Full Judgment Text
2015:BHC-OS:8236
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMPANY SCHEME PETITION NO. 99 OF 2015
WITH
COMPANY SUMMONS FOR DIRECTION NO. 892 OF 2014
In the matter of :
The Companies Act, 1956
And
In the matter of:
Sections 391 to 394 read with Sections
100 to 103 of the Companies Act, 1956
and Section 52 of the Companies Act,
2013.
And
In the matter of :
Thomas Cook Insurance Services (India)
Limited, a company incorporated under
the provisions of the Companies Act, 1956
and having its registered office at Thomas
Cook Building, Dr. D.N. Road, Fort,
Mumbai – 400 001.
And
In the matter of :
The Composite Scheme of Arrangement
and Amalgamation between Sterling
Holiday Resorts (India) Limited and
Thomas Cook Insurance Services (India)
Limited and Thomas Cook (India) Limited
and Their Respective Shareholders and
Creditors.
Thomas Cook Insurance Services
(India) Limited, a company
incorporated under the provisions
of the Companies Act, 1956 and
having its registered office at
Thomas Cook Building, Dr. D.N.
Road, Fort, Mumbai – 400 001 ……… Petitioner Company
WITH
COMPANY SCHEME PETITION NO. 100 OF 2015
WITH
COMPANY SUMMONS FOR DIRECTION NO. 891 OF 2014
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In the matter of :
The Companies Act, 1956
And
In the matter of:
Sections 391 to 394 read with Sections
100 to 103 of the Companies Act, 1956
and Section 52 of the Companies Act,
2013.
And
In the matter of:
Thomas Cook (India) Limited, a
company incorporated under the
provisions of the Companies Act, 1956
and having its registered office at
Thomas Cook Building, Dr. D.N. Road,
Fort, Mumbai – 400 001;
And
In the matter of:
The Composite Scheme of Arrangement
and Amalgamation between Sterling
Holiday Resorts (India) Limited and
Thomas Cook Insurance Services (India)
Limited and Thomas Cook (India)
Limited and Their Respective
Shareholders and Creditors.
Thomas Cook (India) Limited, a
company incorporated under the
provisions of the Companies Act,
1956 and having its registered
office at Thomas Cook Building,
Dr. D.N. Road, Fort, Mumbai –
400 001 ....Petitioner Company
Mr.Janak Dwarkadas, Senior Advocate with Mr.Rohan Rajadhyaksha i/b.
M/s.Rajesh Shah & Co. for Petitioners.
Mr.Shyam Mehta, Senior Advocate with S.I. Shah for Regional Director.
Mr.Arvind Pinto for Income-tax Department / Revenue.
CORAM : S.C. GUPTE, J.
2 JULY 2015
P.C. :
These petitions seek sanction of a composite scheme of
arrangement and amalgamation of Sterling Holiday Resorts (India) Ltd. (SHRIL),
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which is a transferor company, with Thomas Cook Insurance Services (India) Ltd.
(TCISIL), which is a resulting company (Resulting Company No.1) and Thomas
Cook (India) Ltd. (TCIL) which is another resulting company (Resulting Company
No.2), and their respective shareholders and creditors.
2 The transferor company, i.e. SHRIL, is a listed public company
engaged in the business of vacation ownership and leisure hospitality. The
company is primarily engaged in time share, resort business and holiday
activities. The two transferee or resulting companies, namely, TCISIL and TCIL,
are respectively engaged in the business of corporate agency for travel
insurance, and integrated travel and travel related services. Whereas TCIL is a
public limited company listed on the stock exchanges including BSE and NSE,
TCISIL is also a public limited but unlisted company. The scheme consists of two
parts, one of which ('Part B') consists of demerger of an undertaking of SHRIL
pertaining to the time share and resort business on a going concern basis from
SHRIL and its transfer and vesting in TCISIL, whilst the other part ('Part C')
consists of amalgamation of the residual undertaking of SHRIL (i.e. exclusive of
the demerged undertaking) with TCIL as a going concern. After demerger and
amalgamation as aforesaid, the scheme envisages dissolution of SHRIL on and
with effect from the effective date. The consideration of the demerger and
amalgamation, respectively, is allotment of 116 equity shares of TCIL of Re.1/-
fully paid up for every 100 equity shares of SHRIL of Rs.10/- fully paid up and 4
equity shares of TCIL of Re. 1/- to be paid up for every 100 equity shares of
SHRIL of Rs.10/-. In pursuance of an order passed by this Court on 20
September 2014 dispensing with convening and holding of the meetings of
equity shareholders, and secured and unsecured creditors, the transferee
companies have presented this scheme petition for sanction of this Court under
Sections 391 to 394 of the Companies Act, 1956.
