Allowed

Rushabh Gems Private Limited v. 0

Bombay HC4 Sept 2015CSP/254/2015

Case brief

AI extract

What is this about?

Single judge bench allowed the scheme of amalgamation between Rushabh Gems Private Limited and Shairu Gems Diamonds Private Limited. The court found the scheme fair, reasonable, and compliant with statutory requirements. The petition was made absolute subject to undertakings on tax and accounting and payment of costs.

What did the court decide?

The Company Scheme Petitions were made absolute. Petitioner directed to file order with Registrar of Companies electronically and physically.

Rushabh Gems Private Limited Vs 0 — Specific Performance | Bombay HC (2015)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY SCHEME PETITION NO.254 OF 2015

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO.797 OF 2014

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RUSHABH GEMS PRIVATE LIMITED

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……… Petitioner/ Transferor Company

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AND

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COMPANY SCHEME PETITION NO.255 OF 2015

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO.695 OF 2014

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SHAIRU GEMS DIAMONDS PRIVATE LIMITED

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……… Petitioner/ Transferee 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 of the Companies Act, 1956;

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AND

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In the matter of Scheme of Amalgamation of RUSHABH GEMS PRIVATE LIMITED (THE TRANSFEROR COMPANY);

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WITH

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SHAIRU GEMS DIAMONDS PRIVATE LIMITED (THE TRANSFEREE COMPANY)

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AND

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THEIR RESPECTIVE SHAREHOLDERS AND CREDITORS

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Called for Hearing

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Mr. Chirag Bhavsar i/b M/s. MDP & Partners, Advocate for the Petitioner.

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Mr. Rahul Tiwari i/by A. A. Ansari, for Regional Director in both Company Scheme Petition

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Mr. S. Ramakantha, Official Liquidator, present in CSP No.254 of 2015

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Coram: S. C. Gupte, J.

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Date: 4^th September, 2015

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P.C.

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Heard the counsel for the Petitioner Company. 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 Amalgamation of Rushabh Gems Private Limited (the “Petitioner Company/ the Transferor Company”) with Shairu Gems Diamonds Private Limited (“the Transferee Company”) and their respective shareholders and creditors.

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The Learned Advocate for the Petitioner states that the Transferor Company was incorporated on 16^th May, 1990 to engage in the business of jewelers, manufacturers and refiners of, dealers in, commission agents and exporters and importers of diamonds, gemstones, precious stones and other precious metals and minerals and ornaments and the Transferee Company is also in similar type of business of providing services jewelers, manufacturers and refiners of, dealers in, commission agents and exporters and importers of diamonds, gemstones, precious stones and other precious metals and minerals and ornaments and etc.

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The Learned Advocate for the Petitioner states that the Petitioner Company/ the Transferor Company and Shairu Gems Diamonds Private Limited i.e. the Transferee Company are both under the same management and the business activities of the Transferor Company and the Transferee Company being similar and supplementary to each other, the Petitioner Company/ Transferee Company, which would result into synergistic operating economies, besides economy in costs by combining the business functions and related activities which would enable the amalgamated company to carry on the business more advantageously, efficiently and effectively.

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The Learned Advocate of the Petitioner states that the Board of Directors of the Petitioner Company has approved the Scheme of Amalgamation by passing Board Resolution which is annexed to the Company Scheme Petition.

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

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Counsel appearing on behalf of the Petitioner has stated that Petitioner has 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, 1956/2013 and the rules made there under, whichever applicable. The said undertaking is accepted.

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The Official Liquidator has filed his report on 27^th July, 2015 in the Company Scheme Petition No.254 and 255 of 2015 stating therein 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 by this Court.

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The Regional Director has filed an Affidavit on 2^nd September, 2015 stating therein that save and except as stated in 6(a) to (c) 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 state that:

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“(a) With reference to clause 3.1(iii) of the scheme, it is submitted that the surplus if any arising out of the scheme shall be transferred to Capital Reserve Account of the Transferee Company in as much as the surplus is arising due to transfer of capital assets from Transferor Company to Transferee Company and no revenue is generated by the Transferee Company on such transfer. Hence the surplus arising out of the scheme shall not be treated as free reserve of the Transferee Company.

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(b) Clause 3(iv) of the scheme provides for adjustment for differences in accounting policies between Transferor Company and Transferee Company. In this regard, it is submitted that in addition to the compliance of Accounting Standard – 14, 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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(c) That the Deponent further submits that the Tax issue if any arising out of this scheme shall be subject to final decision of Income Tax Authority and approval of the scheme by Hon’ble High Court may not deter the Income Tax Authority to scrutinize the tax returns filed by the petitioner company after giving effect to the amalgamation. The decision of the Income Tax Authority is binding on the petitioner company.

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As far as the observation made in paragraph 6(a) of the Affidavit of the Regional Director, the Petitioner Companies through their counsel undertakes to follow the accounting treatment provided in the Scheme and to comply with the requirements that the surplus if any arising out of the scheme shall be

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transferred to Capital Reserve Account of the Transferee Company and it will not be treated as free reserves.

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As far as the observation made in paragraph 6(b) of the Affidavit of the Regional Director, the Petitioner Companies through their counsel undertakes to follow the accounting treatment provided in the Scheme and to comply with the requirements of the relevant applicable accounting standards.

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In so far as the observation made in paragraph 6(c) of the Affidavit of the Regional Director, 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 will be met and answered in accordance with law.

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The Learned Counsel for Regional Director on instructions of Mr.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 undertakings given by the advocate of the Petitioner Companies. The said undertakings given by the Petitioner Companies are been 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.

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Since all the requisite statutory compliances have been fulfilled, the Company Scheme Petitions filed by the Petitioner Company is made absolute in terms of prayer clause (a) to (c).

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Petitioner is directed to file a copy of this order along with a copy of the Scheme and Form of Minutes with the concerned Registrar of Companies, electronically, along with E-form INC-28 in addition to physical copy as per the relevant provisions of the Companies Act, 1956/2013.

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The Petitioner Company to pay costs of Rs. 10,000/- each to the Regional Director, Western Region, Mumbai and the Petitioner Company in Company Scheme Petition No.254 and 255 of 2015 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.C. Gupte, J)

Rushabh Gems Private Limited v. 0

Case brief

What is this about?

What did the court decide?

Rushabh Gems Private Limited v. 0

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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