Gujarat High Court
Echjay Industries Private Limited vs Respondent(S) on 20 January, 2016
Author: Abhilasha Kumari
Bench: Abhilasha Kumari
O/COMP/419/2015 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
COMPANY PETITION NO. 419 of 2015
In COMPANY APPLICATION NO. 368 of 2015
With
COMPANY PETITION NO. 420 of 2015
In COMPANY APPLICATION NO. 369 of 2015
TO
COMPANY PETITION NO. 424 of 2015
In COMPANY APPLICATION NO. 373 of 2015
================================================================
ECHJAY INDUSTRIES PRIVATE LIMITED....Petitioner(s)
Versus
......Respondent(s)
================================================================
Appearance:
MR NAVIN K PAHWA FOR THAKKAR AND PAHWA, ADVOCATES, ADVOCATE for
Petitioner(s) No. 1
MR KSHITIJ AMIN FOR MR DEVANG VYAS, ADVOCATE for Respondent(s) No. 1
================================================================
CORAM: HONOURABLE SMT. JUSTICE ABHILASHA
KUMARI
Date : 20/01/2016
COMMON ORAL ORDER
1. The present petitions are filed under the provisions of Sections391 to 394 of the Companies Act, 1956, seeking the sanction of this Court for Scheme of Amalgamation of Echjay Overseas Trade Private Limited, Hari Mahavin Investment Private Limited, Samarath Doshi Investment Company Private Limited, Vinodchandra Doshi Investment Company Private Limited and V.H.Doshi & Sons Investment Company Private Limited with Echjay Page 1 of 13 HC-NIC Page 1 of 13 Created On Fri Jan 22 02:17:03 IST 2016 O/COMP/419/2015 ORDER Industries Private Limited and their respective shareholders and creditors.
2. Echjay Industries Private Limited, the Transferee Company, filed Company Application No.368/2015, seeking dispensation of the meeting of the Equity Shareholders. The petitioner submitted that this being the Transferee Company, the meeting of the Creditors is not required to be held. By an order dated 30.11.2015, passed in Company Application No.368/2015, this Court ordered dispensation of the meeting of the Equity Shareholders and further ordered that this being the Transferee Company, the meeting of the Creditors is not required to be held.
3. Echjay Overseas Trades Private Limited, the Transferor Company, filed Company Application No.369/2015, seeking dispensation of the meeting of the Equity Shareholders of the petitionerCompany. By an order dated 30.11.2015, passed in Company Application No.369/2015, this Court ordered dispensation of the meeting of the Equity Shareholders. It is reported that there are no creditors of the petitionerCompany.
Page 2 of 13
HC-NIC Page 2 of 13 Created On Fri Jan 22 02:17:03 IST 2016
O/COMP/419/2015 ORDER
4. Hari Mahavin Investment Private Limited, the Transferor Company, filed Company Application No.370/2015, seeking dispensation of the meeting of the Equity Shareholders of the petitionerCompany. By an order dated 30.11.2015, passed in Company Application No.370/2015, this Court ordered dispensation of the meeting of the Equity Shareholders. It is reported that there are no creditors of the petitionerCompany.
5. Samarath Doshi Investment Company Private Limited, the Transferor Company, filed Company Application No.371/2015, seeking dispensation of the meeting of the Equity Shareholders of the petitioner Company. By an order dated 30.11.2015, passed in Company Application No.371/2015, this Court ordered dispensation of the meeting of the Equity Shareholders. It is reported that there are no creditors of the petitionerCompany.
6. Vinodchandra Doshi Investment Company Private Limited, the Transferor Company, filed Company Application No.372/2015, seeking dispensation of the Page 3 of 13 HC-NIC Page 3 of 13 Created On Fri Jan 22 02:17:03 IST 2016 O/COMP/419/2015 ORDER meeting of the Equity Shareholders of the petitioner Company. By an order dated 30.11.2015, passed in Company Application No.372/2015, this Court ordered dispensation of the meeting of the Equity Shareholders. It is reported that there are no creditors of the petitionerCompany.
7. M/s.V.H.Doshi & Sons Investment Company Private Limited, the Transferor Company, filed Company Application No.373/2015, seeking dispensation of the meeting of the Equity Shareholders of the petitioner Company. By an order dated 30.11.2015, passed in Company Application No.373/2015, this Court ordered dispensation of the meeting of the Equity Shareholders. It is reported that there are no creditors of the petitionerCompany.
