred to the Transferor Company, a LLP and an Individual between the period 1st October, 2015 and 16th September, 2016. In response to the said observation, the learned counsel for the Petitioner Companies submitted that the Transferee Company viz. INI Design Studio Private Li .....

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ire transfer of the shareholding by a Foreign Company in favour of the Transferor Company viz. INI Design Services Private Limited has the approval of Reserve Bank of India as per Foreign Exchange Management Act, 1999. In response to the said observation, the learned counsel for the Petitioner Companies submitted that the purchase of shares of the Transferee Company viz. INI Design Studio Private Limited from a Foreign Company by the Transferor Company viz. INI Design Services Private Limited is .....

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Limited from a Foreign Company is in accordance with the FEMA Regulations and RBI Guidelines. In view of the same, said observation of the Regional Director does not survive and no directions are required to be issued. (iv) The observation of the Regional Director made vide paragraph no. 2(e) pertains to the circular dated 15th January, 2014 issued by Ministry of Corporate Affairs with respect to inviting objections, if any from the Income Tax Department. A letter dated 12th September, 2016 was .....

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ules, 1962. In view of the same, no further directions are required to be issued to the Petitioner Companies in this regard. (v) Vide observation made in paragraph no. 2(f), it has been observed by the Regional Director there are no complaints against the Petitioner Companies including any complaint/representation against the Scheme of Amalgamation. (vi) It has also been observed by the Regional Director vide paragraph no. 2(g) that the proposed Scheme of Amalgamation is not prejudicial to the i .....

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is of the view that based on the material on record it can be concluded that the present Scheme of Arrangement in the nature 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. The Reduction of Issued, Subscribed and Paid up share capital of the Transferee Company viz. INI Design Studio Private Limited as envisaged under Clauses 5 and 7 o .....

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