TMI Blog2018 (5) TMI 2002X X X X Extracts X X X X X X X X Extracts X X X X ..... m received on those shares shall be transferred to a securities premium account . Thus there is no bar that the issues of shares at a premium or otherwise than cash also be resorted to by the company. It is the prerogative of the company to issue shares at a premium or otherwise depending upon the facts and circumstances of the situation. In the present case the shares are being issued by the transferee company to the transferor company for acquiring the assets of the company. If the fair value of the assets being acquired by the transferee company is more than the face value of the shares issued for the same, the company has no other alternative but to allot the shares at premium and the difference being carried to a securities premium account - in the present case, the compliance of Section 232(3)(i) has been made. The Tribunal s observations for not sanctioning the scheme cannot be agreed upon - appeal allowed. - COMPANY APPEAL(AT) NO.60 OF 2018 - - - Dated:- 3-5-2018 - Justice A.I.S. Cheema Member (Judicial) And Mr. Balvinder Singh Member (Technical For the Appellant : Mr Praveen K. Mittal, Advocate For the Respondents : None JUDGMENT BALVINDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lished Newspaper advertisement of the Notice of Petition in English Daily and Telugu Daily and filed the proof of the same. 03.The appellants filed a joint petition for sanction of the Scheme of amalgamation between them and their respective shareholders. The Scheme of Amalgamation provides that the transferee company shall, without any further act or deed, issue and allot to each member of the transferor company whose name is recorded in the register of members of the Transferor Company on the Record Date, equity shares in the Transferee Company in the ratio of 136 equity shares in the Transferee Company of the face value of ₹ 10/- at a premium of ₹ 26/- each credited as fully paid up for every 100 equity shares of ₹ 10/- each fully paid up held by such member in the transferor company. Notice was issued to the Regional Director (South East Region), Ministry of corporate Affairs, ROC concerned, Official Liquidator and jurisdictional Income Tax Authorities. The Official Liquidator submitted his report dated 10.7.2017 stating that the transferor company has not submitted consent of Trade Payables and other creditors for the proposed Scheme of amalgamation and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petitioner Companies are directed to issue newspaper publication with respect to status of Scheme of Amalgamation in the same newspapers in which previous publications were issued in order to ensure transparency/dissemination of complete information to all concerned parties about the same of the Scheme filed with the Tribunal. 15. The Petitioner Companies are directed to serve a copy of this order on the Registrar of Companies within 30 days from the date of receipt of copy of this order. 16. The Petitioner Companies are further directed o strictly adhere to the above directions and liberty is granted to the Petitioner Companies to approach the Tribunal after complying with all the applicable provisions of the Companies Act, 2013. 07.Being aggrieved by the said impugned order the appellants have filed the present appeal. The appellants have sought the following relief: a) Set aside the impugned order dated 05.01.2018 passed by the learned Tribunal in CP (CAA) No.98/230/HDB/2017. b) To hold that the appellant companies shall not be required to issue newspaper publications with respect to the status of Scheme of Amalgamation as required under the impugned o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f) Heritage Foods Retail Ltd and Future Retail Ltd g) Trident Corporation Ltd and Trident Ltd 12.Learned counsel for the appellants further argued that the Companies Act, 2013 does not make any distinction between the listed company and the private company. The Act is applicable to all the companies whether public or private which are registered under the Companies Act, 1956/Companies Act, 2013. Therefore, the findings of the Tribunal that these judgements are not applicable in the case of private companies is not acceptable. 13.Lastly the learned counsel of the appellants drew our attention towards the judgement pronounced by the Hon ble Supreme Court in the case of Miheer H. Mafatlal Vs Mafatlal Industries Ltd (AIR 1997 SC 506) and argued that the appellants have followed the procedure for the purposes of the Scheme and have complied with all requirements as laid down by the Hon ble Supreme Court in the above judgement and argued that the Tribunal did not have any further jurisdiction to sit in appeal over the commercial wisdom of the proposed Scheme and rejected the sanction of Scheme merely upon unfounded belief that there are not specific provisions providin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allot the shares at premium and the difference being carried to a securities premium account . This is what precisely the company has proposed to do. 19.The certificate as required under Section 232(3)(i) of the Companies Act, 2013 from the company s auditor is annexed at Page No.292 of the Appeal Paper Book filed by the appellants. The Chartered Accountant in his report dated 17th March, 2017 has observed as under: Based on procedures performed by us, and the information and explanations given to us, in our opinion the accounting treatment contained in Clause 12 of the Draft Scheme is in conformity with the applicable Accounting Standards as mentioned above. Thus the compliance of Section 232(3)(i) has been made. 20.Further Section 133 of Companies Act, 2013 prescribes that the Central Government may prescribe the standards of accounting or any addendum thereto, as recommended by the Institute of Chartered Accountants of India, constituted under Section 3 of Chartered Accountants Act, 1949 (38 of 1949) in consultation with and after examination of the recommendations made by the National Financial Reporting Authority (NFRA). The Auditor has certified that the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paying up unissued equity shares of the company to be issued to members of the company as fully paid bonus shares; or (b) in writing off the expenses of or the commission paid or discount allowed on any issue of equity shares of the company; or (c) for the purchase of its own shares or other securities under section 68. 22.We are not in agreement that the accounting standard have not dealt with the issues specifically and it cannot be said that there is no legal provision specified. 23.The Hon ble Supreme court in the case of Miheer H. Mafatlal Vs Mafatlal Industries Ltd (AIR 1997 SC 506) has already laid down the scope and ambit of jurisdiction of the Company Court whilst approving scheme under erstwhile provisions of Sections 391-394 of Companies Act, 1956 (Presently Section 230 of Companies Act, 2013). In view of the settled legal position, therefore, the scope and ambit of the jurisdiction of the Company Court has clearly got earmarked. The following broad conours of such jurisdiction have emerged: a) The sanctioning court has to see to it that all the requisite statutory procedure for supporting such a scheme has been complied with and that the requi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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