Gujarat High Court
Acalmar vs Respondent(S) on 30 September, 2011
Author: K.M.Thaker
Bench: K.M.Thaker
COMP/167/2011 9 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD COMPANY PETITION No. 167 of 2011 In COMPANY APPLICATION No. 467 of 2011 To COMPANY PETITION No. 169 of 2011 In COMPANY APPLICATION No. 469 of 2011 ================================================= ACALMAR OILS & FATS LIMITED - Petitioner(s) Versus . - Respondent(s) ================================================= Appearance : MRS SWATI SOPARKAR for Petitioner(s) : 1, MR PS CHAMPANERI for Respondent(s) : 1, ================================================= CORAM : HONOURABLE MR.JUSTICE K.M.THAKER Date : 06/03/2012 COMMON ORAL ORDER
Heard Smt. Swati S. Soparkar, learned advocate for the petitioner company and Shri Iqbal A. Shaikh, learned counsel appearing for the Central Government.
2. These are the petitions filed by the petitioner companies for sanction of a Scheme of Arrangement in the nature of Amalgamation of Acalmar Oils and Fats Limited and Rajshri Packagers Limited with Adani Wilmar Limited, under section 391 read with Section 394 of the Companies Act, 1956. It has been contended that the commercial activities of all the three companies are similar in nature as all of them are engaged in processing and marketing edible oils. The two Transferor Companies are wholly owned subsidiaries of the Transferee Company. They have their refining units where variety of crude edible oils are refined and processed. The Transferee Company has wide spread marketing and distribution network and the products of all the companies are sold under popular brand names. The amalgamation is proposed in order to achieve synergic benefits. The petitions give in details the benefits envisaged due to the scheme.
3. It has been pointed out that vide the orders dated 30th September 2011 passed in the Company Application no. 467 & 468 of 2011, the meetings of the Equity Shareholders of the Transferor companies were dispensed with in view of the written consent letters from the holding company and its nominees being placed on record. Similarly vide the order dated 30th September 2011 passed in Co. Application No. 469 of 2011, the meeting of the Equity Shareholders of the Transferee Company was also dispensed with in view of the written consent letters from all of them being placed on record.
4. However, vide the aforesaid orders dated 30th September 2011, the meetings of the Secured and Unsecured Creditors of the two Transferor companies were directed to be convened to obtain their approval to the proposed scheme.
The said meetings were duly convened on 11th November 2011 and the Secured and Unsecured Creditors of both the Transferor companies approved the proposed scheme unanimously at the respective meetings. Thereafter, the petitions were moved for obtaining the sanction of the scheme from this court.
5. The substantive petitions were admitted vide order dated 23rd November 2011.
The public notices for the same were duly advertised in the newspapers 'Indian Express' English daily, and 'Sandesh' Gujarati Daily, both Ahmedabad editions dated 5th December 2011 and the publication in the Government gazette was dispensed with. Affidavits dated 9th December 2011 confirm the same. It is claimed and asserted by the petitioner that no one has come forward with any objections to the said petitions even after the publication. The same has been further confirmed by the additional affidavit dated 5th January 2012.
6. Notice of the petitions of the Transferor Companies were served upon the Official Liquidator attached to Gujarat High Court. Vide the respective reports dated 4th February 2012, filed by the Official Liquidator, it is observed that the affairs of the Transferor companies have not been conducted in a manner prejudicial to the interest of their members or to the public interest. However, the Official Liquidator has requested this court to direct the Transferor Companies to maintain its books of accounts and records for a period of 8 years from the date of sanctioning the scheme and not to dispose off the same without prior permission of the Central Govt.
The Transferor companies are accordingly directed to keep their books and records for a period of 8 years from the date of sanctioning the scheme and not to dispose off the same without prior permission of the Central Govt.
7. Notice of the petitions have been served upon the Central Govt. and Shri/Mr. Iqbal A. Shaikh, Standing Counsel appear for the Central Govt. An affidavit dt. 27th December 2011 has been filed by Mr. Kashmir Lal Kamboj, the Regional Director, (In- charge) North-Western Region, Ministry of Corporate Affairs, wherein some observations have been made. The same pertains to the compliance of the Accounting Standard-14 read with Sec. 211 (3A) of the Companies Act, 1956, by the Transferee Company and no directions being issued by this court for the meetings of the creditors of the Transferee Company.
