Bombay High Court
Indian Seamless Enterprises ... vs - on 15 September, 2015
Bench: S.J. Kathawalla
KPPNair 1 CSP-709 of 2014
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMPANY SCHEME PETITION NO.709 OF 2014
CONNECTED WITH
COMPANY SUMMONS FOR DIRECTIONS NO.632 OF 2014
In the matter of the Companies Act, 1956 (1 of
1956);
AND
In the matter of Sections 391 to 394 read with
ig Sections 52 of Companies Act, 2013 and Sections
100 of 103 of the Companies Act, 1956;
AND
In the matter of Scheme of Arrangement between
Indian Seamless Enterprises Limited (ISEL).
Indian Seamless Enterprises Limited, )
a Company incorporated under the Act and having its )
registered address at Lunkad Tower, Off. Nagar Road, )
Viman Nagar, Pune-411 014, Maharashtra, India )..Petitioner Company
Mr. Virag Tulzapurkar, Senior Advocate, along with Mr. Hemant Sethi, instructed by
M/s. Hemant Sethi & Co., for the Petitioner.
Mr. Shyam Mehta, Senior Advocate, along with Mr. C.J. Joy, for the Regional Director.
::: Uploaded on - 21/09/2015 ::: Downloaded on - 21/09/2015 23:00:23 :::
KPPNair 2 CSP-709 of 2014
CORAM; S.J. KATHAWALLA, J.
Judgment reserved on : 8th May, 2015
Judgment pronounced on: 15th Sept. 2015
JUDGMENT:
1. By this Petition filed under Sections 391 to 394 of the Companies Act, 1956
("the 1956 Act") the Petitioner seeks sanction of this Court to a scheme of
arrangement between the Petitioner and its Shareholders ("the Scheme"). By the
Scheme, the Petitioner seeks to make a gift of the shares held by the Petitioner in a
Company known as Taneja Aerospace and Aviation Limited ("TAAL") to its
Shareholders in the ratio of one fully paid up equity share of TAAL for one fully paid
up equity share of the Petitioner and one fully paid up equity share of TAAL for every
two partly paid up equity shares of the Petitioner. Pursuant to the gift of the aforesaid
equity shares of TAAL to its Shareholders, the Petitioner proposes to reduce the
balance lying in its Securities Premium Account ("SPA") by the book value of the
Petitioner's investment in the shares of TAAL as appearing in the books of accounts of
the Petitioner on the record date. The reduction of the SPA is sought in terms of the
provisions of Sections 100 to 104 of the 1956 Act read with Section 52 of the
Companies Act 2013 ("the 2013 Act"). The Board of Directors of the Petitioner
Company approved the Scheme at its Meeting held on 26th June 2014.
2. By an Order dated 8th August 2014 passed by this Court in Company Summons
for Directions No.632 of 2014, this Court convened Meetings of the Equity
KPPNair 3 CSP-709 of 2014
Shareholders and Unsecured Creditors of the Petitioner Company on 15 th September
2014 for the purpose of considering the Scheme. Since there were no secured
creditors of the Petitioner Company, no meeting of secured creditors was convened.
At the Meetings of the Shareholders and Unsecured Creditors the Scheme was
unanimously approved. Thereafter the Petitioner filed the present Company Scheme
Petition and served copies thereof on the Regional Director as well as the Registrar of
Companies, Pune and the concerned Income Tax Department. The Regional Director
has filed his Affidavit dated 6th January, 2015, placing on record his observations and
comments with regard to the Scheme. The Regional Director has objected to the
Scheme being sanctioned by this Court. The Petitioner Company has filed an Affidavit
dated 12th February 2015 in response to the Affidavit of the Regional Director seeking
to answer the objections of the Regional Director.
3. I have heard Mr. Virag Tulzapurkar, the learned Senior Counsel
appearing for the Petitioner and Mr. Shyam Mehta, the learned Senior Counsel
appearing for the Regional Director at some length. The Petitioner Company as well
as the Regional Director thereafter filed their Written Submissions in the matter dated
29th April, 2015 and 30th June, 2015 respectively.
4. Broadly speaking the Regional Director is objecting to the Scheme on the
following grounds :
a) The Scheme violates Section 205 of the 1956 Act and Section 123 of the
2013 Act, inasmuch as by gifting the shares of TAAL to its Shareholders,
KPPNair 4 CSP-709 of 2014
the Petitioner Company is in effect giving dividend to its Shareholders in
kind, which is prohibited by the aforesaid provisions.
b) The Scheme also violates Section 281 of the Income Tax Act, 1961 inasmuch as
in view of the pendency of certain demands and proceedings under the Income
Tax Act against the Petitioner Company, the proposed gift of the Petitioner's
shares in TAAL to its Shareholders would be void as against any claim in respect
of any tax or any other sum payable by the Petitioner on account of completion
of the aforesaid proceedings.