3 The only opposition to the scheme is from the Regional Director,
Western Region, Ministry of Corporate Affairs, Mumbai. The opposition is on the
ground that having regard to the provisions of Section 394 of the Companies Act,
only a transferee company can allot shares towards consideration of transfer, and
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not any other person, whereas for demerger and transfer of the undertaking of
the resort business of SHRIL in the present case, the shares, namely, 116 equity
shares of Re.1/- for every 100 shares of Rs.10/- of SHRIL, have been allotted by
TCIL, which is a parent company of the transferee company, namely, TCISIL. It is
submitted that TCISIL, which is the resulting company insofar as the demerger
part is concerned, is not issuing any shares and therefore, the scheme is not in
consonance with the provisions of the Companies Act, 1956. Secondly, the
scheme is also against the provisions of Income-tax Act, 1961 having regard to
the definitions of 'demerger' and 'resulting company' contained in Section
2(19AA) and 2(41A) read with Section 2(19AAA) of the Income-tax Act. The
Income-tax Department's Counsel is present on notice and also supports the
objections raised by the Regional Director with reference to the provisions of the
Income-tax Act.
4 Mr.Mehta, learned Senior Counsel appearing for the Regional
Director, submits that the scheme in the present case consists of two separate
parts, Part B consisting of demerger and Part C consisting of amalgamation. It is
submitted that each of these parts must separately satisfy the requirements of
law insofar as the arrangement is concerned. It is submitted that whilst in the
case of amalgamation, shares of the transferee company are being allotted to the
shareholders of the transferor company, in the case of demerger, it is not the
shares of TCISIL, which is the resulting or transferee company, but the shares of
TCIL, which is a holding company of TCISIL, which are allotted to the
shareholders of the demerged company. It is submitted that such allotment is in
contravention of Clause (ii) of Section 394(1) of the Companies Act. Mr.Mehta
submits that the scheme, thus, being against the provisions of the Companies
Act, ought not to be sanctioned by this Court. Mr.Mehta further submits that the
demerger contained in the present scheme is not a demerger within the meaning
of Section 2(19AA) of the Income-tax Act read with Section 2(19AAA) and
2(41A). Mr.Mehta submits that it is stated in the scheme that the scheme
complies with all provisions of the Income-tax Act and this statement is not
correct, since the demeger contemplated in the scheme is not in accordance with
the definition of 'demerger' contained in the Income-tax Act. It is submitted that if
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this Court sanctions the scheme on the footing that it complies with the
requirements of Income-tax Act and thereby puts its imprimatur on the position
taken by the company regarding such compliance, the Income-tax Department
would be bound by the position and that the companies would be entitled to claim
tax benefits despite not being entitled to do so.
