‘nit8i22, 947 PM Gujarat High Court Prateek vs Unknown on 10 May, 2011 Author: Anant S. Dave,&Nbsp; Gujarat High Court Case Information System Print com/zj2eit 6 6 THE HIGH COURT GUDARAT AT AHMEDABAD hitpssingiankanoon orgldect842127?Mype=print Prateek vs Unknown on 10 May, 201% Mobile Viow‘nitai22, 947 PM PETITION No. 2 of 211 In ‘company APPLICATION No. 396 of 2010 with company PETITION No. 3 of 2022 In CCOMPARY APPLICATION No. 397 of 2010 PRATEEK REALTY PVT LID = Petstioner(s) versus ~ Respondent(s) Appearance HRS SANGEETA N PAKWA For Petitioner(s) : 1, HPS CHAPANERE for Respondent(s) 4 conan hitpsiinciankanoon orgidect842127/Myps=print Prateok vs Unknown on 10 May, 2011 218‘nit8i22, 947 PM Prateek vs Unknown on 10 May, 201% HR. JUSTICE ANANT 5. DAVE 10/05/2011 omAL 1. The present petitions are filed seeking sanction of Scheme of Amalgamation proposed to be made between Prateek Realty Private Limited with Astron Developers Private Limited. 2. Prateck Realty Private Limited the transferor company, filed Company Application no, 396/2010 seeking dispensation of the meetings of equity shareholders, preference shareholders and unsecured creditors on the ground that consents of all the equity shareholders, preference sharcholders and unsecured creditors are obtained. It was stated on behalf of the petitioner that the petitioner does not have any secured creditor. This Court vide order dtd, 27.12.2010 made in Company Application No.396/2010 ordered dispensation of meetings of the equity sharcholders, preference sharcholders and unsecured creditors of the petitioner company. 3. Astron Developers Pvt Ltd, the transferee company, filed Company Application No.397/2010 seeking dispensation of the mecting of shareholders on the ground that consents of all the sharcholders are obtained, It was stated on bebalf of the petitioner that this being the transferee company, meeting of creditors is not requited to be held. This Court vide order dtd. 27.12.2010 made in Company Application No.397/2011 ordered dispensation of meeting of the shareholders of the petitioner company. This court further held that this being the transferee company, meeting of creditors was ordered not to be held. 4. The petitioners thereafter filed Company Petitions seeking sanction of the Scheme of Amalgamation. 5. This Court vide order dtd.17.01,2011 made the order of admission in both the petitions and directed issuance of notice to the Regional Director in case of both the companies and notice to the Official Liquidator in case of the Transferor Companies. This court also directed publication of notice of Petition in Gujarati Daily ‘Lok-Satta Jan-Satta! and English Daily ‘Indian Express’ both Ahmedabad Editions. 6. Pursuant to the order dtd.17.01.2011, the petitioners have published the notice of petition in Gujarati Daily Gujarati Daily ‘Lok-Satta Jan-Satt’ and English Daily ‘Indian Express' both Ahmedabad Editions fon 24.01.2011, The Directors of the petitioner companies have filed the affidavits in support of hitpssingiankanoon orgldect842127?Mype=print as‘nit8i22, 947 PM Prateek vs Unknown on 10 May, 201% publication of advertisements dated 04.02.2011, The affidavit also states that apropos to the advertisement neither the petitioner companies nor the advocate for the petitioners have received any objection against the sanction ofthe scheme. 7. Pursuant to the notice to the Official Liquidator in respect of the Company Petitions No.2 of 2011, the Official Liquidator has filed his report and made certain observations in para 9 of his report. The Petitioner of Company Petition No,2 of 2011 has filed an affidavit in response tothe report filed by the Official Liquidator. 8. tis stated on bebalf of the petitioner atthe outset that even after having made certain observations, the Official Liguidator has opined that the affairs of the Company are not conducted in a manner prejudicial to the interest of the Company or to public interest. Without prejudice to this opinion, the petitioner has submitted its response to the observation made by the Official Liquidator. 9. With regard to the first observation, wherein it is observed by the Official Liquidator that the propos: properties held by the transferor company, i is sated on behalf of the petitioner that both the transferor sasfer of immovable Amalgamation is to avoid payment of stamp duty at higher rate on and transferee company have large asset base and even afler incorporation, the transferee company has acquired certain further assets and also paid stamp duty on said purchases, Without prejudice, it is stated thatthe transferor company is a wholly owned subsidiary of the Transferee Company. Thus, the centie share capital of the Transferee Company is held by the Transferee Company. In the circumstance, the observations made with regard to the stamp duty would even otherwise lose its significance. Iti also stated that Scheme of Amalgamation is permissible under the provisions of Sec. 391-394 of the Act and the transfer involves the stamp duty as applicable to such Schemes. 