Allowed

Plextech Technologies (India) Private Limited v. -

Bombay HC19 Sept 2014CSP/201/2014

Case brief

AI extract

What is this about?

The High Court sanctioned an amalgamation scheme pursuant to Sections 391 to 394 of the Companies Act, 1956, involving three companies. The court found the scheme fair and reasonable, accepted undertaking regarding reserves and tax implications, and ordered the petitions made absolute subject to requisite regulatory filings and stamp duty adjudication.

What did the court decide?

Petitions made absolute; parties directed to lodge certified copies with Superintendent of Stamps for duty adjudication and file with Registrar of Companies via E-Form INC 28.

Plextech Technologies (India) Private Limited Vs - — Company and Corporate | Bombay HC (2014)

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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 200 OF 2014

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 124 OF 2014

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Industrial X-Ray & Allied Radiographers (India) Private Limited

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………..Petitioner/Transferee Company AND

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COMPANY SCHEME PETITION NO 201 OF 2014

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 125 OF 2014

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Plextech Technologies (India) Private Limited

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….Petitioner/First Transferor Company

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AND

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COMPANY SCHEME PETITION NO 202 OF 2014

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 126 OF 2014

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UT Quality India Private Limited

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……..Petitioner/Second Transferor Company In the matter of the Companies Act,

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1956 (1 of 1956);

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AND

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In the matter of Sections 391 to 394 of the Companies Act, 1956;

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AND

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In the matter of Scheme of Arrangement between Industrial X- Ray & Allied Radiographers (India) Private Limited and Plextech Technologies (India) Private Limited and UT Quality India Private Limited and their Respective Shareholders

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Called for Hearing

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Mr. Hemant Sethi i/b Hemant Sethi & Co., Advocates for the Petitioners in all the Petitions.

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Mr. C.J. Joy With Mr. Parag Vyas, i/b Mr. H. P. Chaturvedi for Regional Director in all the Company Scheme Petitions.

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Mr. S. Ramakantha, Official Liquidator present in Company Scheme Petition No. 201 and 202 of 2014.

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CORAM: S. J. Kathawalla, J.

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DATE: 19^th September, 2014

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Heard counsel for the parties. No objector has come before the court to oppose the Scheme and nor any party has controverted any averments made in the Petition.

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The sanction of the Court is sought under Sections 391 to 394 of the Companies Act, 1956, to the Scheme of Scheme of Arrangement between Industrial X-Ray & Allied Radiographers (India) Private Limited and Plextech Technologies (India) Private Limited and UT Quality India Private Limited and their Respective Shareholders.

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Learned Counsel for the Petitioner states that the Petitioner in Company Scheme Petition No. 200 of 2014 is primarily engaged in the business of instruments like radiography testing, Ultrasound testing, Cross country Pipeline, Automated Ultrasound Testing, Magnetic Particle testing, Liquid Penetrant, Eddy current, TOFD, Stress reliving, Positive Material testing etc. The Company is well established leader in the field of Non Destructive testing all over India and in some part of world. Petitioner in Company Scheme Petition No. 201 of 2014 is engaged in the business of exploring the present and future requirements of the Industry, form monitoring of plants and equipments. With hi-tech equipment and quality engineers with

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ASNT Level II, technicians working under the supervision and guidance of ASNT Level –III experts it strive to give accurate results following all specified methods in the field of advance NDT technologies like Computerized Ultrasonic Corrosion mapping, C-scan & b scan, TOFD Techniques for flaw detection and Evaluation ,Eddy Current Remote field testing of installed or loose heat exchangers tubes, magnetic flux leakage testing of steel wire ropes, long range guided wave ultrasonic inspection systems etc. Petitioner in Company Scheme Petition No. 202 of 2014 has latest techniques in the field of ultrasonic testing, Industrial X-ray which has been set up in collaboration with UT quality Inc. Canada. The Company provides best and reliable services of automated ultrasound testing for pipelines to its valued customers in India. The Applicant company has most advanced UT Technology in order to provide its customers with quality AUT data, including automated wielding quality analysis as well as reporting and accessible anywhere in the world.

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The rationale for the Arrangement as stated in the scheme is that IXAR group of companies, consisting of IXAR, the flagship company of the group, UTQ as its wholly owned subsidiary company and Plextech (where the core promoter a holding majority stake in IXAR), wish to reorganize and consolidate their business activities under one company. To achieve this goal, UTQ and Plextech are proposed to be amalgamated with IXAR and the shareholders of Plextech will be issued shares based on the recognized method of valuation in lieu of their shareholdings in Plextech which is being proposed to be taken over at the book value. UTQ being wholly owned subsidiary, the assets and liabilities will be transferred to IXAR by cancelling the corresponding investments appearing in the books of IXAR.