8. It is submitted that all the Transferor companies are registered NBFCs with RBI and all the Transferor Companies have obtained No Objection Certificates from the RBI for the proposed merger, in compliance with RBI circular dated 09.07.2015.
9. The petitioners, thereafter, filed Company Page 4 of 13 HC-NIC Page 4 of 13 Created On Fri Jan 22 02:17:03 IST 2016 O/COMP/419/2015 ORDER Petition Nos.419 to 424 of 2015, seeking sanction of the Scheme of Amalgamation.
10. By separate orders dated 08.12.2015, this Court admitted the petitions and directed the issuance of notice to the Regional Director in the case of all the companies and notice to the Official Liquidator in the case of the Transferor Companies. This Court also directed the publication of the notice of the petition in the English daily newspaper 'Indian Express' and the Vernacular daily newspaper 'Lok SattaJan Satta', having circulation in Rajkot.
11. It is submitted that pursuant to the order dated 08.12.2015, the petitioners have published the notices of the petitions in the Gujarati daily newspaper 'Lok SattaJan Satta' and the English daily newspaper 'Indian Express', having circulation in Rajkot, on 15.12.2015. The Directors/Authorized Signatory of all the petitioner companies have filed affidavits dated 05.01.2016, respectively, in support of the publication of the advertisements.
Page 5 of 13
HC-NIC Page 5 of 13 Created On Fri Jan 22 02:17:03 IST 2016
O/COMP/419/2015 ORDER
12. In response to the notice issued, the Regional Director has filed a common affidavit dated 13.01.2016, making three observations. The first observation made by the Regional Director is with regard to the valuation report. It is stated in the report that though the valuer has recommended the Share Exchange Ratio, the working sheets for calculation of the share exchange ratio are not submitted. The second observation made by the Regional Director is with regard to the compliance of the Guidelines issued by RBI, from time to time. The third observation made by the Regional Director is with regard to the comments from the Income Tax Department. The report records that the office of the Regional Director has not received any adverse comments from the Income Tax Department. It is, however, stated in the report that the petitioner Companies may be directed to undertake the compliance of the Income Tax Act and Rules.
13. In response to the affidavit of the Regional Director dated 13.01.2016, the petitioner Transferee Company has filed an affidavit dated 19.01.2016, Page 6 of 13 HC-NIC Page 6 of 13 Created On Fri Jan 22 02:17:03 IST 2016 O/COMP/419/2015 ORDER giving its response to the observations of the Regional Director. It is submitted that the valuation report is prepared by the Firm of Chartered Accountants which contains all relevant details. The Regional Director has never asked for the working sheets. The valuation report is already supplied to him, which is referred by him in the report. Without prejudice, the petitioner has produced the working sheets of the calculation of Share Exchange Ratio, along with the affidavit.
14. With regard to the second observation, it is submitted that the petitioner Transferor Companies will be dissolved upon the sanction of the present Scheme. It is submitted that until dissolution, the petitioner Transferor Companies will ensure due compliance of the guidelines issued by the RBI, from time to time.
15. With regard to the third observation, it is submitted that the report of the Regional Director, itself, shows that pursuant to the letter of the Regional Director, no adverse remarks, within the Page 7 of 13 HC-NIC Page 7 of 13 Created On Fri Jan 22 02:17:03 IST 2016 O/COMP/419/2015 ORDER stipulated period of time, are received from the Income Tax Department. As per the circular dated 15.01.2014 issued by the Ministry of Corporate Affairs, it is stipulated that if no response is received from the Income Tax Department within a period of fifteen days from the receipt of the notice by the Regional Director, it may be presumed that the Income Tax Department has no objection to the action proposed under Sections391 to 394 of the Companies Act, 1956. In any case, and without prejudice to the above, the petitioner company submits that it would undertake the compliance of the Income Tax Act and the Rules made thereunder.
16. The Official Liquidator has filed separate reports dated 15.01.2016, in each of the Transferor Companies, making one observation which is with regard to the difference in amount of TDS. The Official Liquidator has requested this Court to direct the petitioner Transferor Companies to give a clarification on the observation/opinion of the Chartered Accountants with regard to difference in balances in three Mutual Funds Portfolio Accounts.
