TMI Blog2015 (12) TMI 1900X X X X Extracts X X X X X X X X Extracts X X X X ..... le Smt. Justice Abhilasha Kumari For the Petitioner No. 1 : Mr. Bandish Soparkar, Advocate for Mrs Swati Soparkar, Advocate. For the Respondent No. 1 : Mr. Kshitij Amin, Central Government Standing Counsel for Mr Devang Vyas, Advocate. COMMON ORAL ORDER 1 These petitions are filed by three companies for the purpose of obtaining the sanction of this Court to a Composite Scheme of Arrangement in the nature of Slump Sale of Stock Broking Business Undertakings by KIFS Securities Private limited, the Transferor Company, to KIFS Trade Capital Private Limited, the Transferee Company1 and Amalgamation of residue Undertaking of KIFS Securities Private Limited with KIFS International Private Limited, the Transferee Company2, propos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of the Unsecured Creditors, approval was obtained from the Unsecured Creditors representing 98% of value of the total debt. This being a substantial majority, the dispensation of the meetings of the Unsecured Creditors was granted, with a direction to publish the notice of hearing of the petition in newspapers having circulation in Mumbai and Jaipur, in addition to publication in Gujarat. It was also clarified that such dispensation shall not take away the right of the unsecured creditors to object to the proposed Scheme. 4 The substantive petitions for the sanction of the Scheme were filed by all the petitioner companies which were admitted on 3rd November 2015. The notice of the hearing of the petitions were duly advertised in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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 the prior permission of the Central Govt. It is hereby further directed that even after the Scheme is sanctioned, the Transferor company shall comply with all the applicable provisions of law and shall not be absolved from any of its statutory liabilities. 6 Notice of the petitions has been served upon the Central Govt. and Mr. Kshitij Amin, learned Central Government Standing Counsel appears for Mr. Devang Vyas, learned Assistant solicitor General of India. A common affidavit dated 03rd December 2015 has been filed by Mr. Shamb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the prevalent Accounting Standards are not applicable to the proposal of Slump Sale. It has been further submitted that assuming the applicability of the said standard, even under AS14, a company is entitled to prescribe under the Scheme itself, a specific treatment to be given to its reserves. 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 has already been settled by several decisions of various High Courts, including of this Court. The petitioner has undertaken that in case of deviation from the aforesaid Accounting Standard or practice, the Transferee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be issued to the petitioner companies in this regard. 8 Considering the above facts and circumstances and taking into account the contentions raised in the affidavits and reply affidavits, the ratio of the judgments of this High Court, and the submissions advanced during the course of hearing, this Court is satisfied that the observations made by the Regional Director, Ministry of Corporate Affairs, no longer survive. This Court is of the view that the present Scheme of Arrangement is in the interest of the shareholders and creditors of all the companies as well as in the public interest, therefore, the same deserves to be sanctioned. 9 Hence, the following order: The prayers in terms of paragraph 16(a) of the Company Petition No. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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