Allowed

Jay Investment Private Limited v. ..

Gujarat HC2 Jul 2015COMP/140/2015

Case brief

AI extract

What is this about?

The Court sanctioned a Scheme of Arrangement under the Companies Act, 1956, for the amalgamation of Jay Investment Private Limited (Transferor) with GPSAR Healthcare Limited (Transferee). Addressing observations from the Regional Director, the Court exempted the need for a valuation report and specific asset declarations given the group relationship and nature of assets, while directing preservati

What did the court decide?

Sanctioning the Scheme of Arrangement for amalgamation; directing preservation of Transferor's books for 8 years; requiring submission of asset schedules and certified order to Registrar of Companies.

Jay Investment Private Limited Vs .. — Specific Performance | Gujarat HC (2015)

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O/COMP/140/2015 ORDER

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

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COMPANY PETITION NO. 140 of 2015

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In COMPANY APPLICATION NO. 109 of 2015

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With
COMPANY PETITION NO. 141 of 2015

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In

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COMPANY APPLICATION NO. 110 of 2015

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==============================================================
JAY INVESTMENT PRIVATE LIMITED....Petitioner(s)

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Versus

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......Respondent(s)

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==============================================================
Appearance:

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MR JAIMIN DAVE FOR MRS SWATI SOPARKAR, ADVOCATE for the
Petitioner(s) No. 1

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MR DEVANG VYAS, ADVOCATE for the Respondent(s) No. 1

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==============================================================

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CORAM: HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI

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Date : 02/07/2015

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ORAL ORDER

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1. These are the petitions filed by the petitioner
companies for sanction of a Scheme of Arrangement in
the nature of Amalgamation of Jay Investments Private
Limited, the Transferor Company with GPSAR Healthcare
Limited, the Transferee Company under Section 391 to
394 of the Companies Act, 1956. It has been contended
that both the companies belong to the same group of
management. The amalgamation is proposed in order to
achieve synergic benefits and consolidation of the
activities for the rapid growth of the Transferee
Company. The petitions give in details the benefits
envisaged due to the scheme.

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2. It has been pointed out that vide order dated 17th

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Page 1 of 8

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O/COMP/140/2015 ORDER

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April 2015 passed in the Company Application No. 109
of 2015, the meetings of the Shareholders as well as
Unsecured Creditors of the Transferor company, were
dispensed with in view of the written consent letters
from all of them being placed on record. There are no
Secured Creditors of the company. Similarly, in case
of the Transferee Company, vide said order dated 17th
April 2015, the meeting of the Equity Shareholders was
dispensed with in view of the written consent letters,
placed on record. The meeting of the Creditors of the
Transferee Company was dispensed with accepting the
contention that rights and interests of these
creditors are not being adversely affected due to the
scheme.

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3.The substantive petitions were admitted vide
order dated 5th May 2015. The public notices for the
same were duly advertised in the newspapers ‘Indian
Express’, English daily and ‘Sandesh’, Gujarati daily,
all Gujarat editions dated 20thMay 2015. The
publication in the Government gazette was dispensed
with. Affidavits dated 10thJune 2015 confirmed the
same. No one has come forward with any objections to
the said petitions even after the publication and the
same has been further confirmed by the additional
affidavit dated 22nd June 2015.

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4.Notice of the petition of the Transferor Company
was served upon the Official Liquidator attached to
Gujarat High Court. Vide the report dated 23rd June

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Page 2 of 8

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O/COMP/140/2015 ORDER

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2015, filed by the Official Liquidator; it is observed
that the affairs of the Transferor company have not
been conducted in a manner prejudicial to the interest
of its members or to the public interest. However, the
Official Liquidator has requested this court to direct
the Transferor Company to preserve its books of
accounts and records for a period of 8 years from the
date of sanctioning the scheme and not to dispose off
the same without prior permission of the Central Govt.
The Petitioner companies are accordingly directed to
preserve the books and records of the Transferor
Company for a period of 8 years from the date of
sanctioning the scheme and not to dispose of the same
without prior permission of the Central Govt.

¶28

5.Notice of the petitions have been served upon the
Central Govt. and Shri Devang Vyas, Standing Counsel
appear for the Central Govt. A common affidavit dt.
17th June 2015 has been filed by Mr. Shambhu Kumar
Agarwal, the Regional Director, North-Western Region,
Ministry of Corporate Affairs, whereby some
observations are made.

¶29

6.The attention of this court is drawn to the
common Additional Affidavit dated 22nd June 2015, filed
by Mr. Ankur R. Patel on behalf of the petitioner
companies which provide requisite explanation for the
said issues raised by the Regional Director.

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 (i)The observations made vide para 2 (a) and (b)
refer to the factual aspects of the proposed
scheme and they do not need any response from

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Page 3 of 8

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O/COMP/140/2015 ORDER

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the petitioners.

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(ii)The observation made vide para 2 (c) of the
said affidavit pertains to absence of the
valuation report while working out the
Exchange Ratio as proposed under the scheme.
In this regard, it has been pointed out that
both the petitioner companies belong to the
same group and shares are held by family
members or group companies only. There is no
public interest involved in the same.
Reliance is placed on the decision in case of
Mahavir Weaves Private Limited (83 Company
Cases 180, Gujarat). Considering the said
decision, it is not necessary to provide the
valuation report for the same.