5 At the outset, we may deal with the objections raised with reference
to the provisions of the Income-tax Act. It is firstly to be noted that there is no
prohibition contained in the Income-tax Act to a scheme such as the one
proposed here. It is merely that if a scheme of arrangement, which is otherwise
permissible both under the Companies Act and the Income-tax Act, does not
amount to 'demerger' within the meaning of the Income-tax Act, it may have
certain tax implications for the companies in question. There is a provision in the
present scheme that the part of the scheme, namely, the demerger, has been
drawn up to comply with the conditions relating to demerger as specified under
Section 2(19AA) of the Income-tax Act 1961. The scheme at the same time
makes it clear that if any terms or provisions of the scheme are inconsistent with
the provisions of Section 2(19AA) of the Income-tax Act 1961, the provisions of
Section 2(19AA) of the Income-tax Act shall prevail and the scheme shall stand
modified to the extent, if necessary, to comply with Section 2(19AA). It is thus
very clear that the framing of the scheme and the corresponding sanction by this
Court do not in any way prejudice the application of Section 2(19AA) of the
Income-tax Act 1961. In any event, by sanctioning the present scheme, this Court
is not in any way accepting the company's case that the scheme, as framed,
complies with the provisions of 'demerger' within the meaning of 2(19AA). In fact,
this Court is inclined to clarify that the sanction of the scheme, as proposed by
this Court, does not in any way bind the Income-tax Department to take any
particular view of the scheme of arrangement sanctioned by this Court insofar as
the tax implications of the transaction are concerned. In the face of this
clarification, learned Counsel for Regional Director and Income-tax Department
have no further objections to the scheme on the ground of non-compliance with
the provisions of the Income-tax Act referred to above.
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6 Coming now to the main objection of the Regional Director to the
present scheme, namely, its non-compliance with Section 394 of the Companies
Act, it is pertinent to note at the very outset that provisions referred to in Clauses
(i) to (vi) of sub-section (1) of Section 394, which the Court may make whilst
sanctioning a scheme, are merely enabling provisions. The Company Court,
while sanctioning the scheme, may or may not make any of the provisions
contained in Clauses (i) to (vi) thereof. The provisions referred to in Clauses (i) to
(vi) are not in the nature of conditions for exercise of power of the company court
under Section 394. These enabling provisions, therefore, cannot be construed as
compulsory in any sense. Clause (ii) provides that if and to the extent the
compromise or arrangement provides for allotment or appropriation by the
transferee company of any shares, debentures, policies or other like interests in
that company as part of the consideration of the scheme, then the company court
while sanctioning the scheme may make appropriate provision in respect of such
allotment or appropriation. It is not that in every case the consideration for
transfer of an undertaking as part of a scheme of arrangement must come in the
form of an allotment of shares of a transferee company or for that matter
allotment of any shares. The consideration for such transfer can be any legitimate
consideration, which the transferor is entitled to accept for contract of transfer.
The scheme may, thus, not provide for any allotment of shares at all or provide
any other appropriate consideration including allotment of shares of a holding
company of the transferee company. Acceptance of any particular consideration
is part of the commercial wisdom to be exercised by the shareholders of the
transferor company. As long as such consideration is not against public interest
or in any other manner illegal or inappropriate, it is not for the company court to
accept or reject such consideration. That is the principle of the decision of the
1
Supreme Court in the case of Miheer Mafatlal vs. Mafatlal Industries Ltd.
7 It is not the case of the Regional Director that there is any harm to
public interest insofar as the transfer proposed in the scheme, or the
consideration provided therefor, is concerned. In fact, the Regional Director
makes it clear that there is no harm to public interest insofar as the present
1 1997 (1) SCC 579
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scheme is concerned. If that is so, it is not for this Court to reject the
consideration, which is accepted by the shareholders of the transferor company,
who are parties to the present arrangement.
8 This Court as well as other High Courts have accepted several
schemes where consideration for transfer of an undertaking is issued in the form
of shares of a company other than the transferee company. This Court, in the
2
case of Pantaloon Retail (India) Limited , approved a scheme of arrangement
between Pantaloon Retail (India) Limited and two resulting companies, Future
Mall Management Limited ('FMML') and Future Merchandising Limited ('FML')
and their respective shareholders and creditors, wherein FMML alone issued
shares to the shareholders of the demerged company. Similarly, in the case of
3
Keva Aromatics Private Limited amalgamation and arrangement between
Kelkar Investment Company Pvt.Ltd. and S H Kelkar and Company Pvt.Ltd.
