Calcutta High Court
Union Of India vs Tata Tea Limited & Anr on 16 June, 2008
Author: Surinder Singh Nijjar
Bench: Surinder Singh Nijjar
APOT No. 206 of 2008
ACO No. 38 of 2008
CP No. 123 of 2007
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
ORIGINAL SIDE
UNION OF INDIA Appellant
Versus
TATA TEA LIMITED & ANR. Respondents
For Appellant : Mr. L.K. Chatterjee, Advocate with Mr. A.K. Mondal, Advocate For Respondents: Mr. S.N. Mukherjee, Sr. Advocate with Mr. Ratnanko Banerji, Advocate and Mr. D.N. Sharma, Mr. A. Agarwal and Ms. M. Bhutoria, Advocates BEFORE:
The Hon'ble CHIEF JUSTICE SURINDER SINGH NIJJAR The Hon'ble JUSTICE PINAKI CHANDRA GHOSE Date : 16th June, 2008.
The Court : This appeal has been filed by the Regional Director challenging the order passed by the Company Court sanctioning the scheme. A perusal of the order impugned clearly shows that the entire case set out by the Central Government has been considered by the Company Court. It has been specifically noticed by the Company Court that the purpose for giving notice to the Central Government is to ensure that the Scheme sanctioned would not be against the public interest. The trial Court also 2 noticed the submission with regard to the Scheme being a method to avoid payment of capital gains.
In our opinion, this appeal has been filed by the Central Government by misconstruing the observations made by the Company Court. In the Conclusion, in paragraph 5.1 the Company Court had merely restated the submission of the Counsel for the Company that avoidance of the capital gains can be no reason for not sanctioning a scheme which is otherwise lawful or valid. The actual conclusion is based on the fact that the relevant pleadings with regard to avoidance of Capital Gain Tax have not been made in the representation filed on behalf of the Central Government. Merely an oral submission was made that there is likelihood of avoidance of Capital Gain Tax in case of scheme being sanctioned.
Learned Counsel for the appellant has relied on a judgment of the Gujarat High Court in Wood Plymer Ltd. vs. Bengal Hotels Pvt. Ltd., reported in 109 ITR 177. In our opinion, the aforesaid judgment is not applicable to the facts and circumstances of this case as therein on the basis of the pleadings of the parties the Court had come to a conclusion that the scheme of amalgamation ought not to have been sanctioned as the arrangement therein was for avoiding payment of capital gain tax. Therefore, the Court could not have come to the conclusion that the affairs of the company had been conducted in a manner prejudicial to the interest of the members or to the public interest. In the present case, 3 there is no factual basis pleaded in the representation of the Central Government. Only an oral submission was made that the arrangement had been made for avoidance of capital gain tax.
In such circumstances, the Company Court did not commit any error by ignoring the objection raised by the Central Government. We see no reason to interfere with the order passed by the Learned Single Judge.
The appeal is, accordingly, dismissed.
The undertakings, if any, given in the appeal is discharged. Xerox certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.
(SURINDER SINGH NIJJAR, CJ.) (PINAKI CHANDRA GHOSE, J.) SN.