10, With regard to second observation which pertains to the corporate guarantee it is stated on behalf of concemed petitioner that corporate guarantee was not mentioned as contingent liability in the audited balance sheet of the transferor company due to an inadvertent omission. However, it is stated that the contingent liability is required to be mentioned only by way of notes to the audited balance sheet. Furthermore, the corporate guarantee is not given by way of primary sccurity but the same is given only by way of collateral security. In the circumstance, non mentioning of the corporate guarantee as contingent liability would not have any bearing on the accounts of the Transferor Company. Without prejudice, itis reiterated that the Transferor Company is a wholly subsidiary of the ‘Transferee Company and therefore also, the non-disclosure ofthis corporate guarantee would make no difference in as much as the Transferee Company is the only shareholder of the Transferee Company. 11, With regard to third observation regarding non-filing of the consent letters of Lakshmi Vilas Bank Ltd. and Canara Bank, itis stated that these two banks are not the ereditors of the Transferor Company. {In the circumstance, there is no need to get consent letters ofthese two banks. 12, In response to the reply affidavit filed on behalf of the petitioner company in which the above referred explanation is given, no further rejoinder is filed on behalf of the Official Liquidator. The Official Liquidator however has requested that the transferor company be directed to preserve its books, papers and records for a period of 8 years from the date of sanctioning of scheme of amalgamation and not to dispose of the records without the prior permission of Central Government 1s, 396A of the Companies Act, 1956. 13, This court finds that each of the observations made by the Official Liquidator are explained properly by the petitioner, the court also finds that the Transferor Company is a wholly owned subsidiary of the Transferee Company and therefore, the Transferee Company is the only shareholder of the Transferor Company. Considering the totality of facts and circumstances, the observation made hitpssingiankanoon orgldect842127?Mype=print 46‘nitai22, 947 PM Prateek vs Unknown on 10 May, 2011 oon behalf of the Official Liquidator cannot be said to affect the scheme of amalgamation as proposed between the companies, 14, In response to the notice to the Regional Director, Western Region, Department of Company Alfirs, Shri Pankaj Champaneri, Ld. Assistant Solicitor General of India, has appeared and has filed an affidavit of the Regional Director dated 25.04.2011. A perusal of this affidavit would disclose that the office of the Regional Director has submitted that no complaint and/or representation has boon received in respect ofthe proposed scheme of amalgamation. 14, There are no objections received on the record of the present petitions. There are no other adverse circumstances against sanction of the Scheme. 16, In the facts and circumstances, the Scheme of Amalgamation as annexed at Annexure °C’ to the petitions is hereby sanctioned. It is however, observed that the transferor company will preserve its books, papers and records for a period of 8 years from the date of sanctioning of scheme of amalgamation and will not dispose of the records without the prior permission of Central Government tus, 396A of the Companies Act, 1956, With these observations, the Company Petitions are accordingly allowed, 17. The cost of Ld, Assistant Solicitor General of India is be quantified at Rs.7,500/- per petition Liberty is given to the Transferee Company to pay the amount of cost directly by drawing a Cheque in favour of Shri Pankaj Champaneti, Ld. Assistant Solicitor General of India. The cost of the office of Official Liquidator is quantified at Rs.5,000/- each in respect of the transferor companies. Liberty is given to the Transferee Company to pay the amount of cost directly by drawing a Cheque in favour of the Official Liquidator [ANANT'S. DAVE, J.] /smita/’ Top hitpsiinciankanoon orgidect842127/Myps=print 5