('SHK') and Keva Aromatics Private Limited ('KAPL') and Keva Constructions
Pvt.Ltd. (KCPL) and their respective shareholders and creditors was approved by
this Court, where KAPL (one of the resulting companies) alone issued shares to
the shareholders of SHK in lieu of transfer of business to itself and KCPL. The
other courts including Delhi Court (in the case of Seven Wonders Holidays
4) 5
Private Limited and Andhra Pradesh High Court (in M/s.IVRCL Limited ) have
also approved similar schemes, where as part of the consideration for transfer of
undertaking, the shareholders of transferor company were issued shares by the
holding company of the transferee. Thus, after considering the merits of the
respective schemes in those cases, this Court as well as other High Courts have
thought it fit to approve of the schemes, making provisions for consideration in
terms of allotment of shares of companies other than the transferee companies
including, for that matter, the holding companies of the transferee companies.
9 In that view of the matter, there is no merit in the objection raised by
the Regional Director.
2 Company Scheme Petition No.338/2010 decided on 24.8.2010
3 Company Application No.455/2013 decided on 10.12.2013
4 Company Petition Nos.184 & 185 of 2010 decided on 1.8.2010 (Delhi High Court)
5 Company Petition Nos.58, 59, 60 and 61 of 2012 decided on 2 July 2012
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10 In the premises, both the scheme petitions are allowed
11 The Petitioner Companies are directed to lodge a copy of this order
and Scheme, duly authenticated by the Company Registrar, High Court (O.S.),
Bombay, with the concerned Superintendent of Stamps, for the purpose of
adjudication of stamp duty payable, if any, on the same within 60 days from the
date of receipt of the Order.
12 The Petitioner Companies are directed to file a copy of this order
along with a copy of the Scheme with the concerned Registrar of Companies,
electronically, along with E-Form INC 28 in addition to physical copy as per the
provisions of the Companies Act 1956 / 2013.
13 The Petitioner Companies in both the Company Scheme Petitions to
pay costs of Rs.10,000/- each to the Regional Director, Western Region, Mumbai
within four weeks from the date of the order.
14 Filing and issuance of the drawn up order is dispensed with.
15 All concerned regulatory authorities to act on a copy of this order
along with Scheme duly authenticated by the Company Registrar, High Court
(O.S.), Bombay.
(S.C. Gupte, J.)
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMPANY SCHEME PETITION NO. 99 OF 2015
WITH
COMPANY SUMMONS FOR DIRECTION NO. 892 OF 2014
In the matter of :
The Companies Act, 1956
And
In the matter of:
Sections 391 to 394 read with Sections
100 to 103 of the Companies Act, 1956
and Section 52 of the Companies Act,
2013.
And
In the matter of :
Thomas Cook Insurance Services (India)
Limited, a company incorporated under
the provisions of the Companies Act, 1956
and having its registered office at Thomas
Cook Building, Dr. D.N. Road, Fort,
Mumbai – 400 001.
And
In the matter of :
The Composite Scheme of Arrangement
and Amalgamation between Sterling
Holiday Resorts (India) Limited and
Thomas Cook Insurance Services (India)
Limited and Thomas Cook (India) Limited
and Their Respective Shareholders and
Creditors.
Thomas Cook Insurance Services
(India) Limited, a company
incorporated under the provisions
of the Companies Act, 1956 and
having its registered office at
Thomas Cook Building, Dr. D.N.
Road, Fort, Mumbai – 400 001 ……… Petitioner Company
WITH
COMPANY SCHEME PETITION NO. 100 OF 2015
WITH
COMPANY SUMMONS FOR DIRECTION NO. 891 OF 2014
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In the matter of :
The Companies Act, 1956
And
In the matter of:
Sections 391 to 394 read with Sections
100 to 103 of the Companies Act, 1956
and Section 52 of the Companies Act,
2013.
And
In the matter of:
Thomas Cook (India) Limited, a
company incorporated under the
provisions of the Companies Act, 1956
and having its registered office at
Thomas Cook Building, Dr. D.N. Road,
Fort, Mumbai – 400 001;
And
In the matter of:
The Composite Scheme of Arrangement
and Amalgamation between Sterling
Holiday Resorts (India) Limited and
Thomas Cook Insurance Services (India)
Limited and Thomas Cook (India)
Limited and Their Respective
Shareholders and Creditors.
