JUDGMENT This petition under Sections 391 and 394 of the Companies Act 1956 has been filed to sanction the Scheme of Amalgamation of the petitioner Anu Trading Private Limited (transferor Company) with Shinano Retail Private Limited (transferee Company) whereby the entire business and whole of the undertaking of the transferor Company is to be transferred to and vested in the transferee Company in terms of the Scheme of Amalgamation. 2. The petitioner/transferor Company was incorporated on 10th day of December, 2007 and the transferee Company was incorporated on 3rd day of December, 2007. The Scheme of Amalgamation has been filed as Annexure H to this petition. 3. In the first stage proceedings, this Court vide order dated 16th May, 2012 in Co. P. No. 14/2012 had dispensed with the meeting of the equity shareholders and unsecured creditors of the transferor Company for the reasons stated therein and it was also noted that there was no preferential share-holder and secured creditor of the transferor Company. 4. In the present petition, this Court vide order dated 4-7-2012 had issued notice to Registrar of Companies M.P., Regional Director, Western Region and Official Liquidator and directed publication of petition in terms of Company Court Rules. 5. The Regional Director (RD), North Western Region had filed the affidavit, dated 10-9-2012 stating that the consent of M/s. Devaki Commercials Private Limited (DCPL) may be obtained by way of an affidavit forming part of these proceedings before the Scheme of Amalgamation is finally sanctioned. In pursuance to' the said report, Devaki Commercial Private Limited has filed the affidavit, dated 20th September, 2012 confirming and consenting to the approval of the DCPL to the Scheme of Amalgamation. Letters of consent and approval to the Scheme are enclosed as Annexures A-1 and A-2 and the Resolution as Annexure B to the affidavit. 6. The affidavit of the RD, dated 10th September, 2012 also indicates that Registrar of the Companies, Gwalior had submitted his report, dated 30th July, 2012 and as per that report, no complaint/representations were received against the petitioner-Company in respect of Scheme of Amalgamation between the petitioner/Companies. The RD has stated that there is no other objection to the proposed Scheme of Amalgamation. 7. The Official Liquidator (OL) had also submitted his report, dated 10-9-2012. The RD has stated that there is no other objection to the proposed Scheme of Amalgamation. 7. The Official Liquidator (OL) had also submitted his report, dated 10-9-2012. The report shows that the OL had not received any complaint against the proposed Scheme of Amalgamation and it has been stated that subject to compliance of Paras 13 and 14 relating to protection of the interest of the shareholders and debenture-holders, the affairs of the transferor Company have not been conducted in a manner prejudicial to the interest of its members, creditors or to public interest. Counsel for the petitioner has agreed to take appropriate steps in the light of Paras 13 and 14 of the report. It has also been pointed out in the report that present Scheme of Amalgamation is a part of group restructuring and that under the larger Scheme, 8 companies are to merge in the transferee Company. 8. At this stage, the Commissioner of Income Tax, Indore had filed an application for intervention in this matter alleging that no Income Tax Return were filed by the petitioner/transferor Company since the date of its inception and in a survey under Section 133A by the officials of the department on 30-8-2012 number of incriminating documents were found, therefore, the Scheme of Amalgamation will adversely affect the interest of the Income Tax Department. 9. Learned Counsel for Income Tax Department has submitted that the Scheme has been framed to evade the tax liability and that the survey of the transferor. Company was done on 30-8-2012, i.e., after the appointed date and therefore, the proceedings against the transferor Company would be affected if the merger is allowed. He has further submitted that this Court can lift the veil and look into the true nature of the Scheme. 10. Shri Vivek Tankha, learned Counsel appearing for the petitioner opposing the objection of Income Tax Department has questioned the locus of the Income Tax Department to raise objection in these proceedings. He has also submitted that the Scheme is in the public interest and it has not been framed with the intention and object to evade tax and that in terms of the Scheme it would be open to the Income Tax Department to proceed against the concerned company in respect of its liability. 11. He has also submitted that the Scheme is in the public interest and it has not been framed with the intention and object to evade tax and that in terms of the Scheme it would be open to the Income Tax Department to proceed against the concerned company in respect of its liability. 