Allowed

Airtel Broadband Services Private Limited v. -

Bombay HC11 Apr 2014CSP/91/2014

Case brief

AI extract

What is this about?

The Court granted sanction to the Scheme of Amalgamation of Airtel Broadband Services Private Limited with Bharti Airtel Limited. Addressing observations by the Regional Director regarding accounting, tax, and license transfers, the Petitioner Company provided undertakings. The Court accepted these undertakings and observed the scheme was fair and compliant with law, making the petition absolute.

What did the court decide?

Sanction granted to the Scheme of Amalgamation; Order made absolute; Petitioner directed to lodge copies with Registrar of Companies and pay stamp duty and costs.

Airtel Broadband Services Private Limited Vs - — Succession and Inheritance | 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. 91 OF 2014

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 35 OF 2014

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Airtel Broadband Services Private Limited

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[CIN: U72900MH2007PTC175384] …Petitioner Company/ Transferor 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 Petition under 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 of

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Airtel Broadband Services Private Limited (Transferor Company)

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with

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Bharti Airtel Limited (Transferee Company);

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Called for Hearing

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Mr. Virag Tulzapurkar Senior Advocate along with Mr. Tapan Deshpande, Advocate i/b. Amarchand & Mangaldas & Suresh A. Shroff & Co., Advocates for the Petitioner Company

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Ms. S.V. Bharucha , Advocate i/b Mr. H. P. Chaturvedi for Regional Director

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Mrs. R.N. Sutar, Assistant Official Liquidator.

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CORAM: G. S. PATEL , J. DATE : 11^th APRIL, 2014

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P.C.:

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Heard counsel for the Petitioner Company.

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None appeared before the court to oppose the Petition nor has any party controverted averments made in the Petition.

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Learned Counsel for the Petitioner Company states that the Petition has been filed to seek sanction to the Scheme of Amalgamation of Airtel Broadband Services Private Limited (the Petitioner Company) with Bharti Airtel Limited (Transferee Company) (Scheme), pursuant to the provisions of Sections 391 to 394, of the Companies Act, 1956.

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The Petitioner Company is engaged in the business of providing internet and broadband services. The Petitioner Company is a wholly owned subsidiary of the Transferee Company. The Transferee Company is engaged in the business of providing telecommunications and related services. The Learned Advocate for the Petitioner Company says that the benefits of the Scheme are that: (a.) The Transferee Company and the Transferor Company are engaged in substantially similar businesses and the Transferor Company is a wholly owned subsidiary of the Transferee Company; and (b.) Enhancement of shareholder value of both the Transferee Company and the Transferor Company and achieving synergetic and operational efficiencies and economies of scale resulting from commonalty of business activities. The Board of Directors of the Petitioner Company and the Transferee Company have approved the said

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Scheme by passing their respective board resolutions which are annexed to the Petition.

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Vide order dated 21^st January, 2014 passed by the Hon’ble Delhi High Court in Company Application No. 12 of 2014 filed by the Transferee Company, the Delhi High Court dispensed with the holding of the meetings of the creditors / shareholders of the Transferee Company and also dispense with the filing of the application / petition seeking sanction to the Scheme, in view of the fact that (a) the proposed Scheme envisages amalgamation of a wholly owned subsidiary with its holding company (b) there is no arrangement proposed between the shareholders or the creditors of the Transferee Company and the Petitioner Company and (c.) in view of decision of the Delhi High Court in Sharat Hardware Industries Private Limited (1978) 48 Company Cases 23 (Delhi) and the decision of this court in Mahaamba Investments Limited vs. IDI Limited (2001) 105 Company Cases 16 Bombay.

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Learned Counsel for the Petitioner Company states that the Petitioner Company has complied with all the directions passed in the Company Summons for Direction and that the Company Scheme Petition has been filed in consonance with the order passed in the Company Summons for Direction.

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The Learned Counsel appearing on behalf of the Petitioner Company has stated that the Petitioner Company has also complied with all requirements as per directions of this Court and they have filed necessary

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Affidavits of compliance in the Court. Moreover Petitioner Company undertakes to comply with all statutory requirements if any, as required under the Companies Act, 1956 and the Rules made thereunder / the Companies Act, 2013 and the Rules made thereunder, as applicable. The undertaking is accepted.

