Allowed

Sajeel Land Development and Finance Private Limited v. -

Bombay HC14 Nov 2014CSP/248/2014

Case brief

AI extract

What is this about?

The High Court, Bombay, sanctioned a Scheme of Amalgamation under the Companies Act, 1956 involving four transferor companies and one transferee company. The Court found the scheme fair and not prejudicial to public interest, accepted undertakings regarding accounting and tax compliance, and made the petitions absolute.

What did the court decide?

Petitions made absolute; companies directed to lodge copies with Registrar of Companies and pay stamp duty and costs.

Sajeel Land Development and Finance Private Limited Vs - — Specific Performance | Bombay HC (2014)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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COMPANY SCHEME PETITION NO. 246 OF 2014

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 72 OF 2014

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Right Development & Estate Private Limited

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....... Petitioner/the First Transferor Company

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AND

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COMPANY SCHEME PETITION NO. 247 OF 2014

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 73 OF 2014

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Beejay Security And Finance Limited

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....... Petitioner/the Second Transferor Company

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AND

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COMPANY SCHEME PETITION NO. 248 OF 2014

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 74 OF 2014

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Sajeel Land Development & Finance Private Limited

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....... Petitioner/the Third Transferor Company

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AND

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COMPANY SCHEME PETITION NO. 249 OF 2014

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 75 OF 2014

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Longlife Financial And Development Limited

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....... Petitioner/the Fourth Transferor Company

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AND

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COMPANY SCHEME PETITION NO. 250 OF 2014

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 71 OF 2014

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Matrubhumi Granites Private Limited

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....... Petitioner/the Transferee Company

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In the matter of the Companies Act, 1956;

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AND

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

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AND In the matter of Scheme of Amalgamation

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Right Development & Estate Private Limited

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AND

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Beejay Security And Finance Limited AND Sajeel Land Development & Finance Private Limited

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AND

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Longlife Financial And Development Limited

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WITH

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Matrubhumi Granites Private Limited and their respective shareholders

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Called for Hearing

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Mr. Dhiren Akbari, Advocate for the Petitioner in all the Petitions.

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Mr. M. S. Bhardwaj i/b. Mr. H. P. Chaturvedi for Regional Director in all the Petitions.

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Mr. S. Ramakantha, Official Liquidator, present in C.S.P No. 246 to 249 of 2014

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Coram: S. J. Kathawalla, J. Dated: 14^th November, 2014

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PC:

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Heard learned counsel for parties. No objector has come before the Court to oppose the Scheme and nor any party has controvert any averment made in the Petitions.

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The sanction of the Court is sought under Sections 391 to 394 of the Companies Act, 1956, to a Scheme of Amalgamation of Right Development & Estate Private Limited AND Beejay Security And Finance Limited AND Sajeel Land Development & Finance Private Limited AND Longlife Financial And Development Limited WITH Matrubhumi Granites Private Limited and their respective shareholders.

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The learned Advocate for the Petitioner Companies states that the First Transferor Company, Third Transferor Company and Fourth Transferor Company are presently carrying on business of real estate development and the Second Transferor Company is presently carrying on the business of financial consultancy and the Transferee Company is presently carrying on business of granite and real estate development.

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The rational of the Scheme is for the purpose of consolidation of the business into a reasonably sized enterprise and with a view to achieving synergies in terms of optimizing capacity utilization which in turn will benefit the Transferor and the Transferee Companies. All the companies are compatible in terms of nature of their business and are under the same management, common control and have common directors. Amalgamation would yield consolidation of holdings and

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interest. The amalgamation would empower the management to utilize the resources of the company in the best interest. The amalgamation would result in optimum utilization of management and other resources and would reduce the administrative costs.

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The Petitioner Companies have approved the said Scheme of Amalgamation by passing the Board Resolution which is annexed to the respective Company Scheme Petition.

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The learned Advocate for the Petitioners states that the Petitioner Companies have complied with all the directions passed in Company Summons for Direction and that the Petitions have been filed in consonance with the orders passed in respective Company Summons for Direction.

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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 and/or 2013 and the Rules made there under which is applicable. The said undertaking is accepted.

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The Official Liquidator has filed his report on 7^th November, 2014 in Company Scheme Petition Nos. 246 of 2014 to 249 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.

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The Regional Director has filed his Affidavit on 11^th September, 2014, inter alia, stating therein that save and except as stated in paragraphs 6 (a), (b) & (c) of the said Affidavit, it appears that the Scheme is not prejudicial to the interest of shareholders and public. In paragraphs 6 (a), (b) & (c) of the said Affidavit, the Regional Director has stated that :

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a. Clause 11.3 of the Scheme provides for adjustment for differences 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 Standard such as AS-5, etc.

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b. It is observed that all the Petitioner companies are consistently making loss. In this regard, it is respectfully submitted that the 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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c. Clause 15 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

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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 observation made in paragrapg 6 (a) of Affidavit of the Regional Director is concerned, the Petitioner Companies undertakes that Transferee Company shall pass such accounting entries as may be necessary in connection with the Scheme of Amalgamation to comply with other applicable Accounting Standards.

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As far as observation made in paragraph 6 (b) of Affidavit of the Regional Director is concerned, the Petitioner Companies are bound to comply with all applicable provisions of the Income Tax Act and all tax issues arising out of the Scheme of Amalgamation will be met and answered in accordance with law.

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As far as observation made in paragraph 6 (c) of Affidavit of the Regional Director is concerned, the Learned Advocate for the Petitioner Companies states that Clause 15 of the Scheme gives power to the Board of Directors of the Petitioner Companies to amend any part of the Scheme. The Learned Advocate for the Petitioner Companies states 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 Clause 15 of the Scheme will be subject to the approval of the High Court.

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The Learned Counsel for Regional Director on instructions of Mr. M.Chandanamuthu, Joint Director in the office of the Regional Director, Ministry of Corporate Affairs, Western Region, Mumbai states that they are satisfied with the undertaking and submission made by the Petitioner/Transferee Company through their learned advocate. The said undertakings are accepted.

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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.

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Since all the requisite statutory compliances have been fulfilled CSP 246 of 2014 is made absolute in terms of prayer clauses (a) to (i) of the Petition and CSP 247 of 2014 is made absolute in terms of prayer clauses (a) to (i) of the Petition and CSP 248 of 2014 is made absolute in terms of prayer clauses (a) to (i) of the Petition and CSP 249 of 2014 is made absolute in terms of prayer clauses (a) to (i) of the Petition and CSP 250 of 2014 is made absolute in terms of prayer clauses (a) to (i) of the Petition.

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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 the Order.

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Petitioner is directed to file a copy of this order along with a copy of the Scheme of Amalgamation with the concerned Registrar of Companies, electronically, along with E-Form INC28, in addition to physical copy, as per the relevant provisions of the Companies Act 1956 / 2013 which is applicable.

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The Petitioners in all the Company Scheme Petitions to pay costs of Rs.10,000/- each to the Regional Director, Western Region, Mumbai. The Petitioners in the Company Scheme Petition Nos. 246 to 249 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 today.

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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.)

Sajeel Land Development and Finance Private Limited v. -

Case brief

What is this about?

What did the court decide?

Sajeel Land Development and Finance 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

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