Thomas Cook (India) Limited, a
company incorporated under the
provisions of the Companies Act,
1956 and having its registered
office at Thomas Cook Building,
Dr. D.N. Road, Fort, Mumbai –
400 001 ....Petitioner Company
Mr.Janak Dwarkadas, Senior Advocate with Mr.Rohan Rajadhyaksha i/b.
M/s.Rajesh Shah & Co. for Petitioners.
Mr.Shyam Mehta, Senior Advocate with S.I. Shah for Regional Director.
Mr.Arvind Pinto for Income-tax Department / Revenue.
CORAM : S.C. GUPTE, J.
2 JULY 2015
P.C. :
These petitions seek sanction of a composite scheme of
arrangement and amalgamation of Sterling Holiday Resorts (India) Ltd. (SHRIL),
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which is a transferor company, with Thomas Cook Insurance Services (India) Ltd.
(TCISIL), which is a resulting company (Resulting Company No.1) and Thomas
Cook (India) Ltd. (TCIL) which is another resulting company (Resulting Company
No.2), and their respective shareholders and creditors.
2 The transferor company, i.e. SHRIL, is a listed public company
engaged in the business of vacation ownership and leisure hospitality. The
company is primarily engaged in time share, resort business and holiday
activities. The two transferee or resulting companies, namely, TCISIL and TCIL,
are respectively engaged in the business of corporate agency for travel
insurance, and integrated travel and travel related services. Whereas TCIL is a
public limited company listed on the stock exchanges including BSE and NSE,
TCISIL is also a public limited but unlisted company. The scheme consists of two
parts, one of which ('Part B') consists of demerger of an undertaking of SHRIL
pertaining to the time share and resort business on a going concern basis from
SHRIL and its transfer and vesting in TCISIL, whilst the other part ('Part C')
consists of amalgamation of the residual undertaking of SHRIL (i.e. exclusive of
the demerged undertaking) with TCIL as a going concern. After demerger and
amalgamation as aforesaid, the scheme envisages dissolution of SHRIL on and
with effect from the effective date. The consideration of the demerger and
amalgamation, respectively, is allotment of 116 equity shares of TCIL of Re.1/-
fully paid up for every 100 equity shares of SHRIL of Rs.10/- fully paid up and 4
equity shares of TCIL of Re. 1/- to be paid up for every 100 equity shares of
SHRIL of Rs.10/-. In pursuance of an order passed by this Court on 20
September 2014 dispensing with convening and holding of the meetings of
equity shareholders, and secured and unsecured creditors, the transferee
companies have presented this scheme petition for sanction of this Court under
Sections 391 to 394 of the Companies Act, 1956.
3 The only opposition to the scheme is from the Regional Director,
Western Region, Ministry of Corporate Affairs, Mumbai. The opposition is on the
ground that having regard to the provisions of Section 394 of the Companies Act,
only a transferee company can allot shares towards consideration of transfer, and
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not any other person, whereas for demerger and transfer of the undertaking of
the resort business of SHRIL in the present case, the shares, namely, 116 equity
shares of Re.1/- for every 100 shares of Rs.10/- of SHRIL, have been allotted by
TCIL, which is a parent company of the transferee company, namely, TCISIL. It is
submitted that TCISIL, which is the resulting company insofar as the demerger
part is concerned, is not issuing any shares and therefore, the scheme is not in
consonance with the provisions of the Companies Act, 1956. Secondly, the
scheme is also against the provisions of Income-tax Act, 1961 having regard to
the definitions of 'demerger' and 'resulting company' contained in Section
2(19AA) and 2(41A) read with Section 2(19AAA) of the Income-tax Act. The
Income-tax Department's Counsel is present on notice and also supports the
objections raised by the Regional Director with reference to the provisions of the
Income-tax Act.