In response to the said affidavit of the Regional Director, the attention of this court is drawn to the Additional Affidavit dated 5th January 2012, whereby the said issues have been dealt with. It has been submitted that Sec. 211 (3 B) of the Companies Act permits the non compliance of accounting standards and prescribes necessary disclosure requirements with regard to deviations, reasons thereof and financial effect thereof. The Transferee Company has chosen to opt for compliance with the provisions of Section 211(3B) and has undertaken to make necessary disclosures in its financial statements. It has been submitted that the said issue has been well settled in case of a Scheme u/s 391 by the view taken by the Hon'ble Bombay High Court in case of Hindalco Industries Limited, (151 Company Cases 446 (Bom), now largely followed even by this court. However, in the facts of the case and having regard to the provisions of the Scheme, particularly clause 10.1 to 10.3 of clause 10 of the proposed Scheme, the petitioner Transferee Company is hereby directed that the petitioner company shall make entries and adjustments and maintain the Accounts, Books and P & C Account as per Accounting Standard 14 read with Section 211(3A) of the Act and to not to resort to clause 10.5. It is clarified that in very rare and for unavoidable reason and circumstances, it is not possible to ensure that the profit and loss account and the balance sheet of the company comply with the accounting standards, then, in unavoidable circumstances, the Transferee company shall, upon Scheme being effective, disclose in its first profit and loss account and balance sheet, the following, namely:- the deviation from the accounting standards; the reasons for such deviation; and the financial effect, if any, arising due to such deviation.
8. With regard to the approval of the creditors of the Transferee Company, it has been submitted that the proposed scheme does not envisage any compromise or arrangement with the creditors of the Transferee Company.
It is asserted that the Transferee Company shall continue to exist and carry on its commercial activities even after the scheme is made effective. Moreover, all the three companies in the present Scheme are profit making companies, strong financial position and have substantial positive net worth. In view of the same, the rights and interests of the creditors of the Transferee Company are not likely to be affected in any manner and considering the facts and circumstances of the case, the court has not issued any directions with regard to the creditors of the Transferee Company. Further, it is relevant that despite the publication in the newspapers inviting objections to the proposed Scheme, none of the Secured or Unsecured Creditors of the Transferee Company have come up with any objections. This supports the submission of the petitioner that their rights and interests are not affected due to the Scheme and hence it is not necessary to issue any such directions to place their consent on record at this stage. In light of the above mentioned aspects and in view of the said explanation, the observation of the Regional Director does not survive.
9. In his affidavit, the Regional Director has, in light of the report of the Registrar of Companies, stated in para 2(c) that, any complaint and/or representation has not been received against the proposed Scheme. Learned counsel for the petitioner company has also submitted and asserted that pursuant to the advertisement published in the daily newspaper, any complaint or objection against the proposed Scheme are not received either from the shareholders or from the creditors or even from the public. Any shareholder or any creditor has not appeared before the Court also, even during the hearing of present petition, raising any objection against the proposed Scheme.
9.1 Having regard to the factual aspects recorded hereinabove and also considering the above mentioned fact that there are no objections against the proposed Scheme and in light of the report of the Regional Director and OL, there appears no reason to decline the sanction as prayed for by the petitioner company in respect of the proposed Scheme. The Regional Director also has, in para 2(d) of his report dated 27.12.2011 observed that:-
"2(d) .........
there appears no other objection to the proposed scheme of amalgamation of M/s. Acalmar Oils & Fats Ltd and M/s. Rajshri Packagers Ltd with M/s. Adani Wilmar Limited, the Petitioner Transferee company and, the scheme does not, prima facie, appear to be prejudicial to the interest of the shareholders of the Petitioner Transferor Company and the public at large."
10. Thus, on overall consideration, it has emerged that the proposed Scheme of Amalgamation would not be prejudicial to the interest of the companies and their members and creditors or public interest, prayers in terms of paragraph 22(a) of Company Petition Nos.167 of 2011 and 168 of 2011 and para 15(1) of Company Petition No.169 of 2011 are hereby granted and the Scheme in its modified form is hereby sanctioned, subject to the clarifications and directions in this order. It is also clarified that this order is also subject to compliance of all applicable provisions under all applicable laws, Rules and regulations including the provisions of Stamp Act & Registration Act and the petitioner shall, if required by law, pay, on implementation of Scheme, requisite stamp duty and get the order registered in accordance with applicable provision. The company shall also obtain all necessary permissions, licences, registrations, as may be required on implementation of the Scheme.
11. The petitions are disposed of accordingly. So far as the costs to be paid to the Central Govt. Standing Counsel is concerned, the same are quantified at Rs.7,500/- per petition. The same may be paid to the counsel appearing for the Central Govt. Cost of Rs. 5,000/- be paid to the Office of the Official Liquidator towards cost for the Transferor Companies.
(K.M.Thaker, J.) kdc