11. Learned Counsel for petitioner referring to the judgment of Bombay High Court in the matter of Jindal Iron and Steel Company Ltd. (JISCO) v. A CIT, Company Application No. 123/2004 connected with Company Petition No. 76/2004, and in the matter of AVM Capital Services P. Ltd. v. In Company Scheme, Petition No. 670/11, dated 12th July, 2012 has submitted that in the proceedings under Sections 391 to 394 of the Companies Act, the Income Tax Department has no locus standi to intervene. Considering the nature of objection, which the Income Tax Department has raised, I do not find it to be a fit case to summarily reject the objection of the Income Tax Department only on the issue of locus. 12. The Supreme Court in the matter of Miheer H. Mafatlal v. Mafatlal Industries Ltd., reported in (1997) 1 SCC 579 has laid down the broad contours of the jurisdiction of the Company Courts in granting the sanction to the Scheme as follows:-- (1) The Sanctioning Court has to see to it that all the requisite statutory procedure for supporting such a scheme has been complied with and that the requisite meetings as contemplated by Section 39(1)(a)have been held. (2) That the scheme put up for sanction of the Court is backed up by the requisite majority vote as required by Section 391 Sub-section (2). (3) That the meetings concerned of the creditors or members or any class of them had the relevant material to enable the voters to arrive at an informed decision for approving the scheme in question. That the majority decision of the concerned class of voters just and fair to the class as a whole so as to legitimately bind even the dissenting members of that class. (4) That all necessary material indicated by Section 393(1)(a) is placed before the voters at the meetings concerned as contemplated by Section 391, sub-section (1). That the majority decision of the concerned class of voters just and fair to the class as a whole so as to legitimately bind even the dissenting members of that class. (4) That all necessary material indicated by Section 393(1)(a) is placed before the voters at the meetings concerned as contemplated by Section 391, sub-section (1). (5) That all the requisite material contemplated by the proviso of sub-section (2) of Section 391 of the Act is placed before the Court by the applicant concerned seeking sanction for such a scheme and the Court gets satisfied about the same. (6) That the proposed scheme of compromise and arrangement is not found to be violative of any provision of law and is not unconscionable, nor contrary to public policy. For ascertaining the real purpose underlying the scheme with a view to be satisfied on this aspect, the Court, if necessary, can pierce the veil of apparent corporate purpose underlying the scheme and can judiciously X-ray the same. (7) That the Company Court has also to satisfy itself that members or class of members or creditors or class of creditors, as the case may be, were acting bona fide and in good faith and were not coercing the minority in order to promote any interest adverse to that of the latter comprising the same class whom they purported to represent. (8) That the scheme as a whole is also found to be just, fair and reasonable from the point of view of prudent men of business taking a commercial decision beneficial to the class represented by them for whom the scheme is meant. (9) Once the aforesaid broad parameters about the requirements of a scheme for getting sanction of the Court are found to have been met, the Court will have no further jurisdiction to sit in appeal over the commercial wisdom of the majority of the class, of persons, whom with their open eyes have given their approval to the scheme even if in the view of the Court there would be a better scheme for the company and its members or creditors from whom the scheme is framed. The Court cannot refuse to sanction such a scheme on that ground as it would otherwise amount to the Court exercising appellate jurisdiction over the scheme rather than its supervisory jurisdiction. The Court cannot refuse to sanction such a scheme on that ground as it would otherwise amount to the Court exercising appellate jurisdiction over the scheme rather than its supervisory jurisdiction. It is the commercial wisdom of the parties to the scheme, who have taken an informed decision about the usefulness and propriety of the scheme by supporting it by the requisite majority vote that has to be kept in view by the Court. The Court has neither the expertise nor the jurisdiction to delve deep into the commercial wisdom exercised by the creditors and members of the company, who have ratified the scheme by the requisite majority. Consequently, the Company Court's jurisdiction to that extent is peripheral and supervisory and not appellate. The Court acts like an umpire in a game of cricket, who has to see that both the teams play their game according to the rules and do not overstep the limits. But, subject to that how best the game is to be played is left to the players and not to the umpire. The supervisory jurisdiction of the Company Court can also be culled out from the provisions of Section 392. Of course this section deals with post-sanction supervision. But, the said provision itself clearly earmarks the field in which the sanction of the Court operates. The supervisor cannot ever be treated as the author or a policymaker. Consequently, the propriety and the merits of the compromise or arrangement have to be judged by the parties who as sub-juris with their open eyes and fully informed about the pros and cons of the scheme arrive at their own reasoned judgment and agree to be bound by such compromise or arrangement. 