4 Mr.Mehta, learned Senior Counsel appearing for the Regional
Director, submits that the scheme in the present case consists of two separate
parts, Part B consisting of demerger and Part C consisting of amalgamation. It is
submitted that each of these parts must separately satisfy the requirements of
law insofar as the arrangement is concerned. It is submitted that whilst in the
case of amalgamation, shares of the transferee company are being allotted to the
shareholders of the transferor company, in the case of demerger, it is not the
shares of TCISIL, which is the resulting or transferee company, but the shares of
TCIL, which is a holding company of TCISIL, which are allotted to the
shareholders of the demerged company. It is submitted that such allotment is in
contravention of Clause (ii) of Section 394(1) of the Companies Act. Mr.Mehta
submits that the scheme, thus, being against the provisions of the Companies
Act, ought not to be sanctioned by this Court. Mr.Mehta further submits that the
demerger contained in the present scheme is not a demerger within the meaning
of Section 2(19AA) of the Income-tax Act read with Section 2(19AAA) and
2(41A). Mr.Mehta submits that it is stated in the scheme that the scheme
complies with all provisions of the Income-tax Act and this statement is not
correct, since the demeger contemplated in the scheme is not in accordance with
the definition of 'demerger' contained in the Income-tax Act. It is submitted that if
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this Court sanctions the scheme on the footing that it complies with the
requirements of Income-tax Act and thereby puts its imprimatur on the position
taken by the company regarding such compliance, the Income-tax Department
would be bound by the position and that the companies would be entitled to claim
tax benefits despite not being entitled to do so.
5 At the outset, we may deal with the objections raised with reference
to the provisions of the Income-tax Act. It is firstly to be noted that there is no
prohibition contained in the Income-tax Act to a scheme such as the one
proposed here. It is merely that if a scheme of arrangement, which is otherwise
permissible both under the Companies Act and the Income-tax Act, does not
amount to 'demerger' within the meaning of the Income-tax Act, it may have
certain tax implications for the companies in question. There is a provision in the
present scheme that the part of the scheme, namely, the demerger, has been
drawn up to comply with the conditions relating to demerger as specified under
Section 2(19AA) of the Income-tax Act 1961. The scheme at the same time
makes it clear that if any terms or provisions of the scheme are inconsistent with
the provisions of Section 2(19AA) of the Income-tax Act 1961, the provisions of
Section 2(19AA) of the Income-tax Act shall prevail and the scheme shall stand
modified to the extent, if necessary, to comply with Section 2(19AA). It is thus
very clear that the framing of the scheme and the corresponding sanction by this
Court do not in any way prejudice the application of Section 2(19AA) of the
Income-tax Act 1961. In any event, by sanctioning the present scheme, this Court
is not in any way accepting the company's case that the scheme, as framed,
complies with the provisions of 'demerger' within the meaning of 2(19AA). In fact,
this Court is inclined to clarify that the sanction of the scheme, as proposed by
this Court, does not in any way bind the Income-tax Department to take any
particular view of the scheme of arrangement sanctioned by this Court insofar as
the tax implications of the transaction are concerned. In the face of this
clarification, learned Counsel for Regional Director and Income-tax Department
have no further objections to the scheme on the ground of non-compliance with
the provisions of the Income-tax Act referred to above.
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6 Coming now to the main objection of the Regional Director to the
present scheme, namely, its non-compliance with Section 394 of the Companies
Act, it is pertinent to note at the very outset that provisions referred to in Clauses
(i) to (vi) of sub-section (1) of Section 394, which the Court may make whilst
sanctioning a scheme, are merely enabling provisions. The Company Court,
while sanctioning the scheme, may or may not make any of the provisions
contained in Clauses (i) to (vi) thereof. The provisions referred to in Clauses (i) to
(vi) are not in the nature of conditions for exercise of power of the company court
under Section 394. These enabling provisions, therefore, cannot be construed as
compulsory in any sense. Clause (ii) provides that if and to the extent the
compromise or arrangement provides for allotment or appropriation by the
transferee company of any shares, debentures, policies or other like interests in
that company as part of the consideration of the scheme, then the company court
while sanctioning the scheme may make appropriate provision in respect of such
allotment or appropriation. It is not that in every case the consideration for
transfer of an undertaking as part of a scheme of arrangement must come in the
form of an allotment of shares of a transferee company or for that matter
allotment of any shares. The consideration for such transfer can be any legitimate
consideration, which the transferor is entitled to accept for contract of transfer.
