Allowed

Albeaj Engineering Corporation Private Limited v. -

Bombay HC2 May 2014CSP/40/2014

Case brief

AI extract

What is this about?

The High Court of Bombay sanctioned the Scheme of Amalgamation between two private limited companies. No objections were raised, statutory compliances were verified, and the court found the scheme fair, reasonable, and not contrary to public policy or the Companies Act.

What did the court decide?

Company Scheme Petition No. 39 of 2014 and No. 40 of 2014 made absolute; directions regarding stamp duty, ROC filing, and costs issued.

Albeaj Engineering Corporation Private Limited Vs - — Specific Performance | 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.39 OF 2014. CONNECTED WITH COMPANY SUMMONS FOR DIRECTION NO.861 OF 2013.

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GASO ENERGY SYSTEMS (INDIA) PRIVATE LIMITED

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....Petitioner/ Transferor Company.

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WITH

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COMPANY SCHEME PETITION NO.40 OF 2014. CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO.862 OF 2013.

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ALBAJ ENGINEERING CORPORATION PRIVATE LIMITED

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....Petitioner/ Transferee Company.

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In the matter of the Companies Act 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 Amalgamation and Arrangement of Gaso Energy Systems (India) Private Limited, Transferor Company with Albaj Engineering Corporation Private Limited and their Respective Shareholders And Creditors.

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Called for hearing

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Mr. Rahul Oak, Advocate for the Petitioners in both Petitions. Mrs. R. N. Sutar, Asstt. Official Liquidator, present in CSP No. 39 of 2014.

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Mr. C.J. Joy i/b Dr. H.P.Chaturvedi for Regional Director in both Petitions.

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CORAM: G. S. patel, J.

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DATE : 2^nd May, 2014 PC:

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

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The sanction of the Court is sought to a Scheme of Amalgamation and Arrangement of Gaso Energy Systems (India) Private Limited with Albaj Engineering Corporation Private Limited and their Respective Shareholders and Creditors, under Sections 391 to 394 of the Companies Act, 1956.

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Learned Counsel for the Petitioners states that the Transferor Company is carrying on business of Manufacturing, fabrication, processing, designing, alteration, installing and consigning steam pipes as well as acting as a consultants of Process Industries contacted with Energy systems of Gas Air Steam and Oil Industries and Transferee Company is carrying on business of Manufacturing, Contractors, Sub-Contractors, Quasi-Contractors and Consultancy services. The proposed scheme of Amalgamation will have the benefit that The integration of the operations of Transferor Company and Transferee Company would have the benefit of eliminating duplication of processes and structures resulting in cost savings and A simplified corporate structure and improved management focus and Centralizing the activities of the two companies is expected to lead to improvement in operational and cost efficiency through economies of scale, optimization of resources, expansion of asset base and a stronger

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balance sheet of the enlarged company and Post the amalgamation of Transferor Company into Transferee Company, Transferor Company will be dissolved. Consequently, there would be less regulatory and legal compliance obligations including accounting, reporting requirements, statutory and internal audit requirements, tax filings etc and therefore reduction in administrative costs and The restructuring would facilitate improvement in organizational capabilities arising from the pooling of human resources with diverse skills, talent and vast experiences; and The combined operations of Transferor Company and Transferee Company are expected to give rise to capital efficiency and improved cash flows. The Transferor and Transferee Company have approved the said Scheme of Amalgamation by passing the Board Resolutions which are annexed to the respective Company Scheme Petitions.

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The learned Advocate for the Petitioners further states that, Petitioner Companies have complied with all the directions passed in Company Summons for Directions and that the Company Scheme Petitions have been filed in consonance with the orders passed in respective Company Summons for Directions and seeks sanction to the said proposed Scheme of Amalgamation.

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The learned counsel appearing on behalf of the Petitioners have stated that the Transferor Companies and the Transferee Company have complied with all requirements as per directions of this Court

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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, 1956/2013 and rule made there under whichever is applicable. The said undertaking is accepted.