13. The objection raised by the Income Tax Department needs to be considered in the light of the nature of jurisdiction this Court is exercising under Sections 391 to 394 of the Companies Act, 1956 and the broad contours of the jurisdiction, which have been laid down by the Supreme Court in the matter of Miheer H. Mafatlal (supra). 14. This Court vide order dated 10-10-2012 had directed the Income Tax Department to submit the objections along with the supporting documents to the RD and the OL and the petitioner was also given opportunity to file response to those objections and RD and OL were directed to submit their reports on those objections. 14. This Court vide order dated 10-10-2012 had directed the Income Tax Department to submit the objections along with the supporting documents to the RD and the OL and the petitioner was also given opportunity to file response to those objections and RD and OL were directed to submit their reports on those objections. Accordingly, objections and response were submitted and RD as well as the OL have submitted their supplementary affidavit/report on those objections. 15. The RD has filed the report in the form of supplementary affidavit dated 10th December, 2012 after considering the objection of the Income Tax Department stating that the income of 190 crores has been accounted in the draft balance sheet of the petitioner-Company and that paper books contain bank statement of the petitioner-Company reflecting that the transactions have been done only through bank account of the petitioner-Company and in terms of Clause 7.1(c) of the Scheme, the transferee Company is answerable and accountable for tax including Income Tax paid or payable, if any, by the transferor Company for any income or profit derived from operation of the transferor Company after the appointed date and the same shall be payable by the transferee Company. It has further been stated in the report that on approval of the scheme by this Court and also in terms of other approved scheme by Hon'ble High Courts of Mumbai and Karnataka in respect of other seven companies, the transferee Company is entitled to settle all losses or profit of the transferor Company against its accumulated or current year loss/profits subject to the approval of the scheme. It has further been stated that the transferee Company-M/s. Shinano Retail P. Ltd. will remain in existence even after the present Scheme is approved by the Court, therefore, any enquiry can be conducted by the concerned Jurisdictional Authority as they deem fit and that no provision of the Companies Act, 1956 has been violated either in issuing zero coupon compulsory convertible debentures or acquiring shares in other Private Limited Companies. The RD has further stated that in respect of income of Rs. 190 crores, the Tax Authorities can conduct the further investigation as they may consider fit in respect of survey action against the transferee Company in terms of Clause Nos. The RD has further stated that in respect of income of Rs. 190 crores, the Tax Authorities can conduct the further investigation as they may consider fit in respect of survey action against the transferee Company in terms of Clause Nos. 6 and 7.1(c) of the Scheme and a direction can be issued to the transferee Company with reference to undertaking given in proceedings before the RD to co-operate in all respect with Income Tax Authorities. It has further been stated that the issues raised by the Income Tax Department have been examined by the Registrar of Companies, Gwalior with the help of an expert, i.e.. Chartered Accountant and on the basis of the expert opinion, there is no objection on approval of the Scheme. The reports of the Registrar of the Companies as well as the Chartered Accountant have been filed along with the supplementary affidavit of RD. It has been stated that the reports do not point out anything which is against the interest of the revenue to the Government or against the interest of the public and that an undertaking may be obtained from the transferee Company to owe the liability of tax, if any, of the transferor Company irrespective of the appointed date. As required by the said report the petitioner has filed an undertaking dated 18-12-2012 of the transferee Company/Shinano Retail Private Limited. 16. The OL, on the objection of the Income Tax Department has also submitted its supplementary report dated 7-12-2012 stating that the Scheme of amalgamation is not prejudicial to the interest of public. He has further stated that in terms of Section 396A of the Companies Act, the transferee Company and the Directors of the transferor Company be directed not to dispose of the books and papers of the transferor Company without prior permission of the Central Government. Accordingly, suitable directions have been issued in the operative part of this order. 17. Thus, in the supplementary affidavits/reports also, the RD and OL have not found the Scheme of merger to be against the public interest or against interest of revenue. 18. Accordingly, suitable directions have been issued in the operative part of this order. 