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TMI Blog2008 (4) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... t be sustained as the valuation report has been prepared by a chartered accountant whose credentials have not been challenged. The valuation report has also not been challenged by any of the shareholder and there is no allegation against the chartered accountant and/or the valuation made. The court is to ensure that there is no malice or unreasonableness and the same does not appear in the instant case. The audited balance-sheet for March 31, 2006, was the only audited balance-sheet available and the same was also open for inspection, therefore, it cannot be said that the details of assets and liabilities were not known to the shareholders. Upon sanctioning of the scheme the applicants are directed to file appropriate application unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been filed by the Central Government and objections have been raised. Case of the Central Government: The Central Government has raised several objections which are as follows : As per clause 10( a ) of Part-Ill, Part-IV and Part-V of the Scheme, Estates A, B and C of petitioner No. 8 is to vest in petitioners Nos. 5, 6 and 7. Such vesting is in an out right sale without allotting shares to the shareholders and therefore is likely to result in loss of revenue. The second objection raised is with regard to non-furnishing of details of the properties, its book value or market value in the scheme. The third objection relates to the valuation report prepared which recommends allotment of shares at a high premium. The fourth o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts have been published regarding the holding of meetings and the sanctioning of scheme. Meetings have been held under chairpersons appointed by court in the case of petitioners Nos. 1 to 4 and 8. The scheme of amalgamation and the scheme of arrangement have been approved by the majority shareholders as will appear from the chairperson's report. From consent letters given by the shareholders of petitioners Nos. 5, 6 and 7 approval is also evidenced. No shareholder has challenged the said scheme of arrangement. There is no allegation of violation of any statutory provision. There is compliance of sections 391, 392 and 394 of the Companies Act, 1956. Each of the objections raised has been considered in earlier decisions and negatived. In re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, no complaint can be made with regard to the valuation report or non-furnishing of details of properties, their market value or book value. With regard to objection No. 3 the valuation report has not been challenged by any shareholder and the same cannot be challenged by the Central Government. For the said proposition reliance has been placed on Bengal Tea Industries Ltd. v. UOI [1989] 93 CWN 542 and Maknam Investments Ltd., In re [1996] 87 Comp Cas 689 (Cal). In respect of objection No. 4 petitioners Nos. 5, 6 and 7 are subsidiary companies of the petitioner No. 8 and transfer of any division will not attract stamp duty. For the said proposition reliance has been placed on Madhu Intra Ltd. v. Registrar of Companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of account as per the accounting standards prescribed by the Institute of Chartered Accountants of India, New Delhi. Conclusion: In view of the decision reported in A.W. Figgis Co. (P.) Ltd., In re [1980] 50 Comp Cas 95 (Cal), Miheer H. Mafatlal v. Mafatlal Industries Ltd. [1996] 87 Comp Cas 792 (SC) and the unreported decision in C. A. No. 259 of 2007 since reported as Celica Developers (P.) Ltd., In re ( No: 1 ) [2008] 145 Comp Cas 154 (Cal) and Celica Developers (P.) Ltd., In re ( No. 2 ) . The issuance of shares directly to the company will not amount to outright sale and at the most will attract the provisions of the Income-tax Act. Therefore the first objection is not sustainable. The second objection can also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the method of valuation been challenged, the sixth objection is not sustainable. Upon sanctioning of the scheme the applicants are directed to file appropriate application under clause 40A of the listing agreement in case of increase beyond the permissible limit. With regard to the seventh objection the applicants are ready and willing to increase the authorised share capital of the transferee company. In view of the unreported decision in APOT No. 542 of 2007 ( Areva T D India ltd. v. Union of India [2008] 144 Comp Cas 311 (Cal)) the eighth objection is rejected. The petitioner is also agreeable to maintain its books of account as per the accounting standard prescribed by the Institute of Chartered Accountants of India, New D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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