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The Regional Director has filed an Affidavit on 7^th April, 2014 stating therein that save and except the observations, 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 of the said affidavit it is stated that:

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“6. That the Deponent further submits that:-

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(a) Clause 15 of the scheme provides for accounting treatment relates to amalgamation. In this regard, it is further submits that in addition to compliance of AS 14 Transferee Company shall pass such accounting entries as maybe necessary in connection with the scheme to comply with any other applicable accounting standards.

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(b) Clause 16 of the scheme it is submitted that the Tax issues, if any arising out of this scheme is subject to final decision of Income Tax Authority. The approval of the scheme by this Hon’ble High Court may not deter the rights of the Income Tax Authority to examine the returns filed by the Petitioner Company independently and the decision of the Income Tax authority is binding on the Petitioner Company.

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(c) The Transferor Company has an All India ISP License with access spectrum in 2300 MHz in the service areas of Delhi, Mumbai, Haryana and Kerala. For transferring such license in favour of Transferee Company, the Petitioner Company shall ensure that necessary approval obtained from the Regulatory Authority i.e. Department of Telecommunication”

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(d) Clause 1(a) of the scheme defines ‘Appointed date’, shall be the same as effective date or such other date as may be determined by the Board of Directors of the Transferor Company and Transferee Company. In view of the above the petitioner company may be directed to clarify the same.”

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With regard to the observation in paragraph 6 (a) of the Affidavit of the Regional Director is concerned, the Petitioner Company through its Counsel undertakes that the Transferee Company apart from complying with the AS 14 as set out in the Scheme will also comply with all other Accounting Standard, as applicable.

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As far as the observation in paragraph 6 (b) of the Affidavit of the Regional Director is concerned, the Petitioner Company is 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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With regard to the observation in paragraph 6 (c) of the Affidavit of the Regional Director is concerned, the Petitioner Company through its Counsel undertakes that the Petitioner Company shall ensure that necessary approval for transfer of licenses such as All India ISP License with access spectrum in 2300 MHz in the service areas of Delhi, Mumbai, Haryana and Kerala, as stated therein, if required, are obtained from the Regulatory Authority i.e. Department of Telecommunication;

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With regard to the observation in paragraph 6 (d) the Petitioner Company through its Counsel clarifies that that the Scheme is conditional upon and subject to the approvals set out in clause 17 of the Scheme. The date on which all the approvals set out in clause 17 of the Scheme, including

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filing of the order of this Court with the Registrar of Companies Mumbai and New Delhi is completed, will be the Effective Date as defined in the Scheme and in terms of the definition of the Appointed Date, the Effective date will be the Appointed Date;

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The Learned Counsel for the Regional Director on instructions of Mr. M. Chandanamuthu, Joint Director Legal in the office of the Regional Director Legal, Ministry of Corporate Affairs, Western Region, Mumbai states that they are satisfied with the undertakings given by the Petitioner Company through its Counsel. The undertakings given by the Petitioner Company hereinabove are accepted.

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The Official Liquidator has filed his report on 8^th April, 2014 stating that the affairs of the Petitioner Company, have been conducted in a proper manner and that the Petitioner Company may be ordered to be dissolved without winding up.

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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, Company Scheme Petition No. 91 of 2013 filed by the Petitioner Company is made absolute in terms of prayer clauses (a) and (b).

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The Petitioner Company 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

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adjudication of stamp duty payable, if any, within 60 days from the date of the order.

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The Petitioner Company is directed to file a copy of this order along with a copy of the Scheme duly authenticated by the Company Registrar, High Court [O.S.], Bombay, with the concerned Registrar of Companies, electronically, along with e-Form 21/e-form INC 28 in addition to physical copy as per provisions of Companies Act, 1956/ Companies Act, 2013, as applicable.

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The Petitioner Company to pay costs of this Company Scheme Petition of Rs.10,000/- each to the Regional Director, Western Region, Mumbai and 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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( G. S. Patel, J )

Airtel Broadband Services Private Limited v. -

Case brief

What is this about?

What did the court decide?

Airtel Broadband Services Private Limited v. -

Case brief

What is this about?

What did the court decide?

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