17. Thus, in the supplementary affidavits/reports also, the RD and OL have not found the Scheme of merger to be against the public interest or against interest of revenue. 18. The objection of the Income Tax Department is that the Scheme of Amalgamation has been framed with the sole intention to evade the tax liability of the petitioner/transferor Company whereas the submission of the Counsel for petitioner is that on the merger of the transferor profit making company with the transferee loss making company, the losses will be set-off against profit, which is permissible in law and that does not furnish a ground for rejecting the Scheme. 19. It is the settled position in law that avoidance of tax liability by so arranging commercial affairs that the charge of tax is distributed is not prohibited. A tax payer may resort to a device to divert the income before it accrues or arises to him. The tax planning and arranging the affairs by the assessee in such a manner so that the tax burden is minimised is permissible, if the same do not contravene the provisions of the taxing statute. [See: Commissioner of Income Tax, Gujarat v. A. Raman and Company, (1968) 1 SCR 10 and Commissioner of Income Tax, West Bengal v. Calcutta Discount Co. Ltd., reported in (1974) 3 SCC 260 ]. The Supreme Court in the matter of Union of India and another v. Azadi Bachao Andolan and another, (2004) 10 SCC 1 has reiterated it by observing that:-- “147. We may in this connection usefully refer to the judgment of the Madras High Court in M.V. Valliappan v. ITO, which has rightly concluded that the decision in McDowell cannot be read as laying down, that every attempt at tax planning is illegitimate and must be ignored, or that every transaction or arrangement which is perfectly permissible under law, which has the effect of reducing the tax burden of the assessee, must be looked upon with disfavour. Though the Madras High Court had occasion to refer to the judgment, of the Privy Council in IRC v. Challenge Corpn. Ltd. and did not have the benefit of the House of Lord's pronouncement in Craven, the view taken by the Madras High Court appears to be correct and we are inclined to agree with it. 148. Though the Madras High Court had occasion to refer to the judgment, of the Privy Council in IRC v. Challenge Corpn. Ltd. and did not have the benefit of the House of Lord's pronouncement in Craven, the view taken by the Madras High Court appears to be correct and we are inclined to agree with it. 148. We may also refer to the judgment of the Gujarat High Court in Banyan and Berry v. CIT, where referring to McDowell, the Court observed:-- ‘The Court nowhere said that every action or inaction on the part of the tax payer, which results in reduction of tax liability to which he may be subjected in future, is to be viewed with suspicion and be treated as a device for avoidance of tax irrespective of legitimacy or genuineness of the act; and inference which unfortunately, in our opinion, the Tribunal apparently appears to have drawn from the enunciation made in McDowell case. The ratio of any decision has to be understood in the context, it has been made. The facts and circumstances, which lead to McDowell decision leave us in no doubt that the principle enunciated in the above case has not affected the freedom of the citizen to act in a manner according to his requirements, his wishes in the manner of doing any trade, activity or planning his affairs with circumspection, within the framework of law, unless the same fall in the category of colourable device which may properly be called a device or a dubious method or a subterfuge clothed with apparent dignity.’ 149. This accords with our own view of the matter.” 20. This accords with our own view of the matter.” 20. Learned Counsel for the Income Tax Department has placed reliance upon judgment of Gujarat High Court in the matter of Wood Polymer Ltd., (1977) 47 Comp.Cases 597 (Guj.) : (109 ITR 177 Guj) and has submitted that the Scheme may not be sanctioned since it has been framed to avoid tax liability whereas Bombay High Court in the matter of AVM Capital Services Private Limited in Company Scheme Petition No. 670/2011 vide judgment dated 12th July, 2012 has held that the decision of the Gujarat High Court in the case of Wood Polymer Ltd. (supra), is no longer a good law in view of the decision of the Supreme Court in the case of Azadi Bachao (supra), and Vodafone International Holdings v. Union of India and others, (2012) 341 ITR 1 (SC). 21. In Vodafone International (supra), the Supreme Court has held that all tax planning cannot be held to be illegal/illegitimate or impermissible. Thus, if by way of tax planning permissible in law the tax liability is sought to be reduced that would not come in the way of sanctioning the Scheme of Amalgamation but what is to be seen is that the Scheme ought not to have been framed with the sole object to evade the tax liability and it should not be-a-colourable device to evade the tax. 22. The Division Bench of the Gujarat High Court in the matter of Vodafone Essar Gujarat Ltd. v. Department of Income Tax in OJ Appeal No. 81/2010 in Company Petition No. 183/2009 by judgment dated 31-8-2012 has held that if the Scheme has been framed and is approved by the share-holders in their wisdom, it cannot be said that the Scheme