Indian Kanoon - Search engine for Indian Law

(iii) As on 31.03.2020, LVB had fixed assets of Rs.463,42,13,000/- and in comparison, DBIL had Rs.90,83,56,000/- Post amalgamation, DBIL had shown fixed assets of (2005) 7 SCC 627 (2002) 4 SCC 134 (2002) 3 SCC 137 (2011) 9 SCC 1 ____________ https://www.mhc.tn.gov.in/judis  W.P.No.17521 of 2020 & etc. Batch Rs.429,96,84,000/-, which would clearly portray that the appreciation of fixed assets is an addition in value because of the amalgamation. From Clause 5 of the impugned scheme and the proposal letter of DBIL dated 16.11.2020, it is clear that valuation of assets was not undertaken either by RBI or the DBIL, hence, market value of assets was never considered by the RBI before writing down the share value to zero, instead, DBIL was asked to do the “valuation of assets and determination of liabilities” under Clause 5 of the impugned scheme post amalgamation.

12.8. Unfortunately, in the present matter, neither the RBI nor the petitioners herein have undertaken comparative valuation of the shares of LVB and the DBIL. If the comparative valuation of the shares of the LVB and DBIL would have been undertaken, then a decision could have been taken with certainty about the swap ratio or whether the value of the shares has become zero. It was expected that before the amalgamation, the valuation of shares of both the transferor bank and the transferee bank ought to have been undertaken.

12.15. The RBI and DBIL contend that the share value would be zero on account of the LVB's net worth being negative. The same ____________ https://www.mhc.tn.gov.in/judis  W.P.No.17521 of 2020 & etc. Batch is based on the provision of Deferred Tax. Deferred Tax Liability can be interpreted as an asset and also a liability. Reliance is placed by the RBI on the Statutory Auditor report to contend that the Deferred Tax is a liability and the same has become the financial reserves of LVB, which would not permit them to make a tax liability from the reserves or surplus.