Bharani Pictures Pvt. Ltd. vs The Regional Director

COMP.A Nos. 235 to 238 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON
PRONOUNCED ON
23.09.2026
16.10.2026
CORAM
THE HON'BLE MR.JUSTICE K.KUMARESH BABU
COMP.A Nos. 235 to 238 of 2024
in C.P.Nos.263 to 266 of 2024
Bharani Pictures Pvt. Ltd.,
A company incorporated under the Companies Act
2013 and having its registered office at No.57,
Arcot Road, Salingramam, Chennai-600 091.
Represented by its Authorized Signatory
Bharani R Paluvai
..Applicant(s) in
COMP.A No. 235 of
2024
Banumathi and Ramakrishna
Properties Private Limited,
A company incorporated under the Companies Act
2013 and having its registered office at No.57,
Arcot Road, Salingramam, Chennai-600 091.
Represented by its Authorized Signatory
Bharani R Puluvai
..Applicant(s) in
COMP.A No. 236 of
2024
Bharani Studios LLP.,
a Limited Liability Partnership,
having its registered office at Old No.22, New
No.57, Arcot Road, Salingramam,
Chennai-600 093.
Represented by its Authorized Signatory
Bharani R Puluvai
..Applicant(s) in
COMP.A Nos. 237 &
238 of 2024
Vs
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COMP.A Nos. 235 to 238 of 2024
1. The Regional Director
Southern Region
Ministry of Coroporate Affairs
th
5 Floor, Shastri Bhavan,
26 Haddows Road,
Chennai- 600034.
2. The Registrar of Companies
Chennai Region
nd
Block No.6, B Wing 2 Floor,
Shastri Bhawan, 26 Haddows Road,
Chennai- 600034. …. Respondents in all
Comp.Applications
PRAYER in COMP.A No. 235 of 2024:- Company Application filed to recall
th
the order dated 7 day of August 2015 in C.P.No.263 of 2015, sanctioning the
Scheme of Arrangement (Demerger) between Bharani Pictures Private Limited
and Bhanumathi and Ramakrishna Properties Private Limited and Bharani
Studios Private Limited and Bharani Warehousing Private Limited.
PRAYER in COMP.A No. 236 of 2024:- Company Application filed to recall
the order dated 7th day of August 2015 in C.P.No.264 of 2015, sanctioning the
Scheme of Arrangement (Demerger) between Bharani Pictures Private Limited
and Bhanumathi and Ramakrishna Properties Private Limited and Bharani
Studios Private Limited and Bharani Warehousing Private Limited.
PRAYER in COMP.A No. 237 of 2024:- Company Application filed to recall
the order dated 7th day of August 2015 in C.P.No.265 of 2015, sanctioning the
Scheme of Arrangement (Demerger) between Bharani Pictures Private Limited
and Bhanumathi and Ramakrishna Properties Private Limited and Bharani
Studios Private Limited and Bharani Warehousing Private Limited.
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COMP.A Nos. 235 to 238 of 2024
PRAYER in COMP.A No. 238 of 2024:- Company Application filed to recall
the order dated 7th day of August 2015 in C.P.No.266 of 2015, sanctioning the
Scheme of Arrangement (Demerger) between Bharani Pictures Private Limited
and Bhanumathi and Ramakrishna Properties Private Limited and Bharani
Studios Private Limited and Bharani Warehousing Private Limited.
In all Comp.Applns.:-
For Applicant(s): Mr.P.H.Arvind Pandian
Senior Counsel
for Mr.Pawan Jhabakh
For Respondent(s): Mr.A.R.L.Sundaresan
Additional Solictor General
Assisted by Mr. K.Ramanamoorthy
Senior Panel Counsel
COMMON ORDER
Company Applications filed to recall the common order dated 07.08.2015
in C.P.Nos.263 to 266 of 2015, sanctioning the Scheme of Arrangement
(Demerger) between Bharani Pictures Private Limited and Bhanumathi and
Ramakrishna Properties Private Limited and Bharani Studios Private Limited
and Bharani Warehousing Private Limited.