5.
Before dealing with the submissions of the Parties it is necessary to advert to
certain facts which are relevant for the purpose of deciding the controversy. The
Petitioner Company holds a certain number of shares of TAAL as an investment. The
book value of these shares as on 28th February 2014 (unaudited/provisional) is shown
as Rs.14,10,32,676/- i.e. Rs.12.86 per share. TAAL is a Listed Company and its shares
are traded on the Bombay Stock Exchange ("BSE"). From the information available
on the BSE portal the shares of TAAL were quoted at Rs. 50/- on 9 th October 2014,
Rs.82.55 on 11th December 2014 and Rs.86.40 on 26 th June 2015. The market value
of the shares of TAAL is therefore much higher than their book value. The Petitioner
Company has incurred a loss of Rs. 8,98,81,844/- as on 31 st March 2013. From the
unaudited/provisional financial statements as on 28 th February 2014 annexed to the
Petition, it appears that the Petitioner Company has made a profit of Rs.4,88,20,709/-
as on 28th February 2014 after adjusting certain exceptional items. Without this
KPPNair 5 CSP-709 of 2014
adjustment the Petitioner Company has incurred a loss of Rs.3,76,81,881/- as on 28 th
February 2014.
6. The concerned Income Tax Department has, after being served with a copy of
the Petition, examined the Scheme and furnished its comments and observations
thereon to the Regional Director. These comments and observations are contained in
the letter dated 27th October 2014 of the Dy. Commissioner of Income Tax, Central
Circle 2(1), Pune, addressed to the Regional Director. The Income Tax Department
has informed the Regional Director that the following proceedings are pending
against the Petitioner under the Income Tax Act :-
i) Assessment proceedings in respect of AY 2013-14 i.e. FY 2012-13;
ii) Outstanding demands of Rs.1,16,57,000/- and Rs.1,09,57,772/- in respect of
AY 2006-07 and AY 2007-08 respectively.
iii) Penalty proceedings in respect of AYs 2006-07 to 2012-13.
The Company has not disputed the fact that the aforesaid proceedings are
pending against it. The Income Tax Department has also objected to the Scheme
and prayed that the same ought not to be approved by the Court.
7. Coming to the objections of the Regional Director, his first and primary
objection is that the Scheme is violative of Section 205 of the 1956 Act corresponding
to Section 123 of the 2013 Act. Since Section 123 of the 2013 Act has come into
force, I will henceforth refer only to Section 123. Mr. Mehta, the learned Senior
KPPNair 6 CSP-709 of 2014
Counsel appearing for the Regional Director submits that the gift of the shares of
TAAL by the Petitioner Company to its Shareholders constitutes payment of dividend
by the Petitioner to its Shareholders. According to him Section 123 of the 2013 Act
prohibits the payment of dividend by a company to its shareholders otherwise than in
cash. He submits that by the Scheme the Petitioner is issuing dividend to its
Shareholders in the form of the shares of TAAL and that this amounts to payment of
dividend in kind, which is contrary to Section 123. Elaborating his submissions, Mr.
Mehta submits that the expression "dividend" in Section 123 has to be understood in
its ordinary sense. He submits that the definition of "dividend" in Section 2(35) of the
2013 Act is "dividend includes any interim dividend", and the same is an inclusive
definition and does not exclude from its purview the ordinary meaning of "dividend".
According to Mr. Mehta, the ordinary meaning of "dividend" will include the
distribution of any property of a company in kind amongst its shareholders. In
support of his contention Mr. Mehta relies upon the decisions of the Hon'ble Apex
Court in the case of Kantilal Manilal v/s CIT1 and in the case of CIT v/s Central India
Industries Ltd.2. He further submits that the market value of the shares of TAAL is
much higher than their book value and therefore there is no doubt at all that the
Petitioner is distributing the revenue or profit that it would have earned from the sale
of the shares of TAAL. He submits that once it is found that the gift of the shares of
TAAL by the Petitioner Company to its Shareholders amounts to payment of dividend,
1 (1961) 41 ITR 275
2 (1972) 3 SCC 311
KPPNair 7 CSP-709 of 2014
then this is a violation of the provisions of Section 123 and is therefore illegal. He
submits that it is well settled that a Scheme is required to comply with all laws
including the Companies Act and that consequently if the Scheme violates Section 123
of the 2013 Act the same is illegal and ought not to be sanctioned.
