Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (10) TMI 466 - GUJARAT HIGH COURT

2016 (10) TMI 466 - GUJARAT HIGH COURT - TM - Scheme of Arrangement in the nature of Demerger - Held that:- Considering all the facts and circumstances and taking into account all the contentions raised by the affidavits and reply affidavits, as satisfied that the observations made by the Regional Director, Ministry of Corporate Affairs, do not survive. As come to the conclusion that the present scheme of arrangement is in the interest of the shareholders and creditors of both the companies as w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ned Standing Counsel appearing for the Central Govt.The petitioner company is further directed to lodge a copy of this order alongwith the schedule of immovable assets of the Demerged Undertaking of the Demerged company as on the date of this order and the Scheme duly authenticated by the Registrar, High Court of Gujarat, with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty, if any, on the same within 60 days from the date of the order. - The Petitioner .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

S, ASSISTANT SOLICITOR GENERAL OF INDIA with MR KSHITIJ AMIN, CENTRAL GOVERNMENT COUNSEL COMMON ORAL JUDGMENT 1. These are the petitions filed by the petitioner companies for the purpose of obtaining the sanction of this court to a Scheme of Arrangement in the nature of Demerger and Transfer of the Demerged Undertaking, viz. Trading Undertaking of Priyal International Private Limited, the petitioner Demerged Company to Shroff Wholesome Living Farms Private Limited, the Resulting Company, as well .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rcial activities are clearly segregated between two undertakings viz. SEZ Undertaking situated at Sachin, Surat which is exclusively engaged in activities of jewellery and bullion. All other activities are undertaken under the Trading Undertaking. Whereas the Resulting Company , Shroff Wholesome Living Farms Private Limited is currently a dormant company. It has been realised that the activities undertaken by the two undertakings of the Demerged Company ae very distinct and require different str .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aking in its books of accounts. This being consequential in nature is proposed as an integral part of the proposed Scheme of Arrangement. 4. It has been submitted that vide order dated 28th June 2016 passed in Co. Appl. No. 285 of 2016, meetings of the Equity Shareholders of the Demerged Company was dispensed with since the approval to the scheme in form of written consents were obtained from all of them and the same were placed on record. There were no secured creditors of the petitioner Demerg .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, 1956 was dispensed with vide the aforesaid order dated 28th June 2016. 5. Similarly, in case of the Resulting Company, vide the order dated 28th June 2016, meetings of the Equity and Preference Shareholders were dispensed with in view of the written consent letters approving the scheme being placed on record. There were no Secured and/or Unsecured Creditors of the Resulting Company. 6. The substantive petitions for the sanction of the scheme were filed by the petitioner Companies and the same .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fidavit dated 5th October 2016. 7. Notice of the petition has been served upon the Central Govt. and Mr. Kshitij Amin appear for Shri Devang Vyas, learned Assistant Solicitor General appear for the Central Govt. An affidavit dt. 23rd September 2016 has been filed by Mr. Jatinder Kumar Jolly, the Regional Director, NorthWestern Region, Ministry of Corporate Affairs, whereby several observations are made. 8. The attention of this court is drawn to the Additional Affidavit dated 5th October 2016 fi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e vide Para 2(c) pertains to the compliance with Accounting Standard 14 for the accounting treatment in the books of the Resulting Company. It is observed by the Regional Director that the accounting treatment proposed under clause 9.2 and 9.6 are not in compliance with AS14. It has been clarified by the Petitioner Companies that AS14 is not applicable in case of the Demerger as proposed in the present scheme. Further Clause 9.2 proposes the adjustment of the value of the demerged undertaking in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Securities Premium Account for the adjustment of the net asset value of the Demerged Undertaking is not permissible under Section 52 of the Companies Act, 2013. In this regard, reliance has been placed on the decision of Gujarat High Court in case of Asahi Songwon (194 Company cases 450) Vide the said decision, it is specifically held that Under the provisions of Section 78 read with Sections 100 to 103 of the Companies Act, 1956, such utilisation of Securities Premium Account is permitted. It .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

100 to 103 of the Companies Act, 1956 by following the requisite procedure. Accordingly, the petitioner company has envisaged such restructure and has sought the sanction of the Honourable court for the same. Further, the Regional Director has sought undertaking from the petitioner with regard to the utilisation of the Reserve in the books of the Resulting Company. It is respectfully submitted that the said issue is already concluded by the Division Bench judgment of this Court in the case of Ad .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion of the Scheme shall be submitted as Schedule with the final order. (v) The observation of the Regional Director made vide para 2(e) pertains to the letter dated 1st September 2016 sent by the Regional Director to the Income Tax Department to invite their objections, if any. No reply has been received in this regard and since the statutory period of 15 days as envisaged by the relevant circular of the Ministry of Corporate Affairs is over, it can be presumed that the Income Tax dept. has no o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eholders and public interest, the scheme deserves to be sanctioned. 9. Considering all the facts and circumstances and taking into account all the contentions raised by the affidavits and reply affidavits, reliance placed on the decisions of Gujarat High Court and the submissions during the course of hearing, 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 arrangement is in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version