TaxTMI 
TaxTMI 
2007 (9) TMI 416
X X X X Extracts X X X X
X X X X Extracts X X X X
....for smooth and efficient management and for proper utilisation of resources. The petition has been advertised as is the usual practice and as required by the Companies Act, 1956, the Central Government has been served. An affidavit has been filed by the Regional Director, Eastern Region, Ministry of Corporate Affairs on behalf of the Central Government. The material paragraph in the Regional Director's affidavit reads as follows : "2. That it is submitted that on examination of the petition in detail and report of the Registrar of Companies, West Bengal, it appears that there is no complaint and representation received against the proposed scheme of amalgamation. The Central Government has, therefore decided, that the petition/application....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he profit and loss account in the books of GfK Mode." Clause 13(d) of Part II of the scheme provides for payment being made by the transferee company to external shareholders of the transferor companies from whom the shares of the transferor companies have been purchased. It appears that the word "external" has been used to imply shareholders other than those belonging to the group which is in management of all the five petitioning companies in these proceedings. In the chart set out under clause 13(d) of Part II of the scheme, the shares of three of the transferor companies have been shown to have been acquired by the transferee company at face value adding up to Rs. 2,200. The 670 shares held by the external shareholders of Mode Services....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d before March 31, 2007, or within such further period or periods as may be agreed upon between MAIPL, MMPL, MSPL and RIPL through and by its board of directors and GfK Mode through and by its board of directors (and which board of directors of each of the companies are hereby empowered and authorised to extend the aforesaid period from time to time without any limitations in exercise of their powers), this scheme shall stand revoked, cancelled and be of no effect, save and except in respect of any Act or deed done prior thereto as it contemplated hereunder or as to any right, liability or obligation which has arisen or accrued pursuant thereto and which shall be governed and be preserved or worked out as specifically provided in the scheme....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and a blanket sanction of court is sought to be obtained in a matter that the court may not be equipped to easily detect. It is required of the Central Government to ensure that accounting tricks in any proposed scheme are discerned and the matter is reported to court. Though the court looks into the scheme before sanctioning the same, if stakeholders, be they shareholders or Government Departments or creditors do not object, the court generally does not go through the individual terms of a scheme with a toothcomb to unearth anything untoward. By the time the court receives the petition for sanction, it would have been advertised and all and sundry would have been invited to oppose or support the scheme. The Central Government would have ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erlooked by the Regional Director and the notice of court was not drawn thereto. There have been matters in recent times where objections that ought to be taken by shareholders have been espoused by the Regional Director even in private limited companies where the concerned shareholders have not objected. There have been matters where typo graphical mistakes have been detailed in the affidavits filed by this Regional Director and mistakes in figures have been pointed out. In the light of the meticulous, and sometimes irrelevant, details that this Regional Director refers to in filing affidavits objecting to a scheme, it is difficult to appreciate how the substantially more important matters as found in clause 13 of Part II and clause 9 of P....