8. On the other hand Mr. Tulzapurkar, learned Senior Counsel appearing on behalf
of the Petitioner urged that Sections 391 to 394 of the 1956 Act are a complete code
and that under these sections a company is conferred with wide powers to undertake
any kind of scheme of compromise or arrangement with its shareholders, creditors
etc. including a scheme involving the distribution of shares to its shareholders. He
submitted that these powers cannot be taken away by the other Sections of the 1956
Act or the 2013 Act including Sections 105 and 123. He further submitted that
Sections 205 and 123 have no application in the present case. According to him
where a company has more than one mode available for corporate action, the choice
lies with the company. In the present case the Petitioner Company has opted for the
procedure under Sections 391 to 394 read with Sections 100 to 104 of the 1956 Act
which is a legally permissible procedure for the Petitioner Company to follow. He
further submits that once the Petitioner Company has adopted a legally permissible
procedure, there can be no violation of Sections 205 and 123. Hence it is the
submission of Mr. Tulzapurkar that the Petitioner Company had the option of
distributing its assets viz. the shares of TAAL amongst its Shareholders by following
the procedure under Sections 391 to 394 read with Sections 100 to 104 of the 1956
KPPNair 8 CSP-709 of 2014
Act, which is a legally permissible procedure under the 1956 Act and hence the
Scheme is in accordance with the law and cannot be said to be violative of Sections
205 or 123, and in fact the latter Sections have no applicability at all. In support of
his contentions, Mr. Tulzapurkar relied upon the decisions of this Court in SEBI v/s
Sterlite (India) Industries Limited 3 and PMP Auto Limited4 and the unreported decisions
of this Court in Tatanet Services Limited5, Zicom Electronic Security Systems Limited 6,
Balkrishna Industries Limited7, Balkrishna Paper Mills Ltd.8 and Balkrishna Synthetics
Ltd.9 He also relied upon the decision of the Hon'ble Apex Court in Miheer Mafatlal
v/s Mafatlal Industries Limited10.
9. Dealing with the argument of the Regional Director that the distribution of the
shares of TAAL by the Petitioner amongst its Shareholders constitutes payment of
dividend, Mr. Tulzapurkar submitted that the Regional Director's reliance on the
decisions of the Hon'ble Apex Court in the case of Kantilal Manilal (supra) and in the
3 (2003) 45 SCL 475 (Bom.)
4 (1995) 5 Comp LJ 598
5 Unreported decision of this Court (Vazifdar, J.) dated 3rd March, 2006 in Company Petition Nos. 758
and 759 of 2005
6 Unreported decision of this Court (Khanwilkar, J.) dated 23rd November, 2007 in Company
Petition No. 813 of 2007
7 Unreported decision of this Court (Bhosale, J.) dated 10th October, 2007 in Company Petition
Nos. 713 of 2007
8 Unreported decision of this Court (Bhosale, J.) dated 10th October, 2007 in Company Petition
Nos. 714 of 2007
9 Unreported decision of this Court (Bhosale, J.) dated 10th October, 2007 in Company Petition
Nos. 715 of 2007
10 (1996) 87 Com. Cas 792
KPPNair 9 CSP-709 of 2014
case of Central India Industries Limited (supra) is misconceived. He submitted that
both these decisions relate to proceedings under the Income Tax Act, and are based on
a special definition of "dividend" as provided in the Income Tax Act which was
different from the definition of "dividend" under the 1956 Act as well as the 2013 Act
and accordingly the said decisions of the Hon'ble Apex Court had no relevance in the
present case. He further submitted that it was not permissible for the Regional
Director to import the meaning of "dividend" as contained in the Income Tax Act into
the 1956 Act or the 2013 Act and that the said meaning could not be relied upon in
the context of the Companies Acts. He further submitted that the decisions of the
Hon'ble Apex Court in Kantilal Manilal (supra) and Central India Industries
Limited(supra) related to the taxability of dividend in the hands of shareholders and
not the company and that as far as the Companies Act is concerned, the distribution of
dividend should be considered from the company's perspective and not the
shareholders' perspective. In support of his submissions Mr. Tulzapurkar relied on the
decisions of the Hon'ble Apex Court in CIT v/s Nalin Behari Lal Singha11, Bangalore
Turf Club Limited v/s Regional Director Employees State Insurance Corporation 12,
Whirlpool Corporation v/s Registrar of Trade Marks, Mumbai 13, Union of India v/s R.C.
