9911796707
TMI Blog2010 (9) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... siness purchase agreement and its annexures thereof. In the said case the scope of the scheme of arrangement was wider than the proposed scheme of arrangement to revalue the assets of the Company alone. Revaluation of assets was only one part of the Scheme. Thus, the said order does not answer the question raised that the process of revaluation of assets of the company unitarily does not require any approval of the company court. In view of the said fact, the scheme of arrangement, as proposed by the petitioner-company, does not require any approval by this Court. Consequently, the present petition is dismissed with liberty to the petitioner for appropriate action on its own, in accordance with law - COMPANY PETITION NO. 62 OF 2010 (O& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flect true and fair view of the state of affairs of the petitioner-company. The land and buildings of the petitioner-company are over 40 years old and do not reflect their true net worth in the books of the petitioner-company. Part of the long term investments made by the petitioner-company have since also permanently diminished in value and are now unrealizable. The petitioner-company has substantial carried forward losses in the form of debit balance in the profit and loss account as shown in the assets side of the balance sheet of the petitioner-company, which has no value. Therefore, the scheme is designed for reconstruction of the petitioner-Company on the basis of estimated realizable values of its assets as on the appointed date. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner-company by restating the assets of the company on the basis of their estimated realizable values as on the Appointed Date." 6. On 1-7-2010, learned counsel for the petitioner-company has sought some time to support his argument that revaluation of the assets of the company falls within the scope of expression "arrangement" within the meaning of sections 390 and 391 of the Companies Act, 1956 (for short the Act ). 7. Learned counsel for the petitioner-company has argued that arrangement within the scope of section 391 of the Act, is wide enough to include re-valuation of assets. Therefore, the present scheme of arrangement falls within the scope of section 391 of the Act. It is also contended that the re-valuation of assets is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibed by the Central Government in consultation with the National Advisory Committee on Accounting Standards established under sub-section (1) of section 210A : Provided that the standards of accounting specified by the Institute of Chartered Accountants of India shall be deemed to be the accounting standards until the accounting standards are prescribed by the Central Government under this sub-section. ** ** ** 390. Interpretation of sections 391 and 393. In sections 391 and 393 : ( a )the expression, "company" means any company liable to be wound up under this Act; ( b )the expression "arrangement" includes a reorganization of the share capital of the company by the consolidation of shares of differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicial entity than its members. In terms of section 49 of the Act, all investments made by the company on its own behalf is required to be made in its own name. The property of the company is neither of the creditors nor of its members. The company by process of revaluation is increasing the net worth of its assets unilaterally. Therefore, it is neither a compromise nor arrangement, falling within clauses ( a ) and ( b ) of section 391 of the Act for which approval of the company court is required or contemplated. It is pure and simple accounting process permissible to be undertaken by the company in terms of section 211 of the Act. Therefore, the revaluation of assets simplicitor is not an arrangement falling within the scope of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny consideration, fees, incentives etc., payable to any employee or consultants in accordance with the business purchase agreement and its annexures thereof. In the said case the scope of the scheme of arrangement was wider than the proposed scheme of arrangement to revalue the assets of the Company alone. Revaluation of assets was only one part of the Scheme. Thus, the said order does not answer the question raised that the process of revaluation of assets of the company unitarily does not require any approval of the company court. 13. In view of the said fact, the scheme of arrangement, as proposed by the petitioner-company, does not require any approval by this Court. Consequently, the present petition is dismissed with liberty to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
