Allowed

Sonata Investments Limited Vs

Bombay HC27 Sept 2012CSP/436/2012

Case brief

AI extract

What is this about?

The Bombay High Court made absolute several Company Scheme petitions regarding a Composite Scheme of Arrangement involving four companies. Addressing objections from the Regional Director, the Court accepted undertakings to comply with statutory requirements regarding share issuance, definitions of reserves, name change, memorandum amendment, and tax liabilities. The Official Liquidator reported n

What did the court decide?

Company Scheme Petitions Nos. 436, 437, 438, and 439 of 2012 were made absolute in terms of the prayer clauses. Directions were issued regarding stamp duty adjudication, filing with the Registrar of C

Sonata Investments Limited Vs — Company and Corporate | Bombay HC (2012)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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ORDINARY ORIGINAL CIVIL JURISDICTION

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COMPANY SCHEME PETITION NO 436 OF 2012

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO 308 OF 2012

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SONATA INVESTMENTS LIMITED

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………… Petitioner / the Transferee Company/the

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Demerged Company

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AND

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COMPANY SCHEME PETITION NO 437 OF 2012

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO 309 OF 2012

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RELIANCE INFRASTRUCTURE AND CONSULTANTS LIMITED

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………… Petitioner / the Transferor Company No.1

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AND

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COMPANY SCHEME PETITION NO 438 OF 2012

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO 310 OF 2012

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RELIANCE UTILITY ENGINEERS PRIVATE LIMITED

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………… Petitioner / the Transferor Company No.2

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AND

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COMPANY SCHEME PETITION NO 439 OF 2012

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO 311 OF 2012

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GLOBTECH ADVISORY SERVICES LIMITED

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………… Petitioner / the Resulting Company

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In the matter of the Companies Act, 1956 (1 of 1956);

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AND

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In the matter of Sections 391 to 394 read with Sections 78, 100 to 103 of the Companies Act, 1956;

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AND

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In the matter of Composite Scheme of Arrangement

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between

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Sonata Investments Limited (“the Transferee Company/Demerged Company”)

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and

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Reliance Infrastructure and Consultants Limited (“the Transferor Company No.1”)

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and

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Reliance Utility Engineers Private Limited (“the Transferor Company No.2”)

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and

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Globtech Advisory Services Limited (“the Resulting Company”)

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AND

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their respective shareholders

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Ms. Alpana Ghone, Counsel with Mr. Rajesh Shah i/b Rajesh Shah & Co., Advocates for the Petitioners in all the Petitions.

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Mrs. R. N. Sutar, Asst. Official Liquidator present in CSP No. 437 of 2012 and 438 of 2012.

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Mr. R.C. Master i/b Dr. T.C.Kaushik for Regional Director in all the Petitions.

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CORAM: Anoop V. Mohta, J.

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DATE: 27^th September, 2012

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P.C.:-

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Heard counsel for the parties.

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The sanction of the Court is sought under Sections 391 to 394 read with Sections 78, 100 to 103 of the Companies Act, 1956, to the Composite Scheme of Arrangement between Sonata Investments Limited, the Transferee Company / Demerged

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Company and Reliance Infrastructure and Consultants Limited, the Transferor Company No.1 and Reliance Utility and Engineers Private Limited, the Transferor Company No.2 and Globtech Advisory Services Limited, the Resulting Company and their respective shareholders.

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The Learned Counsel appearing on behalf of the Petitioners has stated that the Petitioners have complied with all requirements as per directions of this Court and they have filed necessary affidavits of compliance in the Court. Moreover, Petitioners undertake to comply with all statutory requirements, if any, as required under the Companies Act, 1956 and the Rules made there under. The said undertaking is accepted.

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The Regional Director has filed an affidavit dated 14/09/2012 stating therein that save and except as stated in paragraph 6 (a) to (e) , it appears that the Scheme is not prejudicial to the interest of shareholders and public. In paragraph 6 of the said affidavit it is stated that:

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“6. That the Deponent further submits that:

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(a) As per clause 5.6 and 15.5 of the scheme, the Transferee Company and Resulting Company shall take necessary steps to increase or alter or reclassify if necessary, its authorized share suitably to enable to issue and allot preference shares and equity shares. In this connection the Transferee Company and Resulting Company may be directed to comply with provisions of section 94/97 read with Schedule X of the Companies Act 1956, in respect of filing of necessary forms with the Registrar of Companies after payment of necessary, filing fee and stamp duty as applicable on the said forms.

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(b) Clause 6.1.4 of the scheme states that the excess or deficit of the value of the assets over the liabilities determined as per clause 4 .1.1 of the scheme as reduced by the face value of the preference shares issued by SIL pursuant to clause 5.3 of the scheme would be adjusted against Securities Premium Account of SIL. In this connection it is submitted that the reserve arising out of the scheme shall be styled as "Capital Reserve" instead of Securities Premium Account by the Transferee Company.

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(c) Clause 12 of the scheme the name of the Transferee Company is proposed to be changed to “Reliance Utility Engineers Private Limited”. In this connection Transferee Company may be directed to comply with the provisions of section 21/23 of the Companies Act 1956 in respect of filing of necessary forms with the Registrar of Companies and the proposed new name will be allowed subject to availability of the same, by the Registrar of Companies since under the computerized MCA 21 System of allotting the names, it is systemically not possible to reserve the names. Therefore, the name if available at the time of filing of such application, shall be made available by the Registrar of Companies, Mumbai.