Jain14, State of Punjab V/s S.S. Singh 15, Ranjit Singh v/s State of Haryana and Pankaj
11 (1969) 2 SCC 310
12 (2009) 15 SCC 33
13 (1998) 8 SCC 1
14 (1981) 2 SCC 308
15 AIR 1961 SC 493
KPPNair 10 CSP-709 of 2014
Mehra v/s State of Maharashtra 16 . Mr. Tulzapurkar also relied on an order passed by
this Court in the case of KEC Infrastructures Limited17 on 27th September 2005,
sanctioning a Scheme involving the distribution of shares by KEC International
Limited in KEC Infrastructure Limited to the shareholders of KEC International
Limited and submitted that the case was similar to the present one and that this Court
had already sanctioned a similar scheme in the past. Mr. Tulzapurkar further relied
upon an Order dated 22nd September 1995 passed by the Hon'ble Calcutta High Court
in the case of Bata Properties Limited18. For all these reasons Mr. Tulzapurkar
submitted that the objections of the Regional Director on this count are untenable and
are liable to be rejected.
10. Mr. Mehta, the learned Senior Counsel appearing for the Regional Director in
response to the submissions of Mr. Tulzapurkar submitted that every scheme of
compromise and/or arrangement under Sections 391 to 394 of the 1956 Act was
required to comply with all laws and that the Companies Act was no exception. In
other words, according to him the Scheme, even though framed under Sections 391 to
394 read with Sections 100 to 104 of 1956 Act, was also required to comply with the
other provisions of the 1956 Act as well as the provisions of the 2013 Act. Merely
because the Scheme was formulated under Sections 391 to 394 read with Sections
16 (2000) 2 SCC 756
17 Unreported decision of this Court (A.M. Khanwilkar, J.) dated 27th September, 2005 in Company
Petition No. 416 of 2005
18 Unreported decision of Calcutta High Court (Baboo Lall Jain, J.) dated 18th September, 1995
in Company Petition No. 300 of 1995.
KPPNair 11 CSP-709 of 2014
100 to 104 of the 1956 Act, it does not mean that the Scheme could violate the other
provisions of the 1956 Act or the provisions of the 2013 Act. He submitted that none
of the decisions relied upon by Mr. Tulzapurkar suggest that a Scheme under Sections
391 to 394 need not comply with the other provisions of the 1956 Act or the
provisions of 2013 Act or that such a Scheme can violate the aforesaid provisions, and
therefore the said decisions cited by Mr. Tulzapurkar did not assist the Petitioner's
case. Mr. Mehta further submitted that he was not relying on the meaning of
"dividend" as contained in the Income Tax Act to support his argument that the
Scheme was violative of Section 123 of the 2013 Act, in that the Petitioner Company
was issuing dividend in kind by gifting the shares of TAAL to its Shareholders, but he
was relying on the ordinary meaning of the word "dividend". He submitted that the
ordinary meaning of "dividend" was not excluded from the definition of "dividend"
contained in either the 1956 Act or the 2013 Act, or for that matter the Income Tax
Act. According to him, in the decisions of the Hon'ble Apex Court in Kantilal Manilal
(supra) and Central India Industries Limited (supra), the Hon'ble Apex Court had
considered the ordinary meaning of the word "dividend" and held that the distribution
of assets by a company in kind will also amount to payment of dividend. He therefore
submitted that the aforesaid decisions of the Hon'ble Apex Court were squarely
applicable in the facts of the present case. He further submitted that if any
distribution of cash or other property by a company amongst its shareholders amounts
to dividend in the hands of the shareholders, it will also constitute distribution of
dividend by the company and what is dividend received by a shareholder is equally
KPPNair 12 CSP-709 of 2014
dividend issued by a company. In the light of these submissions he submitted that the
decisions relied upon by Mr. Tulzapurkar in relation to importing a meaning from one
Act to another, has no relevance at all. As regards the order passed by this Court in
the case of KEC Infrastructure Limited, Mr. Mehta submitted that there was no
objection raised by the Regional Director or any other party in that case as has been
raised in the present case and hence that order cannot be relied upon for the purpose
of sanctioning the present Scheme. The same was the case with the Order passed by
the Calcutta High Court in the case of Bata Properties Limited (supra). He further
submitted that in any event once it was shown that the present Scheme was illegal,
the Court ought not to sanction the Scheme even though a similar scheme was
sanctioned in the past.