The scheme may, thus, not provide for any allotment of shares at all or provide
any other appropriate consideration including allotment of shares of a holding
company of the transferee company. Acceptance of any particular consideration
is part of the commercial wisdom to be exercised by the shareholders of the
transferor company. As long as such consideration is not against public interest
or in any other manner illegal or inappropriate, it is not for the company court to
accept or reject such consideration. That is the principle of the decision of the
1
Supreme Court in the case of Miheer Mafatlal vs. Mafatlal Industries Ltd.
7 It is not the case of the Regional Director that there is any harm to
public interest insofar as the transfer proposed in the scheme, or the
consideration provided therefor, is concerned. In fact, the Regional Director
makes it clear that there is no harm to public interest insofar as the present
1 1997 (1) SCC 579
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scheme is concerned. If that is so, it is not for this Court to reject the
consideration, which is accepted by the shareholders of the transferor company,
who are parties to the present arrangement.
8 This Court as well as other High Courts have accepted several
schemes where consideration for transfer of an undertaking is issued in the form
of shares of a company other than the transferee company. This Court, in the
2
case of Pantaloon Retail (India) Limited , approved a scheme of arrangement
between Pantaloon Retail (India) Limited and two resulting companies, Future
Mall Management Limited ('FMML') and Future Merchandising Limited ('FML')
and their respective shareholders and creditors, wherein FMML alone issued
shares to the shareholders of the demerged company. Similarly, in the case of
3
Keva Aromatics Private Limited amalgamation and arrangement between
Kelkar Investment Company Pvt.Ltd. and S H Kelkar and Company Pvt.Ltd.
('SHK') and Keva Aromatics Private Limited ('KAPL') and Keva Constructions
Pvt.Ltd. (KCPL) and their respective shareholders and creditors was approved by
this Court, where KAPL (one of the resulting companies) alone issued shares to
the shareholders of SHK in lieu of transfer of business to itself and KCPL. The
other courts including Delhi Court (in the case of Seven Wonders Holidays
4) 5
Private Limited and Andhra Pradesh High Court (in M/s.IVRCL Limited ) have
also approved similar schemes, where as part of the consideration for transfer of
undertaking, the shareholders of transferor company were issued shares by the
holding company of the transferee. Thus, after considering the merits of the
respective schemes in those cases, this Court as well as other High Courts have
thought it fit to approve of the schemes, making provisions for consideration in
terms of allotment of shares of companies other than the transferee companies
including, for that matter, the holding companies of the transferee companies.
9 In that view of the matter, there is no merit in the objection raised by
the Regional Director.
2 Company Scheme Petition No.338/2010 decided on 24.8.2010
3 Company Application No.455/2013 decided on 10.12.2013
4 Company Petition Nos.184 & 185 of 2010 decided on 1.8.2010 (Delhi High Court)
5 Company Petition Nos.58, 59, 60 and 61 of 2012 decided on 2 July 2012
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10 In the premises, both the scheme petitions are allowed
11 The Petitioner Companies are directed to lodge a copy of this order
and Scheme, duly authenticated by the Company Registrar, High Court (O.S.),
Bombay, with the concerned Superintendent of Stamps, for the purpose of
adjudication of stamp duty payable, if any, on the same within 60 days from the
date of receipt of the Order.
12 The Petitioner Companies are directed to file a copy of this order
along with a copy of the Scheme with the concerned Registrar of Companies,
electronically, along with E-Form INC 28 in addition to physical copy as per the
provisions of the Companies Act 1956 / 2013.
13 The Petitioner Companies in both the Company Scheme Petitions to
pay costs of Rs.10,000/- each to the Regional Director, Western Region, Mumbai
within four weeks from the date of the order.
14 Filing and issuance of the drawn up order is dispensed with.
15 All concerned regulatory authorities to act on a copy of this order
along with Scheme duly authenticated by the Company Registrar, High Court
(O.S.), Bombay.
(S.C. Gupte, J.)
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