Allowed

Simic Electronics Private Limited v. 0

Bombay HC9 Oct 2015CSP/392/2015

Case brief

AI extract

What is this about?

The Bombay High Court sanctioned the scheme of demerger between Simic Electronics Private Limited and Aayudh Realty Private Limited under Sections 391 and 394 of the Companies Act, 1956, accepting undertakings on accounting and tax compliance.

What did the court decide?

Company Scheme Petitions deemed absolute in terms of prayer clauses; direction to file minutes with Registrar of Company.

Simic Electronics Private Limited Vs 0 — Succession and Inheritance | Bombay HC (2015)

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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. 392 OF 2015

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 906 OF 2014

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Simic Electronics Private Limited

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…….Demerged Company /

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Petitioner Company

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AND

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COMPANY SCHEME PETITION NO. 393 OF 2015

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CONNECTED WITH

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COMPANY SUMMONS FOR DIRECTION NO. 907 OF 2014

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Aayudh Realty Private Limited

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……..Resulting Company/

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Petitioner company

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In the matter of the Companies Act, 1956 (I of

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And

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In the matter of Sections 391 and 394 of the

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Companies Act, 1956 (I of 1956)

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And

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In the matter of the Scheme of Demerger of

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Simic Electronics Private Limited

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(Demerged Company)

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And

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Aayudh Realty Private Limited

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(Resulting Company)

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and their respective shareholders and creditors

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Called for Hearing

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Mr. Sagar R. Madan i/b. Khare Legal Chambers Advocate for the Petitioner Company.

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Mr. D. R. Shah i/B Mr. A. A. Ansari, the Regional Director

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Coram :S.C.Gupte, J. Date : 9^th October , 2015

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MINUTES OF THE ORDER

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Heard Counsel for the Parties. No objector has come before the Court to oppose the Proposed Demerger nor any Party has controverted any averments made in the Petitions.

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Page 2 of 7

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The Sanction of the Court is sought for confirmation for the Scheme of demerger of the Simic Electronics Private Limited (Demerged Company) and Aayudh Realty Private Limited (Resulting Company ) under sections 391 to 394 of the Companies Act, 1956.

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The Resulting Company is engaged in business of Property developers, real estate agent, real estate consultants-consultants etc and has a positive net worth. The Demerged Company is engaged in the business of manufacturers, exporters and suppliers and otherwise dealing in all grades of electronics and electrical components including Mica capacitors, silver mica plates etc.

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The Rational behind this demerger is to enable the demerged company and resulting company to divide their business operations and provide significant impetus to their growth by concentrating respectively and mainly on the business of property developers, real estate agent and consultants. The rationale also is to enhance the scale of operations and reduction in overheads, administrative costs, managerial expenditures and utilization of various resources. The rationale is also to improve the shareholder value of the Demerged Company as well as the resulting company by way of improved financial structure and cash flows, increased asset base and stronger revenues and leveraging the capability of the entity.

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The Resulting company has approved the Scheme of Demerger on 21^st February, 2015 in its Board Meeting of the Directors of the Company.

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Page 3 of 7

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Learned Counsel appearing on behalf of the Petitioner states that they have complied with all the Directions as per the Company Summons for Directions and the Company Scheme Petition has been filed in consonance with the orders passed in the said Company Summons for Directions.

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The Learned Counsel for the Petitioner undertakes to comply with all the statutory requirements if any, as required under the Companies Act, 1956, and the Rules there under. The undertaking is accepted.

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The Regional Director has filed an Affidavit dated 2^nd September, 2015 stating therein that it appears that the Scheme is not prejudicial to the interest of the Shareholders and public , save and accept what is stated in para 6.(a),6(b) and 6(c) of the said Affidavit, the Regional Director has stated as under:

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6(a)-“It has been observed that, the scheme is silent as to how the Demerged Company will give effect to the accounting treatment so far as it relates to transferring the demerged undertaking. When the fixed assets are transferred, correspondingly the demerged company has to give adjustment in the liability side of the balance sheet. Accordingly the petitioner company has to clarify whether such adjustment will be made as against capital of the company or reserve of the company in the scheme itself. In as much such information is not available in the scheme the petitioner company shall satisfy this Hon’ble Court how the Accounting Treatment will be complied with by the Demerged Company ”.

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6(b)- “It has been observed that the business carried on by the demerged company is not proposed to be transferred to the Resulting Company on going concern basis. By way of this demerger, the petitioner companies are attempting to transfer only fixed assets from the demerged company to the resulting company. The resulting company is in the business of real estate, property developers etc. In view of the fact, that the business of the demerged company is not transferred to resulting company as a going concern basis, this scheme is not within the purview of Section 2(19AA) of Income Tax and as such this scheme is not a tax neutral scheme and the decision likely to be arrived by the Income Tax Authority is binding on the petitioner company.”

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Page 4 of 7

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6(c)- “The Deponent further submits that the tax issue if any arising out of this scheme shall be subject to final decision of the Income Tax Authority and the approval of the scheme by the Hon’ble High Court may not deter the Income Tax Authority to scrutinize the tax returns filed by the demerged company after giving effect to the demerger. The decision of Income Tax Authority is binding on the demerged company.”

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As far as the objection of the Regional Director in the paragraph 6 (a) of the Affidavit is concerned, the Learned Counsel for the Petitioner states that the provisional balance sheet as on 31^st March, 2015 is submitted and that the necessary effect is given in the Reserve and Surplus (under General Reserve) by the Demerged Company.

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As far as the objection of the Regional Director in the paragraph 6 (b) and 6 (c) of the Affidavit is concerned, the Learned Counsel for the Petitioner states that the Petitioner Company undertakes to comply with applicable provisions of Income Tax Act, 1961 and abide by the decisions of Income Tax Authority, if any.

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The Learned Counsel appearing on behalf of the Regional Director from the office of the Regional Director states that they are satisfied with the explanation given by the Counsel representing the Petitioner.

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From the material on record the Scheme appears to be fair and reasonable and is non violative of any provisions of law and is not contrary to public policy.

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Since all the requisite statutory compliances are fulfilled the Company Scheme petition 392 of 2015 & 393 of 2015 are made absolute in terms of prayer clauses (a) and (b).

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Petitioner are directed to file/lodge a copy of this order alongwith a copy of the Form of Minutes with the concerned Registrar of Companies, electronically, along with E-Form INC-28 in addition to physical copy as

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Page 5 of 7

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per the relevant provisions of the Companies Act 1956/2013 as and where applicable.

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All the concerned regulatory authorities to act on a copy of this order and the form of minutes duly authenticated by the Company Registrar (O.S) High Court, Bombay.

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(S.C.Gupte., J)

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Page 6 of 7

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C E R T I F I C A T E

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I certify that this Order uploaded is a true and correct

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copy of original signed order.

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Uploaded by : Shankar Gawde, Stenographer

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Page 7 of 7

Simic Electronics Private Limited v. 0

Case brief

What is this about?

What did the court decide?

Simic Electronics 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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