11. I have considered the above submissions of the Petitioner as well as the
Regional Director. The question that arises for consideration is whether the Scheme
violates Section 123 of the 2013 Act. The answer to this question depends on
whether the gifting of the shares of TAAL by the Petitioner Company to its
Shareholders amounts to the Petitioner giving dividend to its Shareholders. To
determine this question one will have to examine the relevant provisions of the 2013
Act relating to dividend and the same are reproduced herein below for convenience :-
"Definitions.
2. In this Act, unless the context otherwise requires --
..... .... ..... .....
KPPNair 13 CSP-709 of 2014
(35) "dividend" includes any interim dividend";
"Declaration of dividend
123(1) ...... ...... ...... ......... ....
(2) ... ...... ......... ...... .......
(3) ... ...... ......... ...... .......
(4) ... ... ......... ...... ..........
(5) No dividend shall be paid by a company in respect of any share
therein except to the registered shareholder of such share or to his order
or to his banker and shall not be payable except in cash;
Provided that nothing in this sub-section shall be
ig deemed to
prohibit the capitalization of profits or reserves of a company for the
purpose of issuing fully paid-up bonus shares or paying up any amount
for the time being unpaid on any shares held by the members of
the company.
Provided further that any dividend payable in cash may be paid
by cheque or warrant or in any electronic mode to the shareholder
entitled to the payment of the dividend."
12. At this stage it will also be apposite to notice the definition of "dividend" as
contained in the Income Tax Act, 1922 and the Income Tax Act, 1961. The definition
of "dividend" contained in the Income Tax Act, 1922 is as follows :-
"2. In this Act, unless there is anything repugnant in the subject or
context--
6(a) - "dividend" includes ...................................."
The definition of "dividend" contained in the Income Tax Act, 1961 is as
follows:
KPPNair 14 CSP-709 of 2014
2. Definitions:
.... ..... .....
(22) "dividend" includes ............................................."
Except for the opening words in the above definitions of dividend, the rest of the
definition is not relevant for the present purposes as it is nobody's case that gifting of
the shares of TAAL by the Petitioner Company to its Shareholders constitutes dividend
as specifically defined in the various sub-clauses of Section 2(22) of the Income Tax
Act, 1961.
13. I will first consider the argument of Mr. Tulzapurkar that the Petitioner
Company is conferred with the widest powers to formulate any kind of scheme of
compromise and/or arrangement with its shareholders under Sections 391 to 394 of
the 1956 Act. According to him, where a company has more than one modality
available for any corporate action, the choice lies with the company to select the one
which it deems appropriate. In this case the Petitioner Company has opted for and
followed the procedure prescribed under Sections 391 to 394 read with Sections 100
to 104 of the 1956 Act for the purpose of gifting its shares in TAAL to its
Shareholders. He submitted that once the Petitioner Company has followed a legally
prescribed procedure for entering into an arrangement with its shareholders, Section
123 of the 2013 Act will have no application and will not come in the way of such a
Scheme. It is not possible to accept the aforesaid submissions of Mr. Tulzapurkar. It is
trite law that every Scheme under Sections 391 to 394 of the Companies Act must
KPPNair 15 CSP-709 of 2014
comply with all laws and must not be violative of any provision of law. It follows that
apart from complying with the provisions of Sections 391 to 394, the Scheme must
also comply with the other provisions of the Companies Act and must not be contrary
to any of those provisions. In my view therefore it cannot be said that merely because
the Scheme is propounded under Sections 391 to 394 read with Sections 100 to 104
of the 1956 Act, the Scheme need not comply with the other provisions of the 2013
Act as applicable including the provisions of Section 123 of the 2013 Act. In my
opinion the Scheme must not violate any of the other provisions of the 1956 Act and
the 2013 Act including the said Section 123.
14. To support his contention Mr. Tulzapurkar has relied upon the decision of the
Hon'ble Apex Court in the case of Miheer Mafatlal(supra). In my opinion, far from
supporting the argument of Mr. Tulzapurkar, the ratio of the aforesaid decision clearly
establishes that no scheme of compromise and arrangement can be violative of any
provision of law including the Companies Act. This is clear from the following extract
taken from the aforesaid decision :-
"In view of the aforesaid settled legal position, therefore, the scope
and ambit of the jurisdiction of the company court has clearly got
earmarked. The following broad contours of such jurisdiction have
emerged :-
.... ..... ....... ....
.... ... ..... ....