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The Official Liquidator has filed his report on 24/03/2014 in Company Scheme Petition No. 39 of 2013 stating that the affairs of the Transferor Company has been conducted in a proper manner and that the Transferor Company may be ordered to be dissolved.

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The Regional Director has filed an Affidavit on 16/04/2014 stating therein save and except as stated in paragraph 6, it appears that the Scheme does not appear to be prejudicial to the interest of shareholders and public. Paragraph 6 of said Affidavit is as under :

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“6 That the Deponentfarther submits that,

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a) Clause 14 of the scheme provides for Accounting Treatment in the books of Transferee Company. In this regard, it is submitted that in addition to compliance of Accounting Treatment provided therein, the Transferee Company shall pass such accounting entries which are necessary in connection with the scheme to comply with other applicable Accounting Standards.

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b) The Income Tax Authority, vide its letter dated 05.03.2014, has given , No objection, in respect of Transferee Company. Copy of the same is annexed herewith as Exhibit – D1 However, no specific comments have been received from Income Tax Authority with respect to Transferor company. In this regard, it is submitted that Transferee Company was then a Partnership Firm and hence the deponent could not ascertain the financial position of that Partnership Firm, now became a company under the provision of Companies Act, 1956. It may also be considered that the Appointed Date i.e. 13.08.2013, is the date on which

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the Partnership Firm was converted into part, IX company. Hence, Deponent submits that tax issue, if any, arising out of this scheme is subject to final decision of Income Tax Authority and approval of the scheme by this Hon,ble High court may not deter the Income Tax Authority to examine the returns independently.

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c) Clause 17 of the scheme provides for Modification of scheme wherein the Board of Directors of the Transferor company 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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So far as the observation in paragraph 6 (a) of the Affidavit of Regional Director is concerned, the Petitioner /Transferee Company through its counsel undertakes that in addition to compliance of Accounting Treatment provided in the Clause 14 of the Scheme, the Transferee Company will pass such accounting entries which are necessary in connection with this Scheme to comply with any other Accounting Standards

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So far as the observation made in paragraph 6(b) of his Affidavit, the Petitioner Company submit that the Petitioner is bound to comply with all applicable provision of Income Tax Act, and all tax issues arising out of Scheme will be met and answered in accordance with law.

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So far as the observation in paragraph 6 (c) of the Affidavit of Regional Director is concerned, Clause 17 of the Scheme gives power to Board of Director of the Transferor and Transferee Company to

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amend any part of the Scheme. The Learned Counsel for the Petitioner Companies state that such power to amend the scheme is always subject to prior approval of the High Court. However, since the clause specifically refer to the power of the Board of Director of Transferor and Transferee Company which is not inconsonance with Section 392 of Companies Act, 1956, it is clarified that power vested under clause 17 of the Scheme will be subject to prior approval of the High Court.

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The Learned Counsel for Regional Director on instructions of Mr. M. Chandana Muthu, Joint Director Legal in the office of the Regional Director, Ministry of Corporate Affairs, Western Region, Mumbai states that they are satisfied with the undertaking given by the Advocate for the Petitioner Company. The undertaking given by the petitioner companies 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 in the court.

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Since all the requisite statutory compliances have been fulfilled, Company Scheme Petition No. 39 of 2014 and Company Scheme Petition No. 40 of 2014 are made absolute in terms of prayer clauses (a) to (c).

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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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Petitioners are 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 21 or INC 28 in addition to physical copy as per the relevant provisions of the Companies Act, 1956/2013 whichever is applicable.

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The Petitioner Companies to pay costs of Rs.10,000/- each to the Regional Director, Western Region, Mumbai and the Petitioners in the Company Scheme Petition No. 39 of 2014 to pay cost of Rs 10,000/- 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 authorities concerned 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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(G. S. Patel, J.)

Albeaj Engineering Corporation Private Limited v. -

Case brief

What is this about?

What did the court decide?

Albeaj Engineering Corporation 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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