itself is plotted with the sole criteria of tax avoidance simply because it may have effect and result into avoidance of tax. The Delhi High Court in the matter of M/s. Vodafone Essar Ltd. in Company Petition No. 334/2009, by the judgment dated 29-3-2011 has held that simply because the tax payable under the business structure adopted by the assessee, which he is otherwise entitled to adopt in law, is reduced, does not, ipso facto, make such adoption illegal or impermissible on the ground that it is opposed to the public interest. The Rajasthan High Court in the matter of In Re: Indo Continental Hotel, reported in (1990) 185 ITR 38 Raj. has held that expression (public interest) must take its colour and content from the context in which it is used and that whether the amalgamation Scheme is for the purpose of avoiding capital gains tax will depend upon fact of each case. The Rajasthan High Court further in the matter of In Re : Indo Continental Hotel and Resort Limited, reported in (1998) 93 Comp.Cases 194 Raj., considering the similar objection of the Income Tax Department has found that the merger was not with a view to escape tax liability and if there was any tax liability it can always be recovered by the Income Tax Department. 23. The Calcutta High Court in the matter of S.R.E.I. Infrastructures Finance Ltd, and another in Company Petition No. 288/2007 by the judgment dated 28th January, 2008 while considering the objection of the Central Government that the application for merger was filed to avoid payment of capital gains has held that the Central Government had not alleged violation of any provisions of the Companies Act and that avoidance by the Company of its tax liabilities will attract the provisions of the Income Tax Act and the companies cannot escape from their respective liabilities. The Scheme of arrangement between shareholders of the transferor and transferee Companies to conduct the management and the affairs of the company in a particular way must be honoured and if the Scheme of arrangement is just, fair, reasonable and commercial, it should be approved. This Court also in the matter of Kriti Plastics Private Ltd., in Re, reported in 1992 MPLJ 611 while considering the objection that Scheme of Amalgamation is a device to avoid capital gains tax has taken the view that if the Scheme of Amalgamation and the report of the OL together do not indicate positively that the sole purpose of the whole exercise of amalgamation is to avoid tax, then the Scheme cannot be rejected on this count. 24. Needless to say that if the Income Tax Authorities consider the amalgamation itself to be a device designed to evade the tax legitimately payable by the transferor Company they can do so, if permissible in law, in a separate proceedings under the IT Act. [See : Marshal Sons & Co. 24. Needless to say that if the Income Tax Authorities consider the amalgamation itself to be a device designed to evade the tax legitimately payable by the transferor Company they can do so, if permissible in law, in a separate proceedings under the IT Act. [See : Marshal Sons & Co. (India) Ltd. v. Income Tax Officer, (1997) 2 SCC 302 ]. The Bombay High Court in the matter of Reliance Communication Ltd. in Company Petition No. 487/2009, vide judgment dated 18th July, 2009, considering the objection about the breach of accounting standard has held that the Scheme of arrangement propounded by the company has to be tested on touch stone of the provisions of the Companies Act, which do not completely prohibit the deviation of accounting standards subject to the disclosures in terms of Section 211 of the Act and the authorities under the taxation law are not precluded from lifting the veil or to prosecute the companies for violation of the accounting standards and those matters will have to be proceeded on their own merits in accordance with law uninfluenced by the approval of the Scheme. 25. Learned Counsel for Income Tax Department has placed reliance upon the judgment of the Bombay High Court in the matter of A.V.M. Capital Services P. Ltd. in Company Scheme Petition No. 670/2011, dated 12th July, 2012, but, in that case also, the objection that the Scheme is a tax evading device, was rejected finding that the Scheme was not illegal, unlawful, dubious or colourful or a tax avoidance device. He has further placed reliance upon the judgment of the Supreme Court in the matter of Sesa Industries Ltd. v. Krishna H. Bajaj and others, (2011) 3 SCC 218 , but, in that case also, it has been held that the Court called upon to sanction a Scheme of Amalgamation would not act as a Court of Appeal and sit in judgment over the informed view of the parties concerned to the Scheme, as the same is best left to the corporate and commercial wisdom of the parties concerned, but the Court is obliged to examine the Scheme in its proper perspective together with its various manifestations and ramifications with a view to find out whether the Scheme is fair, just and reasonable to the members concerned and is not contrary to any law of public policy. 26. 