KPPNair 16 CSP-709 of 2014
(6) That the proposed scheme of compromise and arrangement is not
found to be violative of any provision of law and is not contrary to
public policy. For ascertaining the real purpose underlying the scheme
with a view to be satisfied on this aspect, the Court, if necessary, can
pierce the veil of apparent corporate purpose underlying the scheme and
can judiciously x-ray the same."
15. Mr. Tulzapurkar placed heavy reliance on the decision of the Division Bench of
this Court in the case of Sterlite Industries (India) Limited to support his argument
that the Court has the widest powers under Sections 391 to 394 to approve or
sanction any scheme of compromise or arrangement and that a company is at liberty
to select one of the several modalities available for any corporate action. In support of
his contention, Mr. Tulzapurkar also relied upon the unreported decisions of this
Court in the case of Tatanet Services Limited (supra), Balkrishna Industries Ltd.
(supra), Balkrishna Paper Mills Ltd. (supra), Balkrishna Synthetics Limited (supra)
and Zicom Electronic Security Systems Limited (supra). However, none of the
decisions relied on by Mr. Tulzapurkar state that a scheme of compromise and
arrangement under Sections 391 to 394 is required to be sanctioned even though it is
found that the scheme violates some provision of the Companies Act. These decisions
at best show that a company can follow the procedure under Sections 391 to 394 and
enter into a scheme of compromise and/or arrangement with its shareholders and/or
creditors and that by such a scheme a company may do something for which another
method may also be prescribed by the Companies Act. For example, in the case of
KPPNair 17 CSP-709 of 2014
Sterlite Industries (India) Limited this Court held that even though Section 77A of the
1956 Act prescribed the procedure for a company to buy back its own shares, the
company had the option of buying back its own shares by following the procedure
under Sections 391 to 394 subject to compliance with Sections 100 to 104 of the
1956 Act. Significantly, Section 77A did not prohibit the buy back of shares by a
company but only prescribed a method for doing so. As such that was not a case
where the Scheme in question was found to be violative of any other provision of the
Companies Act. In fact this Court held that a company could buy back its shares
either by following the procedure under Section 77A or the procedure under Sections
391 to 394 subject to compliance with Sections 100 to 104 of the 1956 Act.
16. As regards the unreported decision of this Court in Tatanet Services Limited
relied upon by Mr. Tulzapurkar, it appears that in that case the Regional Director had
raised a contention that the Petitioner therein could have transferred the undertaking
of the company by availing of the provisions of Section 393(1)(a) of the 1956 Act and
that it was not necessary for the Petitioners to file a Petition under Sections 391 and
394. In that context this Court held that if the Petitioners have chosen a more
elaborate route which has the same object, they could not be faulted for the same.
The decision in Tatanet Services was followed by this Court in the later unreported
decisions in the case of Balkrishna Industries Ltd. (supra), Balkrishna Paper Mills Ltd.
(supra) Balkrishna Synthetics Limited (supra) and Zicom Electronic Security Systems
Limited(supra). In both these decisions there was no contention raised by the
KPPNair 18 CSP-709 of 2014
Regional Director that the scheme in question violated any other provision of the
Companies Act. The only contention raised was that there was another route
available to achieve the same objective. In the circumstances neither of these
decisions are of any aid to the Petitioner herein.
17. In the present case the argument of the Regional Director is not that the
Petitioner Company ought to have followed another procedure for the purpose of
gifting the shares of TAAL to its Shareholders. The contention of the Regional
Director is that such a gift of shares is violative of the provisions of Section 123 of the
2013 Act. None of the decisions cited by Mr. Tulzapurkar deal with a case where the
contention of the Regional Director was that the scheme in question was contrary to
any provision of the 1956 Act. This is the material difference between the case in
hand and the decisions cited by Mr. Tulzapurkar. Consequently none of the above
decisions cited by Mr. Tulzapurkar are applicable in the facts of the present case and
do not take the case of the Petitioner Company any further. On the other hand the
decision of the Hon'ble Apex Court in Miheer Mafatlal's case categorically holds that a
scheme of compromise and/or arrangement must not violate any provision of law.
Consequently the decisions of this Court cited by Mr. Tulzapurkar are irrelevant in the
context of the objections of the Regional Director that the Scheme is violative of
Section 123 of the 2013 Act.
18. Further if one looks at Section 123 of the 2013 Act, it is clear that it does not
prescribe any modality or method for declaration of dividend. It prescribes conditions
KPPNair 19 CSP-709 of 2014
to be complied with by a company before declaring dividend. Hence Section 123 is
not a modality to be followed for the purpose of issuing dividend as suggested by Mr.