Page 8 of 13
HC-NIC Page 8 of 13 Created On Fri Jan 22 02:17:03 IST 2016
O/COMP/419/2015 ORDER
17. In response to the report of the Official Liquidator, each of the Transferor Companies have filed their separate affidavits dated 19.01.2016, stating that firstly, the observations made by the Chartered Accountants already forms a part of the note to accounts of the respective companies for the Financial Year 201415. It is further stated that even otherwise, the observations of the Official Liquidator are not adverse. It is submitted that the difference is only on account of the deduction made by the Transferor Companies towards Tax Deducted at Source on the professional fees paid to the Real Estate Portfolio Managers engaged by the Company for the purpose of Mutual Funds. It is further submitted that the petitionerTransferor Companies made provision of the professional fees payable to the Portfolio Managers as at the end of the financial ending 31.03.2015 and deducted the tax at source. The Portfolio Managers have shown the income less the amount of TDS in their books at the beginning of the present financial year. The figure as mentioned in Clause2 is the difference in time in booking the Page 9 of 13 HC-NIC Page 9 of 13 Created On Fri Jan 22 02:17:03 IST 2016 O/COMP/419/2015 ORDER payment of fees to the Portfolio Managers in the books of the respective Transferor Companies as compared to the time when the Real Estate Portfolio Managers have shown the income in their books. It is further submitted that this is the normal practice and the practice is also not in violation of any accounting standards.
18. It is further submitted that the reports, as such, confirm that the affairs of the Transferor Companies are not conducted in a manner prejudicial to the interest of their members or to the public interest. The Official Liquidator has, however, requested this Court to direct the petitioner Transferor Companies to preserve their books of accounts, papers and records and not to dispose of the records without the prior permission of Central Government under Section396A of the Companies Act, 1956.
19. Having heard Mr.Navin K. Pahwa, learned counsel for the petitioner companies, Mr.Kshitij Amin, learned Central Government Standing Counsel on behalf of Page 10 of 13 HC-NIC Page 10 of 13 Created On Fri Jan 22 02:17:03 IST 2016 O/COMP/419/2015 ORDER Mr.Devang Vyas, learned Assistant Solicitor General of India for the Regional Director and upon perusal of the reports of the Official Liquidator and the Regional Director, the reply filed on behalf of the petitioners and having considered the Scheme of Amalgamation together with the relevant documents on record, the Court finds it appropriate to grant sanction to the present Scheme of Amalgamation.
20. In view of the above, the Scheme of Amalgamation is sanctioned. It is, however, directed that the petitioner Transferor Companies shall preserve their books of accounts, papers and record and shall not dispose of the records without the prior permission of the Central Government under Section396A of the Companies Act, 1956.
21. The costs of all the petitions are determined at Rs.7,500/ each, payable to Shri Devang Vyas, learned Assistant Solicitor General of India. The petitioner Transferor Companies are directed to pay an amount of Rs.7,500/ each to the Official Liquidator.
22. The petitioner companies shall lodge a copy of Page 11 of 13 HC-NIC Page 11 of 13 Created On Fri Jan 22 02:17:03 IST 2016 O/COMP/419/2015 ORDER this order, the schedule of immovable assets of the petitioner Transferor Companies as on the date of this order and the Scheme duly authenticated by the Registrar, High Court of Gujarat, with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty, if any, on the same within 60 days from the date of the order.
23. The petitioners are directed to file a copy of this order along with a copy of the Scheme with the Registrar of Companies, electronically, along with requisite Form in addition to physical copy as per relevant provisions of the Act.
24. Filing and issuance of drawn up order is hereby dispensed with and all the authorities to act on a copy of this order along with the Scheme duly authenticated by the Registrar, High Court of Gujarat. The Registrar shall issue the authenticated copy of this order along with Scheme as expeditiously as possible.
25. The present petitions are disposed of, accordingly.
Page 12 of 13 HC-NIC Page 12 of 13 Created On Fri Jan 22 02:17:03 IST 2016 O/COMP/419/2015 ORDER (SMT. ABHILASHA KUMARI, J.) Gaurav+ Page 13 of 13 HC-NIC Page 13 of 13 Created On Fri Jan 22 02:17:03 IST 2016