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The Transferor Companies sand the Transferee Company approved the said Scheme by passing board resolutions which are annexed to the respective Company Scheme Petitions.

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The learned Advocate for the Petitioners state that Petitioner Companies have complied with all directions passed in company summons for Directions and that the Scheme has been filed in consonance with the orders passed in respective Company summons for Directions.

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The learned Advocate appearing on behalf of the Petitioners has stated that they have complied with all requirements as per directions of this Court and they have filed necessary affidavits of compliance in the Court. Moreover, Petitioner Companies undertake to comply with all statutory requirements if any, as required under the Companies Act, 1956/Companies Act, 2013 and the Rules made thereunder. The said undertakings given by the Petitioner Companies are accepted.

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The Regional Director has filed an Affidavit on 27^th August 2014 stating therein that save and except as stated in paragraph 6 of the said affidavit, it appears that the Scheme is not prejudicial to the interest of shareholders and public. In paragraph 6(a), (b) and (c) of the affidavit, it is stated that:

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“That the Deponent further submits that:-

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(a) Clause 11.4 of the Scheme states that the difference, if any, arising out of this Scheme, shall be credited or debited as the case may be, to the General Reserve of IXAR. In this regard , it is submitted that the reserve, if any, arising out of the scheme of amalgamation shall be credited to Capital Reserve Account of the Transferee Company and

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that part of the reserve shall not form free reserve of the Transferee Company.”

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(b) Clause 11.5 of the scheme provides for adjustment for difference in Accounting Policies between the Transferor Companies and the Transferee Company. In this regard, it is submitted that the Transferee Company shall pass such accounting entries which are necessary in connection with the Scheme to comply with other applicable Accounting Standards such as AS-5 etc.,

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(c) In is respectfully submitted that tax implication, if any, arising out of the Scheme is subject to final decision of Income Tax authorities. The approval of the Scheme by this Hon’ble court may not deter the Income Tax Authority to scrutinize the tax returns filed by the Transferee Company after giving effect to this scheme of amalgamation. The decision of the Income Tax Authority is binding on the Petitioner Company.

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(d) Clause 28 of the Scheme provides for Modification of Scheme wherein the Board of Directors of the Transferor Companies and Transferee Company have been authorized to make any amendments to the Scheme, if necessary, after the scheme is approved by the Hon’ble High court. Such liberty shall not be exercised by the Board of Directors without obtaining further approval from the Hon’ble High court. The Transferor and Transferee Company shall be directed to undertake to this effect.

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As far as observations made in paragraph 6(a) of the Affidavit of the Regional Director is concerned, the Transferee Company

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through its Counsel undertakes that the reserve, if any, arising out of the scheme of amalgamation will be credited to Capital Reserve Account of the Transferee Company and that part of the reserve shall not form free reserve of the Transferee Company.

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In so far as observations made in paragraph 6(b) of the Affidavit of Regional Director is concerned, the Transferee Company through their Counsel undertakes that it shall pass such accounting entries which are necessary in connection with the Scheme and to comply with other applicable Accounting Standards.

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In so far as observations made in paragraph 6(c) of the Affidavit of Regional Director is concerned, Petitioner Companies undertakes that they are bound to comply with all applicable provisions of the Income Tax Act and all tax issues arising out of the Scheme will be met and answered in accordance with law.

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As far as observation made in paragraph 6(c) of the Affidavit of Regional Director is concerned, the Learned Counsel for the Petitioner Companies submits that such power to amend the scheme is subject to prior approval of the High Court. It is therefore clarified that the power vested under the Clause 28 of the scheme will be subject to the approval of High Court.

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The Learned Counsel for Regional Director on instructions of Mr. Chandanamuthu, Joint Director legal in the office of the Regional Director, Ministry of Corporate Affairs, Western Region, Mumbai states that they are satisfied with the submissions and undertakings given by the Petitioner Companies as stated hereinabove. The said undertakings given by the Petitioner Company are accepted.

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The Official Liquidator has filed his report on 10^th September, 2014 in the Company Scheme Petition No. 201 and 202 of 2014 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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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.

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Since all the requisite statutory compliances have been fulfilled, the Company Scheme Petition No. 200 to 202 of 2014 filed by the Petitioner Companies are made absolute in terms of prayer clauses (a) of the respective Petitions.

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

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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 E-Form INC 28 in addition to physical copy as per the provisions of the Companies Act, 1956/2013.

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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 in Company Scheme Petition No. 201 and 202 of 2014 to pay costs of Rs.10,000/each to the Official Liquidator, High Court, Bombay. Costs to be paid within four weeks from the date of the order.

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

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All concerned regulatory 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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(S. J. Kathawalla, J)

Plextech Technologies (India) Private Limited v. -

Case brief

What is this about?

What did the court decide?

Plextech Technologies (India) Private Limited v. -

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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