¶35

(iii)It has been further observed by the Regional
Director that the information provided by the
petitioner company in reply to their query on
the issue is ambiguous and contradictory. In
this regard, it has been clarified that the
Transferor Company, being an investment
company, does not have any immovable
properties, at the moment. Clause 4.2 of the
scheme is a general clause which envisages
transfer of the whole undertaking of the
Transferor Company and does not refer to
specific assets. Upon sanction of the scheme,
the schedule of assets shall be submitted by
the said company, which shall contain the
details of assets as on the date of the
sanction of the scheme by the Hon’ble court,

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Page 4 of 8

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O/COMP/140/2015 ORDER

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which shall be transferred to the Transferee
Company. It is also clarified that the
present scheme does envisage the issue of
Shares of the Transferee Company to the
existing shareholders of the Transferor
company in form of the fair and reasonable
consideration. In view of the said
clarification, it is not necessary to issue
any further directions in this regard.

¶39

 (iv)The next observation made vide para 2(d)
pertains to the No Objection Certificate to
be obtained from RBI, in view of the
Transferor Company being a registered NBFC.
In this regard, it has been clarified that
the petitioner company has voluntarily
decided to surrender the said registration as
NBFC and has already initiated the requisite
procedure for the same. In light of the same,
it is not necessary to issue any further
directions.

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(v) The next observation made vide para 2(e)
pertains to the Accounting treatment proposed
vide clause 6.4 of the Scheme. The said issue
has already been settled by a series of
judgments of this High Court. Vide clause 6.1
of the scheme, the petitioner has confirmed
the compliance of AS-14. However, in case of
any deviation from the said standard, it
shall make the requisite disclosures in the
first financial statement of the Transferee
Company in compliance with the applicable

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Page 5 of 8

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O/COMP/140/2015 ORDER

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provisions of the Companies Act. Further, the
issue of undertaking confirming the
restriction on the use of the General Reserve
is also not necessary. Reliance has been
placed on the decision of the division bench
of Gujarat High Court in the case of Adishree
Tradelinks Private Limited. In view of the
same, no directions are required to be issued
to the petitioner companies.

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(vi)The next observation made vide para 2(f)
pertains to the letter dated 21st May 2015
from the Regional Director to the Income Tax
dept. in order to obtain their objections if
any. Since the statutory period of 15 days as
envisaged by the relevant circular of the
Ministry of Corporate Affairs is over, it can
be presumed that the Income Tax dept. has no
objection to the proposed scheme of
arrangement.However,thePetitioner
Companies have clarified that they shall
comply with applicable provisions of Income
Tax Act and Rules.

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(vii)It has been pointed out by the Regional
Director that there are no complaints
received against any of these companies by
the Registrar of Companies and that the
Regional Director has no other objections to
the scheme.

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Thus, considering all the observations of the
Regional Director and the submissions and
explanations given by the Petitioner

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Page 6 of 8

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O/COMP/140/2015 ORDER

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Companies, I am satisfied that the issues
raised by the Regional Director are not
material for the sanction of the scheme and
no directions are required to be given to the
petitioner companies while granting the
sanction to the scheme.

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7. Heard Mr. Jaimin Dave for Smt. Swati Saurabh
Soparkar, learned advocate for the petitioner
companies and the counsel appearing for the Central
Govt. Having gone through the petitions, having
considered the submissions made in this regard and
being satisfied that amalgamation under the proposed
scheme would be in the interest of the companies and
their members and creditors, the Scheme is hereby
sanctioned. Prayers in terms of paragraph 16 (a) of
the Co. Petition No. 109 and 15 (a) of the Co.
Petition No. 110 of 2015 are hereby granted.

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8. The petitions are disposed of accordingly. So
far as the costs to be paid to the Central Govt.
Standing Counsel are concerned, the same are
quantified at Rs. 7,500/-per petition. The same may be
paid to the counsel appearing for the Central Govt.
Cost of Rs. 7,500/- be paid to the Office of the
Official Liquidator towards cost for the Transferor
Companies.

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9. The petitioner companies are further directed to
lodge a copy of this order, the schedules of immovable
assets of all the Transferor Companies as on the date

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Page 7 of 8

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O/COMP/140/2015 ORDER

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of this order and the Scheme duly authenticated by the
Registrar, High Court of Gujarat, with the concerned
Superintendent of Stamps, for the purpose of
adjudication of stamp duty, if any, on the same within
60 days from the date of the order.

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10. The Petitioner companies are directed to file a
copy of this order alongwith a copy of the scheme with
the concerned Registrar of Companies, electronically,
along with INC-28 in addition to physical copy as per
relevant provisions of the Act.

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11. Filing and issuance of drawn up order is hereby
dispensed with.

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12. All concerned authorities to act on a copy of
this order along with the scheme duly authenticated by
the Registrar, High Court of Gujarat. The Registrar,
High Court of Gujarat shall issue the authenticated
copy of this order alongwith Scheme as expeditiously
as possible.

¶59

(VIPUL M. PANCHOLI, J.)

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Jani

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Page 8 of 8

Jay Investment Private Limited v. ..

Case brief

What is this about?

What did the court decide?

Jay Investment Private Limited v. ..

Case brief

What is this about?

What did the court decide?

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