9911796707
TMI Blog2012 (11) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... e with Bhagyraaj. The scheme was framed under Section 391 of the Companies Act, 1956. The Company Judge dispensed with holding of meetings of the shareholders to ascertain their wish as all the shareholders consented to the scheme to be amalgamated as annexed to the said application. Accordingly, an advertisement was published inviting all concerned connected with this company to support or oppose the scheme to appear before His Lordship at the time of final sanction of the same. Central Government was also served through the Regional Director, Company Law Board. When the application came up for final sanction, His Lordship gave direction for filing affidavit by the Central Government. The Central Government initially filed affidavit statin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sists that such exercise has been conducted in the usual course and upon due compliance with the provisions of Companies Act, 1956. Of late, it has been noticed that the schemes are being used in course of a money laundering exercise in the sense that the transferor companies with share premia that do not justify the business or the activities of such companies are sought to be merged with transferee companies and there is an effective change of management, sometimes not in terms of the scheme but shortly after the scheme. In many cases the share premia accounts could be mere book entries without actual money passing from the transferor companies to the transferee company. In other cases, the position could be the other way round. Of late, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anction the scheme if he would feel so fit and proper. In the instant case, the Central Government did not ask for any direction upon the revenue intelligence for an enquiry. The Central Government was within their power to direct such enquiry to be made. The learned Judge could not have issued such directions suo motu, that too, without any basis whatsoever. Mr. Mookherjee contended, even if such investigation was carried, his clients would come out honourably from such process. However, this direction would carry bad impression in the commercial world and would operate as a stigma on the appellants that would give rise to the present appeal. 3. Mr. Mookherjee relied on the following decisions to support his contention that mere suspicion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 3. Mr. Mookherjee contended that the schedule did not include any of the provisions under the Corporate Law. 5. Opposing the appeal, Ms. Mamata Bhargava, learned counsel appearing for the Central Government contended, the Central Government was within its power to make queries and it was obligatory on behalf of the petitioners to satisfactorily reply to the same. So long the queries were not answered, the Central Government would not be in a position to accord their seal of approval to the scheme of amalgamation. She referred to the decision of the Apex Court of Sesa Industries Ltd. v. Krishna H. Bajaj [2011] 106 SCL 239 and the Delhi High Court decision in the matter of Vodafone Essar Ltd., In re [2011] 107 SCL 51 Mr. Mookherje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt who has vital role to play. In the instant case, despite advertisement being published none approached His Lordship. His Lordship asked the Central Government to submit their views. The Central Government on two occasions filed supplementary affidavit saying that they would not be in a position to do so in absence of assistance being extended by the applicants on two issues as referred to above. Hence, His Lordship was compelled to direct further investigation. If the applicants' intention was bona fide, they should have dispelled all the doubts that had arisen in the mind of the Registrar of Companies. Mr. Mookherjee would contend, the valuation report sent to the Registrar of Companies would deal with the respective share exchange rati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... real purpose underlying the scheme, the court can pierce the veil of apparent corporate purpose underlying the scheme and can judiciously X-ray the scheme. Where the court finds that the scheme is fraudulent and is intended for a purpose other than what it professes to be, it may be rejected even at the outset without calling a meeting of the creditors. The court does not function as a rubber stamp or post office, and it is incumbent upon the court to be satisfied that the scheme is genuine, bona fide and in the interest of creditors of the company." 9. The facts would not be identical to the present one as rightly contended by Mr. Mookherjee, we would however, rely on the observations of His Lordship and thus, quoted above, as abstract p ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
