2016 (10) TMI 257 - HC - Companies Law

Scheme of Demerger embodied in the petition is sanctioned by this Court so as to be binding With effect from 1st April 2016 which is the appointed date, on the petitionerCompany and all their members and creditors and all other persons concerned pursuant to the provisions of Sections 391 to 394 of the Companies Act, 1956. That the petitionerCompany shall Within 30 days after the date signing of this order or Within such other time as may be permitted by this Honourable Court cause a certified copy of the order to be delivered to the Registrar of Companies, Gujarat at Ahmedabad for registration under Section 391 of the Companies Act, 1956. That any parties to the Scheme of Demerger and/ or any person or persons interested shall be at liberty to apply to this Court for any directions that may be necessary in regard to the working of the arrangement embodied in the Scheme of Demerger as sanctioned herein. This Court doth further order for payment of ₹ 10,000 as costs in each of this petition awardable to Mr. Devang Vyas, learned Additional Solicitor General of India.

Summary

Issues:
Petition for sanction of a Scheme of demerger involving two undertakings. Compliance with Income Tax Act and rules. Disclosure of assets and liabilities. Sanctioning of the Scheme of Demerger.

Analysis:
The petition was filed for the sanction of a Scheme of demerger involving two undertakings of the Demerged Company. The court noted that the requirement of holding meetings of shareholders and unsecured creditors was dispensed with due to written consents received. The meeting of the only secured creditor, State Bank of India, was held, and consent was obtained. The petition was admitted, and no objections were raised post-publication. A common affidavit highlighted the need for compliance with the Income Tax Act and rules, urging clear disclosure of all assets and liabilities proposed for transfer. The petitioner responded, stating no current income tax demands exist and ensuring the discharge of any future tax liabilities. The court found the Regional Director's observations did not hinder sanctioning the Scheme, as the petitioner's affidavits addressed the concerns, and no other objections were raised.

The court concluded that the Scheme of Demerger was in the interest of the company and its members, not prejudicial to public interest. Accordingly, the court sanctioned the Scheme, declaring it binding on the petitionerCompany, its members, creditors, and all concerned parties, effective from the appointed date of 1st April 2016. The court ordered the petitionerCompany to deliver a certified copy of the order to the Registrar of Companies for registration. Parties involved were granted liberty to seek necessary directions regarding the Scheme. Additionally, a cost of &8377; 10,000 was awarded to Mr. Devang Vyas, the learned Additional Solicitor General of India.