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TMI Blog2020 (3) TMI 1382X X X X Extracts X X X X X X X X Extracts X X X X ..... es, gas dehydration, work over and drilling rig services; and (ii) Oil and Gas Exploration and Production. Each of the businesses carried on by Deep by itself and along with its subsidiaries including Oil and Gas Services Business have significant potential for growth and profitability. The nature of risk, competition, challenges, opportunities and business methods for Oil and Gas Services Business is separate and distinct from Oil and Gas Exploration and Production business. The Oil and Gas Services Business and Oil and Gas Exploration and Production business of Deep are capable of attracting a different set of investors, strategic partners, lenders and other stakeholders. There are also differences in the manner in which Oil and Gas Services Business and Oil and Gas Exploration and Production business of Deep are required to be handled and managed. In order to lend greater/enhanced focus to the operation of the said businesses, it is proposed to re-organize the Oil and Gas Services Undertaking by way of demerger and transfer the same from Deep to Deep CH4. The proposed demerger would result in segregation of Oil and Gas Services Undertaking into Resulting Company and housin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reholders was prayed for, for Deep CH4 Ltd. i.e. applicant resulting company in view of the consent on affidavit so filed by equity shareholders approving the proposed Scheme, being placed on record. Since there are /were no creditors as such convening of meeting of resulting i.e. Deep CH4 does not arise at all. 5. On perusal of the record it is found that vide order dated 19.09.2018 in CA(CAA)103/2019 the meetings dispensed with in view of affidavit of the equity share holder of the Deep CH4 Ltd. Meetings of the creditors were not required as there were/are no creditors. Whereas, directions were issued for convening separate meetings of the Equity Shareholders, Secured Creditors and Unsecured Creditors of Deep Industries Limited, the Applicant De-merged company to obtain their approval to the proposed scheme. Further directions were issued for the service of notice as well as publication of the notice in the newspapers. The Petitioner Companies complied with the said directions. 6. The petitioner has also issued notice of meetings individually to all the equity share holders secure and unsecured creditors of Deep Industries Ltd that is demerged company on or before 28th Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Equity Shares) of the resolution approving the proposed Composite Scheme of Arrangement were far more than the number of votes cast against it (i.e. 1 shareholder holding 1000 Equity Shares) by the Public Shareholders, thereby approving the resolution as required as per SEBI Circular CFD/DIL3/CIR/2017/21 dated 10th March, 2017, by requisite majority. (ii) The scheme was approved unanimously by the Unsecured Creditors of the said De-merged Company. (iii) The Scheme was approved unanimously by the Secured Creditors of the De-merged Company. 8. Vide the aforesaid order dated 19th September 2019, the original Applicant companies were also directed to serve Notice of the Scheme to the Regulatory Authorities-viz. (i) Central Govt. through the Regional Director, North-Western Region, (ii) Registrar of Companies, Gujarat, (iii) concerned Income Tax Authorities; for both the companies and further upon (iv) The Reserve Bank of India; and (v) BSE Limited; (vi) National Stock Exchange Limited and (vii) Securities and Exchange Board of India and (viii) The Directorate General of Hydrocarbons, Ministry of Petroleum and Natural Gas, Government of India; only in case of Deep Industries Li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Notice for the proposed Scheme, nature of the proposed Scheme including proposed reduction of existing share capital of the Petitioner Resulting Company, consideration for the transfer of Demerged Undertaking, as confirmed by the Chartered Accountant as well as the rationale for the proposed Scheme. (ii) Para 2(e) of the affidavit by Regional Director refers to the proposed transfer of part of the Authorised Share Capital, existing in form of the unissued Equity and Preference Share Capital of Deep, the Petitioner De-merged Company to Deep CH4, the Resulting Company, as envisaged under Clause 11 of the proposed Scheme and the consequent amendment in the Capital Clause of both the Petitioner Companies. It is submitted by the Regional Director that such transfer and consolidation of the Authorised Capital is permissible under the provisions of law only for the proposed Scheme of Amalgamation and mergers and not for the Scheme of Arrangement involving Demerger. In this regard, it has been submitted by the petitioners that there is no specific provision of law prohibiting such transfer and consolidation of capital in case of De-merger. It is further submitted that there are numero ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of FEMA and RBI guidelines. In this regard, it has been confirmed that the said Company has so far made the compliance of all applicable provisions of FEMA and RBI guidelines. The notice under Section 230 (5) of the Companies Act, 2013 has been served upon the RBI and it has not made any representation so far. The petitioner company has further undertaken to comply with the applicable provisions of the said act, upon Scheme being effective. (ii) Vide para 2 (i) of the affidavit, it has been observed by the Regional Director that the company has not clearly disclosed the requisite details of the assets and liabilities of the De-merged Undertaking. In this regard, it has been submitted that the columnar list of the Assets and Liabilities of the De-merged Company as on 30th September 2019 has been placed on record alongwith the Additional Affidavit dated 19th February 2020. (iii) Vide Para 2 (j) of the affidavit, it has been observed by the Regional Director that directions be issued for compliance of Section 2 (19 AA) of the Income Tax Act, since the Scheme involves Demerger. In this regard, it has been clarified that clause (F) of the Preamble of the Scheme clearly provides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entation by the Regional Director, it has been observed that Clause 10.7 of the Scheme is not required in the Scheme, which enables the company to adopt other accounting treatment, in consultation with the statutory auditors of the petitioner companies. In this regard, it has been submitted that the said clause is only an enabling clause. It is further confirmed that even in case where any other accounting treatment is found to be more appropriate, the same will be adopted by the Resulting Company, in consultation with its statutory auditor and the same will be in compliance with the applicable accounting standards. In view of the aforesaid explanation, it is not necessary to give any further directions. 12. No representation has been received from the Income Tax Authorities. Hence, it is assumed that the said authorities have no objection to the proposed Scheme. However, it is submitted that on the basis of the records of the Petitioner Companies as on 31st December 2019, there is no undisputed outstanding demand for income tax for any of the petitioner companies. There are disputed income tax demands against Deep Industries Limited, the Petitioner De-merged Company for Assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be paid by Deep Industries Limited, the de-merged Company. 17. Filing and issuance of drawn up order is hereby dispensed with. All concerned authorities to act on a copy of this order along with the scheme duly authenticated by the Registrar of this Tribunal. The Registrar of this Tribunal shall issue the authenticated copy of this order along with Scheme immediately. 18. The Petitioner Companies are further directed to lodge a copy of this order, the schedule of immovable assets of the De-merged Undertaking of the De-merged Company as on the date of this order and the Scheme duly authenticated by the Registrar of this Tribunal, 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. 19. The Petitioner Companies are directed to file a copy of this order along with a copy of the scheme with the concerned Registrar of Companies, electronically, along with INC-28 in addition to physical copy as per relevant provisions of the Act. 20. The approval of this Scheme cannot come on the way of any Statutory and [or Competent Authority to take any action for violation of any law for the time ..... X X X X Extracts X X X X X X X X Extracts X X X X
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