2. Heard Mr.P.H.Arvind Pandian, learned Senior Counsel appearing for
Mr.Pawan Jhabakh learned counsel for the applicant(s) and
Mr.A.R.L.Sundaresan, learned Additional Solictor General assisted by Mr.
K.Ramanamoorthy, learned Senior Panel Counsel appearing for the
respondents.
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COMP.A Nos. 235 to 238 of 2024
3. Mr.P.H.Arvind Pandian, learned Senior Counsel appearing for the
applicant would submit that originally the Company by name Bharani Pictures
Private Limited had approached this Court for sanctioning a Scheme of
arrangement for demerger of the said Company and by order dated 07.08.2025,
the Scheme of arrangement was approved whereby three resulting Companies
came into being. On the Scheme being sanctioned by the Court, necessary
Forms were also filed with the Registrar of Companies. Allotment of shares and
the undertaking in the Scheme were all given effect to and recorded in the
Books of Accounts of the respective entity under the Scheme. He would further
submit that two of the resulting Companies were also converted into a Limited
Liability Partnership under the Limited Liability Partnership Act, 2008 in the
year 2020.
4. He would further submit, while that being so, the State of Tamil Nadu
st
under a Government order issued in G.O(Ms).No.29 dated 01 March 2019 and
a Government order in G.O.(Ms).No.47 dated 19.02.2020 had introduced Stamp
Duty and registration charges payable upon a Scheme of sanction. The
Government order in G.O.(Ms).No.47 stipulates an amount of 2% value of the
immoveable property or .6% of the aggregate market value of the share as
mandatory in respect of the transfer of assets under the sanctioned Scheme. In
that regard, a significant liability had been cast upon the Companies which
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COMP.A Nos. 235 to 238 of 2024
would have serious financial implications in the running of the Company.
Therefore, a decision was taken by the Board of the respective Companies for
recalling the Scheme of Merger, particularly taking into consideration the
commercial unviability which would be for the benefit and the welfare of the
Companies.
5. He would submit that all necessary consent affidavits of the respective
shareholders and the designated partners of the resulting companies have been
placed on record which could also be taken into consideration by this Court. He
would further submit that when there is no prejudice caused to anyone or there
is no malafidies, fraud and illegality shown, the Court exercising its power
could also recall the order which would only be in the interest of the company.
Taking through a decision of the Division Bench of this Court made in
OSA.Nos.152 & 153 of 1996, he would submit that the Hon’ble Division Bench
of this Court had interfered with the order rejecting the recall of the order which
is an inherent power vested with the Court to recall its order. Since, it has been
unanimously decided by the Board/ partners to fall back to the earlier
arrangement, it would be only in the interest of the Company and the
shareholders who have given their consent to recall the order of demerger.
Hence, he prays this Court to pass necessary orders recalling the order of this
Court.
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COMP.A Nos. 235 to 238 of 2024
6. Countering his arguments, the learned Additional Solicitor General
would submit that an order of demerger was made in the year 2015 which was
also acted upon resulting in formation of three resulting Companies. He would
submit that it had also been admitted to by the applicant that two of the resulting
Companies had converted themselves into a Limited Liability Partnership as
early as in the year 2020. In that regard, he would submit that the two resulting
Companies which had converted themselves as a Limited Liability Partnerships
are governed by the Limited Liability Partnership Act, 2008 and therefore, they
are not required to comply with the Provisions of the Companies Act relating to
accounting standards which is a mandatory requirement for a Private Limited
Company. If the request of the applicants are accepted, then the said two
resulting Companies which are converted into a Limited Liability Partnership
will be required to altered their structure again into a Private Limited Company
and align itself with the statutory compliances which in practical cannot be
complied with.
7. He would further submit that in view of the change of law casting a
liability on the Company in respect of transfer of its assets/ shares would itself
indicate that the attempt is to avoid payment of statutory dues and in that regard,
he would submit that the Court should not be a party for a litigant to avoid
payment of statutory dues which had come into being by change of law.
