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2015 DIGILAW 786 (GUJ)

In Re: Alpha Plastomers Private Limited v. .

2015-08-11

V.M.PANCHOLI

body2015
JUDGMENT V.M. Pancholi, J. 1. The present petitions are filed under the provisions of Sections 391 to 394 of the Companies Act, 1956, seeking sanction of this Court for the scheme of amalgamation of Prathmesh Polymers Private Limited with Alpha Plastomers Private Limited. 2. Alpha Plastomers Private Limited, the transferee company, filed Company Application No. 140 of 2015 seeking dispensation of the meeting of the equity shareholders of the petitioner. The petitioner further submitted that this being the transferee company, the meetings of the creditors is not required to be held. By an order dated 23.4.2015 passed in Company Application No. 140 of 2015, this Court ordered dispensation of the meeting of the equity shareholders, and further ordered that this being the transferee company, the meetings of the creditors is not required to be held. 3. Prathmesh Polymers Private Limited, the transferor company filed Company Application No. 139 of 2015 seeking dispensation of the meeting of the equity shareholders of the petitioner. By an order dated 23.4.2015 passed in Company Application No. 139 of 2015, this Court ordered dispensation of the meeting of the equity shareholders. It is further reported that there are no creditors of the petitioner company. 4. The petitioners thereafter filed Company Petitions No. 172 of 2015 and 173 of 2015 respectively, seeking sanction of the scheme of amalgamation. 5. By separate orders dated 6.5.2015, this Court admitted the petitions, and directed issuance of notice to the Regional Director in case of both the companies, and notice to the Official Liquidator in case of the transferor company. This Court also directed publication of notice of the petitions in English daily 'Indian Express' and Gujarati daily 'Gujarat Mitra', Surat editions. 6. It is submitted that pursuant to the order dated 6.5.2015, the petitioners have published the notices of the petitions in Gujarati daily "Gujarat Mitra" and English daily "Indian Express", having circulation in Surat on 18.5.2015. The authorized officers of all the petitioner companies have filed affidavits dated 26.5.2015 respectively in support of publication of advertisements. 7. In response to the notice issued, the Regional Director has filed a common affidavit dated 29.7.2015 making two observations. The first observation made by the Regional Director is with regard to Clause 12.2 of the scheme, which provides for accounting treatment of assets, liabilities and reserves of the transferee company. 7. In response to the notice issued, the Regional Director has filed a common affidavit dated 29.7.2015 making two observations. The first observation made by the Regional Director is with regard to Clause 12.2 of the scheme, which provides for accounting treatment of assets, liabilities and reserves of the transferee company. According to the Regional Director, the petitioner-companies have not complied with the requirements of Accounting Standard 14. The second observation made by the Regional Director is with regard to the comments coming from the Income Tax Department. According to the Regional Director, the petitioner Companies may be directed to undertake compliance of the Income Tax Act and Rules. 8. In response to the affidavit of the Regional Director dated 29.7.2015, and with regard to first observation, it is submitted on behalf of petitioner companies that upon reading Clause 12 of the scheme as a whole, it becomes clear that this clause is in accordance with AS-14. Without prejudice, it is submitted on behalf of petitioner companies that the petitioner companies will comply with the requirements of AS-14. So far as utilization of the reserves for the purpose of distribution of dividend is concerned, it is submitted that this issue is no longer res integra in view of the judgment of this Court in the case of Milestone Tradelinks Private Limited reported in (2013) 176 Com. Cases 337. It is thus submitted that in view of the above, this observation made by the Regional Director is not sustainable. 9. With regard to the second observation, it is submitted on behalf of petitioner companies that report of the Regional Director itself shows that pursuant to the letter of the Regional Director, no adverse remarks are received from the Income Tax Department. Without prejudice, the petitioner companies submit that they would undertake compliance of the Income Tax Act and the Rules made thereunder. 10. The Official Liquidator has filed his report dated 4.8.2015 in the transferor company. The report confirms that the affairs of the transferor company are not conducted in a manner prejudicial to the interest of their members or to the pubic interest. The Official Liquidator, however, has made one observation with regard to advancing interest free loans to the directors. The report of the Official Liquidator also makes reference to the reply dated 21.7.2015 given by the company. The Official Liquidator, however, has made one observation with regard to advancing interest free loans to the directors. The report of the Official Liquidator also makes reference to the reply dated 21.7.2015 given by the company. The Official Liquidator has also requested this Court to direct the petitioner to preserve its books of accounts, papers and records and not to dispose of the records without the prior permission of Central Government under Section 396A of the Companies Act, 1956. 11. Learned advocate Mr. Pahwa has relied upon the reply given by the company, and has submitted that both the companies are closely held, and are owned and controlled by same set of shareholders, who belong to the same family. It is submitted that there is no bar under the Act to advance interest free loan to the directors and the shareholders of the company. The company does not have any outside secured or unsecured creditor. As such, no outsider is affected by this transaction. It is thus submitted that in view of the reply given by the company, and as no further observation is made by the Official Liquidator, this Court may sanction the scheme. The affidavits in response to report of Regional Director dated 8th August 2015 are taken on record. 12. Having heard Mr. Navin K. Pahwa, learned counsel of the petitioner companies, Mr. Kshitij Amin for Mr. Devang Vyas, learned Assistant Solicitor General of India for the Regional Director, and upon perusal of the reports of the Official Liquidator and the Regional Director, and having considered the scheme of amalgamation together with relevant documents on record, this Court finds it appropriate to grant sanction to the present scheme of amalgamation. 13. In view of the above, the scheme of amalgamation is sanctioned. It is, however, directed that the petitioner shall preserve its books of accounts, papers and record and shall not dispose of the records without the prior permission of the Central Government under Section 396A of the Companies Act, 1956. 14. The cost of these petitions are determined at Rs. 7,500/- each payable to Shri Devang Vyas, learned Assistant Solicitor General of India. The petitioner transferor company is directed to pay an amount of Rs. 7,500/- to the Official Liquidator. 15. 14. The cost of these petitions are determined at Rs. 7,500/- each payable to Shri Devang Vyas, learned Assistant Solicitor General of India. The petitioner transferor company is directed to pay an amount of Rs. 7,500/- to the Official Liquidator. 15. The petitioner companies shall lodge a copy of this order, the schedule of immovable assets of the petitioner-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. 16. The petitioners 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 requisite form in addition to physical copy as per the relevant provisions of the Act. 17. Filing and issuance of drawn up order is hereby dispensed with, and all the 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 the scheme as expeditiously as possible. 18. The present petitions are disposed of accordingly.