Tulzapurkar. It is clear that if a company wishes to issue or declare dividend it is
mandatorily required to comply with the provisions of Section 123. It is therefore not
possible to accept the submission of Mr. Tulzapurkar that if a company wishes to
distribute its properties among its shareholders by following the procedure prescribed
under Sections 391 to 394, Section 123 will not be applicable and the company
therefore need not comply with the conditions prescribed by Section 123. If such a
contention is accepted, it will mean that companies can declare dividends in violation
of Section 123 merely by following the procedure prescribed by Sections 391 to 394.
For this reason also I am of the view that even if a company distributes its assets
amongst its shareholders by means of a scheme of compromise or arrangement under
Sections 391 to 394, such a company will be required to comply with the provisions
of Section 123 if such distribution of assets amounts to distribution of dividend. In
other words no dividend can be issued by a company without strictly complying with
the provisions of Section 123 of the 2013 Act.
19. This brings me to the central question that arises in the present case i.e.
whether the gift of the shares of TAAL by the Petitioner Company to its Shareholders
constitutes a violation of Section 123 of the 2013 Act. The submission of Mr. Mehta
on behalf of the Regional Director is that the gift of the shares of TAAL by the
KPPNair 20 CSP-709 of 2014
Petitioner Company to its Shareholders is a violation of Section 123 of the 2013 Act
inasmuch as the same constitutes and amounts to payment of dividend by the
Petitioner Company to its Shareholders. The question that therefore arises for
consideration is whether gift of shares of TAAL by the Petitioner Company to its
Shareholders constitutes and amounts to payment of dividend by the Petitioner
Company to its Shareholders.
20. From the definition of "dividend" contained in Section 2(35) of the 2013 Act, it
is evident that the same is an inclusive definition. It is well settled that an inclusive
definition is expansive in nature and is used to widen the meaning of a particular
word or expression. While an inclusive definition may specify the acts or things that
will be covered by the definition, it does not exclude the ordinary meaning of the
expression or word. Accordingly, in my view, the inclusive definition of the
expression "dividend" in the 2013 Act will not exclude from its purview the meaning
of "dividend" in its ordinary sense. In other words, the expression "dividend" used in
the 2013 Act will have to be understood in its ordinary sense and be given its
ordinary meaning. The only consequence of the definition of "dividend" in Section
2(35) of the 2013 Act is that "dividend" will also include interim dividend.
21. The view I have taken with respect to the meaning of "dividend" in the 2013
Act is supported by two decisions of the Hon'ble Apex Court relied upon by Mr. Mehta
and referred to above viz. the decisions in the case of Kantilal Manilal (supra) and
Central India Industries (supra). Although both these decisions were rendered in the
KPPNair 21 CSP-709 of 2014
context of the provisions of the Income Tax Act, 1922, the ratios of these decisions
will be applicable and relevant in the context of the Companies Act also in view of the
fact that even the definition of "dividend" in the Income Tax Act, 1922 was an
inclusive definition, as is clear from Section 2(6a) of the Income Tax Act, 1922
reproduced hereinabove. In Kantilal Manilal, the Appellants before the Hon'ble Apex
Court held 570 shares of Navjivan Mills Limited. It seems that Navjivan Mills held
5000 shares of the Bank of India Limited. On 6 th May 1948 the Bank of India passed
a resolution increasing its share capital and approving the allotment of new shares to
its existing shareholders. Navjivan Mills, as a holder of 5000 shares of the Bank of
India, became entitled to receive 1666.6 shares of the Bank of India. It appears that
the management of Navjivan Mills was not inclined to acquire these 1666.6 shares
offered by the Bank of India. Accordingly the Board of Directors of Navjivan Mills
passed a resolution to the effect that Navjivan Mills would acquire only 66 shares out
of 1666.6 shares offered by the Bank of India and the right to the remaining 1600
shares shall be distributed amongst the shareholders of Navjivan Mills
proportionately. The Appellants before the Hon'ble Apex Court became entitled to
1440 shares of the Bank of India which they acquired and ultimately transferred to a
Private Company by the name of Jesinghbai Investment Company Limited. Sometime
later the assessment of the Appellants before the Hon'ble Apex Court and of other
shareholders of Navjivan Mills was reopened by the Income Tax Department on the
footing that the release of the shares of the Bank of India by Navjivan Mills to its
shareholders amounted to distribution of dividend and the value of the rights
KPPNair 22 CSP-709 of 2014
released in favour of the shareholders had escaped tax. It was in this context that the
Hon'ble Apex Court was called upon to decide whether the distribution of the right to
acquire the shares of the Bank of India by Navjivan Mills amongst its shareholders
amounted to distribution of dividend. The Hon'ble Apex Court came to the
conclusion that it did. In the process, the Hon'ble Apex Court held as follows :-
"6. Counsel for the appellants contended that the High Court was
not justified, having regard to the form of the question which expressly
related to the distribution of the right to the Bank of India shares
being divided within the meaning of the definition in Section 2(6-A) of
the Income Tax Act, in enlarging the scope of the question and in
answering it in the light of its ordinary meaning. There is no
substance in this contention. "dividend" is defined in Section 2(6-A)
as inclusive of various items and exclusive of certain others
which it is not necessary to set out for the purpose of this appeal.