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COMP.A Nos. 235 to 238 of 2024
8. He would further distinguish the Division Bench judgment of this
Court relied upon by the learned Senior Counsel for the applicant by pointing
out that there was a concession made by the Registrar of Companies that there
would be no prejudice that could be caused or any public interest would be
affected. In the present case, he would submit that such confession is not
extended by the respondent and that apart, he would submit that the Scheme of
demerger was granted by this Court after giving wide publication about the
demerger and inviting objections and if the order is recalled, the sanctity given
to such procedure would be defeated. Hence, he prays this Court to dismiss the
application.
9. I have considered the submissions made by the learned counsels
appearing on either side and perused the materials available on record before
this Court.
10. An application had been taken out by a Private Limited Company
namely Bharani Pictures Private Limited for demerger of the said Company
which had resulted in three resulting Companies. Of the said three Companies,
two Companies voluntarily shred out the character of the company and had
taken a decision to convert itself into a Limited Liability Partnership governed
under the Limited Liability Partnership Act. The present applications have been
taken out on an admitted fact of the change of law that had come to live
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COMP.A Nos. 235 to 238 of 2024
pursuant to the Government Order issued by the Government of Tamil Nadu
introducing Stamp and Registration charges payable in respect of a Scheme of
amalgamation/ demerger. The purpose of the Scheme was to demerge the
Company namely Bharani Pictures Private Limited into three resulting entities.
After the Scheme of arrangement of demerger, the resulting Companies have
also been registered with the Registrar of Companies and two of the resulting
companies have voluntarily decided themselves to keep them away from the
Provisions of the Companies Act by converting themselves into a Limited
Liability which is governed under the Provisions of Limited Liability
Partnership Act. This would indicate that the sanction of demerger had been
fully given effect to.
11. The judgment of the Division Bench relied upon by the applicant, in
the view of the Court cannot be made applicable to the facts of the present case.
In the said case, immediately after the order of amalgamation, a decision had
been taken up by the Board not to give effect to the amalgamation and to
continue as individual Companies and in that regard, the effect of amalgamation
had not been come into being or given effect to. Further, as rightly pointed out
by the learned Additional Solicitor General, a concession had been given by the
respondents therein, who are also the respondents herein for recalling of the
order of amalgamation and there was no public interest that was involved. In the
present case, much water had flown after the Scheme of arrangement of
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COMP.A Nos. 235 to 238 of 2024
demerger had been sanctioned.
12. It is an admitted case that only to avoid a statutory liability, a
decision had been taken to take steps to recall the order. This Court would have
appreciated if the Scheme of arrangement had not been given effect to and an
application for recall in the Scheme of arrangement had been made. On
contrary, having enjoyed the benefits of Scheme of demerger and only to avoid
a liability, the present applications are made and in that regard, this Court is of
the view that the Court cannot be made a fait accompli to a litigant to avoid
payment of its statutory liability.
13. It is a well established principle that a Scheme need not be accepted if
it is found that there is an illegality or a fraud involved in the Scheme. In the
present case, this Court is of the view, the attempt that is being made for
recalling the order is to absolve themselves of a liability that had been casted
upon them by a change of law that came into being much after the Scheme of
arrangement had been acted by the parties. In that regard, if the Court allows the
recall of the order, it will be unlawful as it would enable the applicant to
circumvent their statutory liability.
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COMP.A Nos. 235 to 238 of 2024
14. For the aforesaid reasons, this Court does not find any merits in the
applications and accordingly, the applications stand dismissed. However, there
shall be no order as to costs.
16.10.2026
Index: Yes/No
Speaking/Non-speaking order
Neutral Citation: Yes/No
GBA
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COMP.A Nos. 235 to 238 of 2024
K.KUMARESH BABU J.
GBA
COMP.A Nos. 235 to 238 of 2024
in C.P.Nos.263 to 266 of 2024
16.10.2026
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