AI Drafter 
TaxTMI 
TaxTMI 
2015 (10) TMI 91
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....s or importers and distilleries, commission agents, etc. The particulars of the issued subscribed and paid-up share capital of the petitioner-company as on March 31, 2013, is as follows : Particulars Rupees Authorised share capital 395,000,000 equity shares of Rs. 10 each 3950,000,000 159,200,000 preference shares of Rs. 10 each 1592,000,000 Issued, subscribed and paid-up Total 5542,000,000 Particulars Rupees Issued, subscribed and paid-up share capital 130,794,968 equity shares of Rs. 10 each fully paid-up 1307,949,680 1307,949,680 Subsequent to April 1, 2013, the issued, subscribed and paid-up share capital of the petitioner-company has changed and the share capital as on November 1, 2013, of the petitioner-company is as under : Particulars Rupees Authorised share capital 395,000,000 equity shares of Rs. 10 each 3950,000,000 159,200,000 preference shares of Rs. 10 each 1592,000,000 Total 5542,000,000 Particulars Rupees Issued, subscribed and paid-up share capital 145,327,743 equity shares o....
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....une 16, 2014, at 4.15 p.m. The chairman submitted his report on June 18, 2014, vide annexure T to the petition. This petition was filed on July 19, 2014. By the order dated August 7, 2014, advertisement was taken out in The Hindu and Kannada Prabha. Notices were issued to the Regional Director and the official liquidator. 5. The Registrar of Companies has filed an affidavit on December 9, 2014. Various objections have been raised therein. It is stated that in terms of the notice dated August 28, 2014, issued to the Income-tax Department no objections were received. That the designated Stock Exchange namely, the Bombay Stock Exchange has accorded no objection to the draft scheme vide letter dated January 2, 2014. The company was also listed before the National Stock Exchange and the Bangalore Stock Exchange who have both accorded no objection by the letter dated March 25, 2014 and December 12, 2013, respectively. That no objection was furnished by the SEBI. Approval was also furnished by the Competition Commission of India. 6. In addition thereof, the Regional Director, has objected as follows :- That the petitioner-company has stated that the petitioner before this court i....
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.... again filed a second affidavit dated January 27, 2015. The Regional Director reiterates by placing reliance on the preamble to the scheme, that the scheme provides for transfer of the entire business of the petitioner-company by way of a slump sale. Slump sale is defined under the Income-tax Act. Neither slump sale nor demerger has been defined under sections 390 to 394 of the Companies Act. Since there is no express provision in section 180 of the Companies Act, requiring approval of the hon'ble High Court, such a sale does not require the approval of this court. Since the approval is not required under section 180 of the Act the same should not be granted by this court. The petitioner should appropriately invoke the provisions of section 180 of the Act. With regard to the appointed date, it is contended that if the appointed date is not shifted from April 1, 2013 to April 1, 2014, the same would amount to a violation of section 211 of the Companies Act. 9. The transferee company had filed a petition seeking approval of the scheme before the High Court of Madras for sanctioning of the scheme. By the order dated July 31, 2014, in Company Petition No. 2 of 2014 the same was ....
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....ectors to sell, lease or otherwise dispose off the whole or substantially the whole of the undertaking that would necessarily involve the sale of the undertaking also. Such a sale of the undertaking or such a lease or otherwise or disposal of the whole or substantially the whole of the company is very well defined under the provisions of sections 391 to 394 of the Act. When it is held that sections 391 to 394 is a code by itself necessarily it would have precedence over the other provisions of the Act. It is not the case where the provisions of section 180 of the Act are not being complied with and the scheme is sought to be sanctioned otherwise than in accordance with law. What is sought for is necessarily the sanction of the company court in terms of sections 391 to 394 of the Act. Therefore, it cannot be said that the non-compliance of section 180 would run contrary to the provisions of sections 391 to 394. In view of the judicial pronouncements of the High Courts as well as the Supreme Court reiterating the fact that sections 391 to 394 is a code, thereby other provisions of the statute not forming part and parcel of the code, necessarily the provisions of these sections would ....
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.... to implement the sanctioned scheme whose overall fairness and feasibility has been judged by the court under section 394 of the Act." Therefore, it cannot be said that the scheme as propounded by the petitioner is a scheme that does not fall under sections 391 to 394 but exclusively under the provisions of section 180 of the Act. Hence, I am of the considered view that the contentions regarding the applicability of section 180 cannot be accepted. In the facts and circumstances of this case the provisions of section 293 of the 1956 Act or section 180 of the 2013 Act would not be applicable to the case herein. Sections 391 to 394 alone would be applicable herein. (b) The further objection of the Regional Director is that it is not a scheme of amalgamation or reconstruction but a case of a complete sale. The preamble of the scheme itself narrates that it is a slump sale. The scheme being a slump sale the provisions of sections 391 to 394 would not be applicable. Learned counsel appearing for the petitioner submits that even assuming that the contention of the Regional Director is that it is not a sale or amalgamation or reconstruction but a slump sale, not only this court....
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....rs, mean the denial to the shareholders and the public knowledge about the financial position of the company because the amalgamation petition for some reason or the other may not be decided for quite some time." The Circular narrates that the objections raised by the Regional Director for filing of the accounts for the subsequent year being mandatory in terms of section 211 does not imply that the appointed date requires to be shifted to the date on which the scheme is approved. Under these circumstances, in view of the clarification by the Department of Company Affairs, the said objection cannot be sustained. 12. The objections of the Regional Director having been answered, I find no impediment to sanctioning the scheme. The terms of the proposed scheme would be beneficial to the transferor as well as the transferee company. That in terms of the proposed scheme the same would be beneficial to the petitioner as well Enrica with respect to the shareholders and the creditors. That the scheme would be in the interest of the creditors of the petitioner's-company and shareholders. All employees of the petitioner's-company would be deemed to be employees of Enrica, on the ....