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IN RE : BODAL AGROTECH LIMITED

2016 (11) TMI 1260 - GUJARAT HIGH COURT

Scheme of Amalgamation - Held that:- Taking into account the contentions raised in the affidavits and counter affidavits and the undertakings given vide the additional affidavit dated 20th October, 2016, and the submissions advanced, the observations made by the Regional Director, Ministry of Corporate Affairs, no longer survive. It appears from the material on record that the Scheme of amalgamation would be in the interest of its shareholders and creditors as well as in the public interest, the .....

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he Transferor Company with Bodal Chemicals Limited, the Transferee Company; proposed under Section 391 to 394 of the Companies Act, 1956. 2. It has been submitted that Bodal Agrotech Limited, the petitioner Transferor Company is a wholly owned subsidiary of Bodal Chemicals Limited, the Transferee Company. The Transferor Company was originally promoted with the objective of manufacturing as well as trading in all kinds of agricultural equipments, fertilizers, pesticides and plant protection chemi .....

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and dividend paying company. The Board of Directors of these Companies thought it fit to amalgamate them for synergic benefits. It is envisaged that the amalgamation shall be beneficial for rapid growth and expansion and achieve greater administrative efficiency and reduction in administrative and operational cost. The petitions provide the details of the benefits envisaged from the proposed Scheme. 3. It has been further pointed out that the Transferee Company being a listed Company, pursuant t .....

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reholders and Unsecured Creditors of the Transferor Company were dispensed with in view of the written consent letters from all of them, approving the proposed scheme, being placed on record. There are no Secured Creditors of the Transferor Company. 5. In case of the Transferee Company, dispensation of the separate proceedings was sought based on the contention that the Transferee Company being the sole holding company of the Transferor Company, no shares were proposed to be issued towards consi .....

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net worth of the Transferee Company, in both the prescheme and postscheme scenarios, as substantiated by a certificate from the Chartered Accountant that is placed on record, the rights and interests of the creditors of the Transferee Company shall not be prejudicially affected. The Transferee Company had also undertaken that in compliance with the contractual terms of the loan agreements with its secured lenders, their approval to the Scheme in the form of written consent letters shall be obta .....

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d editions of 8th August, 2016 and the publication in the Government gazette was dispensed with as directed in the said order. Affidavit dated 19th August, 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 additional affidavit dated 20th August, 2016. 7. Notice of the petition has been served upon the Office of the Official Liquidator for the Transferor Company. The report dated 6th S .....

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g up. However, the Official Liquidator has sought directions to be issued to preserve the books of accounts, papers and records and not to dispose of the same without prior permission of the Central Government 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 the Transferor Company and not to dispose of the same without prior permission of the Central Government. It i .....

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d by Mr. Jatinder Kumar Jolly, the Regional Director, NorthWestern Region, Ministry of Corporate Affairs, whereby some observations are made. 9. The attention of this Court is drawn to the Additional Affidavit dated 20th October, 2016 filed by Mr. Ankit S. Patel, the Director and authorized signatory of the petitioner Company, whereby all the above issues have been dealt with. This Court further heard submissions made by the learned counsel appearing for the Central Government and Mr. Bandish So .....

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he concerned Stock Exchanges, viz BSE and NSE, and obtained the requisite observation letters from the said exchanges However, under the SEBI circulars dated 4th February, 2013 and 21st May, 2013, the approval from SEBI has to be obtained. In this regard, it has been submitted that the said Transferee Company was required to obtain SEBI approval through the Stock Exchanges only and the said exchanges have actually Standard14. In this regard, it has been submitted that perusal of Clause 9(i), mak .....

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t, 2013, also provides that if the practice adopted for such accounting entry, varies from the said standard, necessary disclosure should be made in the first financial statements of the Transferee Company. The said issue is already settled 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 Transferee Company shall make necessary disclosures in its first fin .....

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ving considered the submissions and the ratio of the said decision, this Court is of the opinion that it is not necessary to issue any such direction or impose such a condition on the petitioner Company to restrict the distribution of dividend out of such Reserves. (vi) The next observation made vide para 2(g) pertains to the letter dated 11th August, 2016 sent to the Income Tax Department to invite their objections, if any. Since no reply is received from the said department within the statutor .....

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para 2(h); The Regional Director has vide the observation 2(i) confirmed that the Scheme is not prejudicial to the interest of the shareholders of the petitioner company at large. 10. The attention of the Court is drawn to the compliance of the undertaking given by the Transferee Company for submission of the written consent from its Secured Lenders before the final sanction of the Scheme. The same has been placed on record along with the certificate from the Chartered Accountant with the Addit .....

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