26. Counsel for Income Tax Department has also placed reliance upon the judgment of High Court of Karnataka in the matter of Sasken Communication Technologies Ltd., In Re, reported in (2010) 155 Comp.Cases 463 (Kar), but, in that case also, the objection of the Registrar that the Scheme is in violation of the accounting standard was rejected. The Counsel for respondent has placed reliance upon the judgment of the Gujarat High Court in the matter of Amer Zinc Products P. Ltd., In Re, reported in 2009 (CC2) GJX 0747 Guj., in support of his submission that the effective date of the Scheme should be the date of the order passed by this Court, but, in that case, it was found that the statutory process for convening the meeting was initiated after the end of the accounting year, therefore, it was held that the appointed date provided in the Scheme beyond the date of beginning of such accounting year should not be accepted. 27. Learned Counsel for Objector has also relied upon the judgment of the Supreme Court in the matter of Hindustan Lever and another v. State of Maharashtra and another, dated 18th November, 2003 in Civil Appeal No. 8232 of 1996, but, in that case also the Supreme Court has held that while exercising the power in sanctioning the Scheme of Arrangement, the Court has to examine as to whether provisions of the statute have been complied with. Once the Court finds that the parameters set out in Section 394 of the Companies Act have been met, then the Court would have no further jurisdiction to sit in appeal over the commercial wisdom of the class of persons, who with their eyes open give their approval, even if, in the view of the Court better Scheme could have been framed. In that case, the Scheme was sanctioned on the condition that all pending proceedings by or against the transferor Company will continue by or against the transferee Company. In that case, the Scheme was sanctioned on the condition that all pending proceedings by or against the transferor Company will continue by or against the transferee Company. A reliance has also been placed on the judgment of this Court in the matter of Nilnita Chemicals Ltd., In Re: 1997 (CC2) GJX 004 MP, wherein this Court while sanctioning the Scheme had imposed the condition that if, as a result of transfer, any liability of capital gains arise against any company, or its share-holders or payment of tax which may be leviable under the existing laws, then the concerned authority shall be free to proceed in the matter of tax, in accordance with law, irrespective of the order of amalgamation. Learned Counsel for petitioner has expressed no objection in imposing such a condition in the present matter. 28. Thus, the Scheme of Amalgamation is required to be examined on the touch stone of provisions of Sections 291 to 294 of the Companies Act. The commercial wisdom of the share-holder of the transferor and transferee Companies in respect of the Scheme of merger normally need no interference. Scheme may not be sanctioned if it has been framed with the sole object or is a colourable device to evade the tax but, if as a result of the merger the tax liability is reduced, which is the consequence of the Scheme of merger, then on such a ground the sanction of the Scheme cannot be refused. However, in a given case, suitable condition can be imposed granting liberty to the Tax Authorities to proceed against the concerned company under the provisions of the Income Tax Act in accordance with law. 29. On the perusal of the Scheme, it is found 'that in terms of Clause 1.2 of the Scheme appointed date is 1st April, 2011 whereas in terms of Clause 1.3 the effective date is the last of the dates on which the certified copies of the orders of the High Courts sanctioning the Scheme of Amalgamation will be filed by the transferor Company and transferee Company with the concerned Registrar of the Companies having jurisdiction. Under Clause 6 of the Scheme, on and from the appointed date, all suits, actions and legal proceedings, pending by or against the transferor Company are to continue till the effective date as desired by the transferee Company and on and from the effective date against the transferee Company in the same manner and to the same extent as if the same had been instituted and/or pending against the transferee Company. In terms of Clause 7.1(c) of the Scheme all taxes paid or payable by the transferor Company in respect of its operation or profits of business upto the appointed date shall be on account of the transferor Company and insofar as it relates to the tax payment by the transferor Company in respect of profits or activities or operations of its business on or after the appointed date, the same shall be deemed to be the corresponding item paid by the transferee Company and shall, in all proceedings be dealt with accordingly. The above clauses of the Scheme suitably take care of the objection of the Income Tax Department. 