Allowed

Lalbhai Realty Finance Private Limited v. ..

Gujarat HC9 Jul 2015COMP/165/2015

Case brief

AI extract

What is this about?

The High Court sanctioned a Scheme of Arrangement for the amalgamation of Lalbhai Realty Finance Private Limited with Amazon Textiles Private Limited. The court addressed clarifications from the Official Liquidator and Regional Director but found them non-material. It directed preservation of records and filing of the order with the Registrar of Companies.

What did the court decide?

Scheme of Arrangement sanctioned; costs to Government and Official Liquidator quantified; directions to preserve books for 8 years and lodge copy for stamp duty.

Lalbhai Realty Finance Private Limited Vs .. — Specific Performance | Gujarat HC (2015)

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O/COMP/165/2015 ORDER

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

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COMPANY PETITION NO. 165 of 2015

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In COMPANY APPLICATION NO. 147 of 2015 With

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COMPANY PETITION NO. 166 of 2015

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COMPANY APPLICATION NO. 148 of 2015

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LALBHAI REALTY FINANCE PRIVATE LIMITED....Petitioner(s) Versus

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......Respondent(s)

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Appearance:

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MRS SWATI SOPARKAR, ADVOCATE for the Petitioner(s) No. 1 MR DEVANG VYAS, ADVOCATE for the Respondent(s) No. 1

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CORAM: HONOURABLE MR.JUSTICE VIPUL M. PANCHOLI

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Date : 09/07/2015

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ORAL ORDER

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These are the petitions filed by the petitioner companies for sanction of a Scheme of Arrangement in the nature of Amalgamation of Lalbhai Realty Finance Private Limited with Amazon Textiles Private Limited, the Transferee Company under Section 391 to 394 of the Companies Act, 1956. It has been contended that the all 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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It has been pointed out that vide the order dated 27^th April 2015

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Page 1 of 6

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O/COMP/165/2015 ORDER

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passed in the Company Application no. 147 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 and there were no secured creditors. Similarly, in case of the Transferee Company vide the said order dated 27^th April 2015; passed in the Company Application no. 148 of 2015, the meetings of the Equity Shareholders and Preference Shareholders were 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 proposed scheme.

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The substantive petitions were admitted vide order dated 5^th May 2015. The public notices for the same were duly advertised in the newspapers ‘Indian Express’ English daily, Ahmedabad edition, and ‘Gujarat Samachar’, Gujarati daily, Ahmedabad edition dated 16^th May 2015. The publication in the Government gazette was dispensed with. Affidavits dated 4^th June 2015 confirm 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 17^th June 2015.

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Notice of the petition of the Transferor Company was served upon the Official Liquidator attached to Gujarat High Court. Vide the report dated 24^th June 2015, filed by the Official Liquidator; it is observed that the affairs of the Transferor Company has not been conducted in a manner prejudicial to the interest of their members or to the public interest. However, the Official Liquidator has sought clarification on two issues. In this regard, at the time of hearing it has been clarified that the

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Page 2 of 6

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O/COMP/165/2015 ORDER

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Petitioner Company has already started to maintain its requisite Assets Registers. With regard to second observation, it has been clarified that the observation that short term funds have been used for long term basis has no relevant to the conduct of the petitioner company’s affairs as being against the public interest. More so when the Petitioner is a private limited company and therefore also the practice adopted by the company does not affect the public interest and the same is not a material consideration for the sanction of the scheme. The Official Liquidator has further requested this court to direct the Petitioner companies to preserve the 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 Government 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 Government.

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Notice of the petitions have been served upon the Central Government and Shri Devang Vyas, learned Assistant Solicitor General appearing for the Central Government. A common affidavit dated 12th 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.

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The attention of this court is drawn to the common Additional Affidavit dated 17^th June 2015, filed by Mr. Jayesh Thakkar 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

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O/COMP/165/2015 ORDER

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aspects of the proposed scheme and they do not need any response from the petitioners.

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(ii) The only observation made vide para 2(c) pertains to the letter dated 18^th 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, the Petitioner Companies have clarified that they shall comply with applicable provisions of Income Tax Act and Rules.

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(iii) 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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I have heard Mr. Bandish Soparkar, learned advocate appearing for Smt. Swati Saurabh Soparkar, learned advocate for the petitioner companies and the counsel appearing for the Central Government. Considering all the observations of the Regional Director and the submissions and explanations given by the Petitioner Companies, I am satisfied that the issues raised by the Regional Director or the Official Liquidator 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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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

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Page 4 of 6

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O/COMP/165/2015 ORDER

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their members and creditors, the Scheme is hereby sanctioned. Prayers in terms of paragraph 16 (a) of the Company Petition No. 165 of 2015 and 15 (a) of the Company Petition No. 166 of 2015 are hereby granted.

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The petitions are disposed of accordingly. So far as the costs to be paid to the Central Government 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 Government Cost of Rs. 7,500/- be paid to the Office of the Official Liquidator towards cost for the Transferor Company.

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The petitioner companies are further directed to lodge a copy of this order, the schedules of immovable assets of the Transferor Company as on the date 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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The Petitioner companies are directed to file a copy of this order along with 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. Filing and issuance of drawn up order is hereby dispensed with.

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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 along with Scheme as expeditiously as possible.

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Page 5 of 6

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O/COMP/165/2015 ORDER

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(VIPUL M. PANCHOLI, J.)

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sndevu

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Lalbhai Realty Finance Private Limited v. ..

Case brief

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Lalbhai Realty Finance Private Limited v. ..

Case brief

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