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(d) Clause 24.1 of the Scheme deals with change in Main Objects of the Memorandum of Association of the Transferee Company. In this connection, the Transferee Company may be directed to comply with provisions of section 40 read with section 18 of the Act and to file amended copy of Memorandum of Association alongwith Form No.21 with the Registrar of Companies.

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(e) Clause 17.2.1 of the scheme, provides that the Resulting Company shall record the assets and liabilities pertaining to Treasury Undertaking, at the respective fair values as may be decided by the Board of Directors of the Resulting Company. In this regard it is submitted that section 2(19AA) of the Income Tax Act contemplates that the assets/liabilities of the Demerged Company be transferred, and booked in the Resulting Company at value in its books of accounts immediately before the demerger. It is submitted that as the transfer of assets and liabilities are no based on book value but on fair value basis, it is suggested that the Demerged Company has to undertake to pay the tax liability, if any, arising out of this demerger.”

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In view of the objections raised by the Regional Director in his Affidavit, the Learned Counsel for the Petitioners tendered two affidavits dated 18/09/2012 filed by the Company Secretary of Sonata Investments Limited, Petitioner in Company Scheme Petition No. 436 of 2012 and filed by the Director of Globtech Advisory Services Limited, Petitioner in Company Scheme Petition No. 439 of 2012 respectively, which are taken on record.

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The counsel for Petitioners submits that the Petitioners have dealt with all the objections raised by the Regional Director in their respective reply Affidavits. As far as the objection in paragraph 6(a) of the Affidavit of Regional Director is concerned, the Transferee Company and Resulting Company through their respective Affidavit in reply undertakes to comply with the provisions of

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sections 94/97 read with Schedule X of the Companies Act, 1956, in respect of filing of necessary forms with the Registrar of Companies after payment of necessary filing fee and stamp duty as applicable on the said forms. The said undertaking is accepted.

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As far as the objection in paragraph 6(b) of the Affidavit of Regional Director is concerned, the Transferee Company through its Affidavit in reply submits that any excess of the value of the assets (after giving effect to provision of clause 6.1.2 to 6.1.3 of the Scheme) over the liabilities determined as per clause 4 .1.1 of the scheme as reduced by the face value of the preference shares issued by SIL pursuant to clause 5.3 of the scheme would be credited to "Capital Reserve". In case there is a deficit, the same shall be adjusted against Securities Premium Account of SIL. The said submission is taken on record.

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As far as the objection in paragraph 6(c) of the Affidavit of Regional Director is concerned, the Transferee Company through its Affidavit in reply undertakes to comply with the provisions of sections 21/23 of the Companies Act, 1956, in respect of filing of necessary forms with the Registrar of Companies and the proposed new name will be allowed subject to availability of the same, by the Registrar of Companies at the time of making such application. The said undertaking is accepted.

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As far as the objection in paragraph 6(d) of the Affidavit of Regional Director is concerned, the Transferee Company through its Affidavit in reply undertakes to comply with the provisions of section 40 read with section 18 of the Companies Act, 1956 and to file amended copy of Memorandum of Association along with Form No.21 with the Registrar of Companies. The said undertaking is accepted.

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As far as the objection in paragraph 6(e) of the Affidavit of Regional Director is concerned, the demerged Company through its Affidavit in reply undertakes to pay tax liability, if any, arising out of the demerger of Treasury Undertaking. The said undertaking is accepted.

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The Official Liquidator has filed his report dated 22/08/2012 in Company Scheme Petition Nos.437 of 2012 and 438 of 2012 stating therein that the affairs of the Transferor Companies have been conducted in a proper manner and that the Transferor Companies may be ordered to be dissolved by this Court.

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The Learned Counsel for the Petitioner Companies states that they have received letters from some unsecured creditors requesting for copy of petitions and/or payment of their dues. Copies of petitions have been furnished to those of the creditors who asked for it. The Petitioner Companies/their Advocates have not received any objection Affidavit till date. The Petitioner Companies understand that no such objection Affidavit has been received by the Company Department.

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From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy. None of the parties concerned has come forward to oppose the Scheme even in the Court.

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Since all the requisite statutory compliances have been fulfilled, Company Scheme Petition No. 436 of 2012 to 440 of 2012 filed by the Petitioner Companies are made absolute in terms of prayer clauses (a) to (d).

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The Petitioner Companies to lodge a copy of this order and the Scheme, duly authenticated by the Company Registrar, High Court (O.S.), Bombay with the concerned Superintendent of Stamps, for

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the purpose of adjudication of stamp duty payable, if any, on the same within 60 days from the date of the Order.

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Petitioners are directed to file a copy of this order along with a copy of the Composite Scheme of Arrangement with the concerned Registrar of Companies, electronically, along with E-Form 21 in addition to physical copy within 30 days from the date of issuance of the order by the Registry.

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The Petitioner Companies in all the Company Scheme Petitions to pay costs of Rs.10,000/- each to the Regional Director, Western Region, Mumbai and the Petitioner Companies in Company Scheme Petition Nos. 437 of 2012 to 438 of 2012 to pay cost of Rs. 10,000/- each to the Official Liquidator, High Court, Bombay. Costs to be paid within four weeks from today.

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Filing and issuance of the drawn up order is dispensed with.

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All concerned authorities to act on a copy of this order along with Scheme duly authenticated by the Company Registrar, High Court (O. S.), Bombay.

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(Anoop V. Mohta, J.)

Sonata Investments Limited Vs

Case brief

What is this about?

What did the court decide?

Sonata Investments Limited Vs

Case brief

What is this about?

What did the court decide?

What the court decided

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