TaxTMI 
TaxTMI 
2012 (12) TMI 1248
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....es are similar and interconnected in a complex manner. Most of the companies are engaged in variety of activities. They are profit making and dividend paying companies. It has been realized by the management of these companies that with the increasing competition, changing technologies and several other factors, it is necessary that each company concentrate in a given sphere of activities. It is therefore proposed that the activities of the companies be segregated on the basis of the product lines viz. MHE Division and Gears Division and under the present scheme of restructure by means of de-merger and transfer as well as slump sale, the specific activities be undertaken by specific companies instead of all the companies. It is envisaged that the proposed scheme and realignment of activities between these companies shall enable the companies to achieve operational and managerial efficiency; and increase in the ability to raise funds. It is envisaged that this will be beneficial to the respective companies, its shareholders, employees as well as creditors. The petitions give in detail the commercial advantages that would flow by virtue of the proposed de-merger. 3.(i) It has been s....
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.... Application No. 310 of 2012, filed by Elecon EPC Project Limited, the Second Resulting Company, being the wholly owned subsidiary of Elecon Engineering Company Limited, the meeting of the Equity Shareholders of the Company was dispensed with in view of the written consent letters from all its shareholders, approving the proposed scheme, being placed on record; 4. The substantive petitions for the sanction of the scheme were filed by all these companies which were admitted on 7th November 2012. The notice for the hearing of the petitions were duly advertised in the newspapers being ' Indian Express', English daily and 'Sandesh', Gujarati daily both Ahmedabad editions of 13th November 2012 and the publication in the Government gazette was dispensed with as directed in the said orders. Pursuant to the said publication in the newspapers, no objections were received by the petitioner or its advocate. 5. Notice of the petition have been served upon the Central Govt. and Shri Y.V. Vaghela, learned Central Government Counsel appears for the Central Govt. An affidavit dt. 5th December 2012 has been filed by Mr. Kashmir Lal Kamboj, the Regional Director, North-Western Region, Ministry of ....
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....ess General Finance and Investment Co. (2005) 62 SCL 574 (SC), Highland Distilleries Limited v. Shaw Wallace Distilleries Limited (2007) 76 SCL 352 (Allahabad High Court); Sutlej Industries Limited (2009) 89 SCL 73 (Rajasthan High Court). It has also been pointed out that recently, the Division Bench of Gujarat High Court has also taken the same view in the matter of Adishree Tradelinks Private Limited; being O.J. Appeal no. 31 to 34 of 2012, after considering all above judgments; and held that the Company is entitled to provide for the accounting treatment for such reserve arising out of the excess of net assets over the share capital issued by the Resulting Company as General Reserve and the same can be treated as free reserves for all purposes. 7. In view of the explanation given by the petitioner and considering the ratio laid down by this Court in O.J. Appeal No. 31 of 2012 and allied matters the objection raised by Regional Director deserves to be negatived. 8. It is pertinent to note that the Division Bench of this Court in the case of Adishree Tradelinks Private Limited, being O.J. Appeal No. 31 to 34 of 2012 has considered the identical observation as raised by the Regio....
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....d up bonus shares." 7.3 Learned Counsel for the appellants has also relied upon another decision of the learned Single Judge of this Court reported in "PARAMOUNT CENTRISPUN CASTINGS (P.) LTD.", [2010] 99 SCL 27 (Guj.), wherein in Para-19, it is held as under: 19. With regard to the accounting standard - 14 as discussed above, the legal position is also very clear. The Allahabad High Court in the case of Jagran T.V. Private Limited reported in 2009 90 SCL 138 has taken the view that with regard to accounting Standard - 14, a Statement was given in Delhi High Court that since the Transferor company will merge into the Transferee company, the Accounting Standard - 14 will be followed. The Court further derived support from the decision of the Hon'ble Supreme Court in the case of Bhagwati Developers Vs. Peerless General Finance and Investment Co. and Others reported in 2005 5 CLJ 377 (SC) wherein the Court was concerned with the question of bonus shares issued out of revaluation reserves. In this context it was observed that Section 205 of the Companies Act, 1956 provides that dividend can be only paid out of the profits. Proviso to sub-section 3 of Section 205 permits capitalis....