TMI Blog2013 (2) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the petitioner Companies for sanction of a Scheme of Arrangement in the nature of Amalgamation of five Transferor Companies, viz. Aashka Construction Private Limited, Elia Construction Private Limited, Aaheli Construction Private Limited, Madhav Infra Projects Private Limited and MSK Finance Limited with Myraj Consultancy Limited, under Section 391 read with Section 394 of the Companies Act, 1956. It has been contended that most of the companies were incorporated for carrying out the construction projects and are currently engaged in investment activities. Since all of them belong to the same group of management, the amalgamation is proposed in order to achieve synergic benefits. The petitions give in details the benefits envisaged due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h August 2012 and the publication in the Government gazette was dispensed with. Affidavits dated 24th August 2012 confirm the same. No one has come forward with any objections to the said petitions even after the publication. The same has been further confirmed by the additional affidavit dated 12th February 2013. 5. Notice of the petition of the Transferor Companies were served upon the Official Liquidator attached to Gujarat High Court. Vide the respective reports dated 5th February 2013, filed by the Official Liquidator, it is observed that the affairs of four out of the five Transferor Companies have not been conducted in a manner prejudicial to the interest of their members or to the public interest. However, the Official Liquidator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eli Construction Private Limited, the Third Transferor company subsists and hence the same was included in the proposed scheme of amalgamation. However, considering the fact that the Registrar of Companies had taken the necessary actions, including the public notice in Gazette of India dated 2nd October 2010 and the name has been factually struck off from its records, the Board of Directors of the petitioner companies thought it appropriate not to revive the company merely for the purpose of amalgamation. Accepting the recommendation of the Regional Director in this regard, the Board of Directors of all the petitioner Companies passed the requisite resolutions and propose to delete the name of the said company from the proposed scheme and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stakeholders. It is in light of these facts and circumstances that the Appointed Date is proposed to be 1st April 2010. It is further submitted that rights and interests of any of the concerned parties viz. creditors, members and/or general public will not be prejudicially affected because of the said date. However, if the same is modified as suggested by the Regional Director, the interest of the shareholders is likely to be affected. In view of this, it has been submitted that the Appointed Date need not be changed to 1st April 2011. Reliance has been placed in this regard on two unreported judgments of Gujarat High Court as well as that of a division bench of Gujarat High Court on the said issue. (iii)With regard to the third issue vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kes it clear that a company is authorized to prescribe under the Scheme itself, a specific treatment to be given to its reserves after the amalgamation of companies. Further, Section 211 (3B) of the Companies Act, 1956 also provides that if the practice adopted for such accounting entry, varies from the said standard, necessary disclosure should be made in the financial statements. The said issue is already settled by several decisions of various High Courts, including the Gujarat High Court. Moreover, it is hereby clarified that sub Clause 11(e) of the Scheme provides only for a contingency and authorizes the Board of Directors to deal with such exceptional situation of deviation from the Accounting Standard14. It is hereby categorically s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansferee company shall, upon Scheme being effective, disclose in its first profit and loss account and balance sheet, the following, namely:the deviation from the accounting standards; the reasons for such deviation; and the financial effect, if any, arising due to such deviation. 10. With regard to the first observation of the Regional Director, while considering the factual situation of the name of the Third Transferor Company having been struck off as back as October 2010, in my opinion, no purpose will be served by reviving the company and then permitting its amalgamation. Taking into account the Board Resolutions passed by the Petitioner companies to delete the name of the said company from the present scheme appears to be practical ..... X X X X Extracts X X X X X X X X Extracts X X X X
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