30. It is also worth noting that the Regional Director as well as the Official Liquidator have in detail examined the objection of the Income Tax Department and they have not found that the proposed Scheme has been framed with the sole object to evade the tax. The RD had observed that an undertaking be obtained from the transferee Company to own the liability of tax of the transferor Company irrespective of the appointed date. Accordingly an undertaking has been filed. The supplementary report of the RD also indicates that the objection of the Income Tax Department was examined by the Registrar of Companies with the help of an expert CA and as per the report of the Registrar of Companies, there is no objection on approval of the Scheme. Similarly, the OL has also re-examined the Scheme in the light of the objection submitted by the Income Tax Department and has submitted the report before this Court pointing out the provision of Section 559(1) of the Companies Act, 1956 and submitted that in the event transferee Company fails to pay the tax liability, if any, of the transferor Company after amalgamation, the remedy is available to the Income Tax Department under the said provision. According to the OL also the Scheme is not prejudicial to the interest of the public. 31. In the present matter on the perusal of the Scheme, it is found that the Scheme has not been framed with the sole object to evade the tax but, the present Scheme of merger is a part of the larger Scheme of merger by which eight companies are merging in the transferee Company. It has been pointed out that in respect of seven other companies the different High Courts have already sanctioned the Scheme of merger. 32. It has further been noticed that since transferee Company Shinano Retail Private Limited is based at Bombay, the Company Scheme Petition No. 473/2012 connected with Company Summons for Direction No. 405/2012 under Sections 391 to 394 of the Companies Act was filed by the transferee Company in respect of the Scheme of merger before the Bombay High Court, which was allowed by the Bombay High Court vide order dated 18th September, 2012 by modifying the Clause 11.3 of the Scheme to the extent that "Securities premium account" in the said clause be read as "Capital Reserve" and the Scheme has been allowed to be amended accordingly. The Scheme has been sanctioned by the Bombay High Court subject to the order of this Court on the petition filed by the transferor Company. The petitioner has filed the affidavit before this Court accepting modification of the Scheme in the light of the order of the Bombay High Court and also the Resolution of the Board of Directors accepting the said modification approving amalgamation. The Bombay High Court has already found the Scheme to be fair and reasonable and not in violation of any provisions of law or contrary to the public policy. 33. Thus, I am of the opinion that the Scheme is fair and reasonable and not in violation of any provision of law or prejudicial to the interest of public, accordingly, the Scheme of Amalgamation as contained in Exh. H of the Company Petition is approved with the following conditions:-- (a) The Scheme is approved with the modification to the extent that in Clause 11.3 of the Scheme the word "securities premium account" be read as "capital reserve" and the scheme is allowed to be amended accordingly. H of the Company Petition is approved with the following conditions:-- (a) The Scheme is approved with the modification to the extent that in Clause 11.3 of the Scheme the word "securities premium account" be read as "capital reserve" and the scheme is allowed to be amended accordingly. (b) The transferee and the transferor Companies are directed not to dispose off the books and papers of the transferor Companies without prior permission of the Central Government. (c) The pending proceedings against the transferor Company under the Income Tax Act will be proceeded on their own merits in accordance with law uninfluenced by the approval of the present scheme and this order will not absolve the transferor and transferee Companies from liability of payment of taxes, which may be leviable under the existing taxing laws and transferee Company will co-operate in all respect 'with Income Tax Authorities in the pending proceedings. (d) All proceedings now pending by or against the transferor Company be continued by or against the transferee Company. (e) The present order of amalgamation will not absolve any of the, companies or its Director from the liability or breach of any law or control order, which might have been committed before the order of amalgamation. (f) Since the transferee Company has furnished an undertaking before this Court, therefore, the transferee Company owes the liability of the tax of the transferor Company irrespective of the appointed date. 34. Accordingly, the scheme of arrangement filed as Annexure H to the petition is hereby approved. The said scheme may be read as part of this order. The petitioner-Company to lodge a copy of this order and the scheme duly authenticated by the Company Registrar, High Court, Indore Bench with the concerned office of the Registrar of Companies within 30 days from the date of order. 35. The transferor Company to pay the cost of Rs. 25,000/- to the Official Liquidator for deposit in Common Pool Fund maintained by the Official Liquidator within four weeks from today and also to pay Rs. 10,000/- to the Regional Director within same period. 36. The petitioner (transferor Company) shall stand dissolved without winding up. 37. Filing and issuance of the drawn up order is dispensed with. All concerned authorities to act on a copy of this order along with the scheme duly authenticated by the Company Registrar, High Court, Indore Bench.