-: 1 :- IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY PETITION NO.473 OF 2008 CONNECTED WITH COMPANY APPLICATION NO.375 OF 2008 Hindustan Unilever Limited .. Petitioner/Demerged Company WITH COMPANY PETITION NO.474 OF 2008 CONNECTED WITH COMPANY APPLICATION NO.376 OF 2008 Brooke Bond Real Estates Private Limited .. Petitioner/Resulting Company IN THE MATTER of Scheme of Arrangement between Hindustan Unilever Limited, Brooke Bond Real Estates Private Limited and their respective Shareholders and Creditors for the demerger and transfer of certain immoveable properties of Hindustan Unilever Limited to Brooke Bond Real Estates Private Limited. Mr.Harinder Toor alongwith Ms Renuka Shetty i/b Crawford -: 2 :- Bayley & Co. for the Petitioners. Mr.S.Ramakantha, Dy. Official Liquidator. Mrs.Neeta Masurkar i/b Mr.S.K.Mohopatra for Regional Director. CORAM : S.A.BOBDE, J. DATE : 25th July, 2008. P.C.: 1. Heard learned counsel for the Parties. 2. The sanction of this Court is sought under Section 391 to 394 of the Companies Act, 1956 to the Scheme of Arrangement between Hindustan Unilever Limited, Brooke Bond Real Estates Private Limited and their respective Shareholders and Creditors for the demerger and transfer of certain immoveable properties of Hindustan Unilever Limited to Brooke Bond Real Estates Private Limited. 3. Counsel appearing on behalf of the Petitioner Companies has stated that they have complied with all requirements as per directions of this Court and they have filed necessary affidavits of compliance in the Court. Moreover, the Petitioner Companies also undertake to comply with all the statutory requirements, if any, as required under the Companies Act, 1956 and the Rules made -: 3 :- thereunder. 4. The Regional Director has filed Affidavit stating therein that Transferor Company and the Transferee Company should clarify how the shares are issued by the Resulting Company to the Demerged Company on the basis of book value of the Scheduled properties instead of valuing the scheduled properties at prevailing market rates. Counsel appearing on behalf of the Petitioner Companies has stated that under the Section 2(19AA)(ii) of the Income Tax Act, 1961, ‘the property and the liabilities of the undertaking or undertakings being transferred by the demerged company are transferred at values appearing in the books of account immediately before the demerger’. Further the Counsel appearing on behalf of the Petitioner Companies stated that under Section 2(19AA)(iii) of the Income Tax Act, 1961, "the resulting companies issues, in consideration of the demerger, its shares to the shareholders of the demerged company on a proportionate basis’. The Counsel appearing on behalf of the Petitioner Companies clarified that in order to avail of the Capital gain Tax exemption and to be covered under the definition of the term demerger under the Income Tax Act, 1961, the Demerged Unit will be transferred at the net book value and the equity and debt capital of the corresponding value shall be issued to the Company -: 4 :- pursuant to the Clause 13 of the Scheme to reflect the book value of the underlying assets of the Demerged Company. Considering the clarification given by the Counsel appearing on behalf of the Petitioner Companies, the objection raised by the Regional Director is not sustainable. The Resulting Company has undertaken to increase its authorized share capital to comply with the obligation of issue of shares to the Demerged Company under the Scheme and comply with the statutory obligations of Section 94/97 read with schedule X of the Companies Act, 1956, in respect of filing of necessary forms/documents with the Registrar of Companies after payment of necessary ROC fees and Stamp Duty as applicable. The undertaking is accepted. 5. Upon perusal of the entire material placed on records, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to any public policy. None of the Parties concerned have come forward to oppose the Scheme. Moreover the Regional Director has stated that the Scheme as proper and not prejudicial to the interest of Creditors and shareholders and public save and except as stated in paragraph 4 herein. 6. There is no objection to the Scheme and since all the -: 5 :- requisite statutory compliances have been fulfilled, Company Petition No.473 of 2008 filed by the Transferor Company and Company Petition No.474 of 2008 filed by the Transferee Company are made absolute in terms of prayer clauses (a) to (f) of the respective Petitions. 7. The Transferee Company to lodge a copy of this Order and the Scheme with the concerned Superintendent of Stamps for the purpose of adjudication of stamp duty payable, if any, on the same within 30 days of obtaining the certified copy and/or an authenticated copy of this Order. 8. The Petitioners in both the Company Petitions to pay cost of Rs.7,500/- each to the Regional Director. Costs to be paid within four weeks from today. 9. Filing and issuance of the drawn up order is dispensed with. 10. All authorities concerned to act on a copy of this Order alongwith Scheme duly authenticated by the Company Registrar, High Court, Bombay. S.A. Bobde, J.