"dividend" in its ordinary meaning is a distributive share of the
profits or income of a company given to its shareholders. When
the Legislature by Section 2(6-A) sought to define the expression
"dividend" it added to the normal meaning of the expression
several other categories of receipts which may not otherwise be
included herein. By the definition in Section 2(6-A), "dividend"
means dividend as normally understood and includes in its
connotation several other receipts set out in the definition. The
Tribunal had referred the question whether the distribution of the
right to apply for the Bank of India shares amounted to distribution of
dividend within the meaning of Section 2(6-A) and in answering that
question, the High Court had to take into account both the normal
KPPNair 23 CSP-709 of 2014
and the extended meaning of that expression. In the question framed
by the Tribunal, there is nothing to indicate that the High Court was
called upon to advise on the question whether the receipts by the
appellants amounted to dividend only within the extended definition of
that expression in Section 2(6-A).
7. It was also urged that in nominating its shareholders to exercise
the option to purchase the new issue of the Bank of India, the Mills did
not distribute any dividend. The Mills were, it is true, not obliged to
accept the offer made by the Bank of India, however advantageous it
might have been to the Mills to accept the offer: it was open to the
Mills to renounce the offer. The Mills had three options, (1) to accept
the shares, (2) to decline to accept the shares, or (3) to surrender
them in favour of its nominee. It is undisputed that when the shares
were offered by the Bank of India to its shareholders, the right to apply
for the shares had a market value of Rs.100 per share. The face value
of the new share was Rs.50 but the shareholders had to pay a
premium of Rs.50, thus making a total payment of Rs.100 for
acquiring the new share. The new shares were quoted in the market at
more than Rs.200: and the difference between the amount payable for
acquiring the shares under the right offered by the Bank of India and
the market quotation of the shares was indisputably the value of the
right. The Mills could not be compelled to obtain this benefit if it did
not desire to do so: it could accept the shares or decline to accept those
shares or exercise the option of surrendering them in favour of its
nominees.
This last option could be exercised by nominating the persons who
KPPNair 24 CSP-709 of 2014
were to take over the shares and that is what the Mills did. The Mills
requested the Bank of India to allot the shares to its nominees, and the
request for allotment to its nominees amounted to transfer of the right.
By its resolution, the Mills in truth transferred a right of the value of
Rs.200 for each share held by its shareholders. This was manifestly
not distribution of the capital of the Mills. It was open to the Mills
to sell the right to the shares of the Bank of India in the market,
and to distribute the proceeds among the shareholders. Such a
distribution would undoubtedly have been distribution of
dividend. If instead of selling the right in the market and then
distributing the proceeds, the Mills directly transferred the right,
the benefit in the hands of the shareholders was still dividend.
8. Dividend need not be distributed in money; it may be
distributed by delivery of property or right having monetary
value. The resolution, it is true, did not purport to distribute the
right amongst the shareholders as dividend. It did not also take
the form of a resolution for distribution of dividend; it took the
form of distribution of a right which had a monetary value. But
by the form of the resolution sanctioning the distribution, the
true character of the resolution could not be altered. We are
therefore of the view that the High Court was right in holding
that the distribution of the right to apply for and obtain two
shares of the Bank of India (at half their market value) for each
share held by the shareholders of the Mills amounted to
distribution of dividend." (Emphasis supplied)
KPPNair 25 CSP-709 of 2014
22. From the above decision of the Hon'ble Apex Court it is apparent that the
Hon'ble Apex Court considered the inclusive definition of the expression "dividend" as
contained in Section 2(6a) of the Income Tax Act, 1922 and its meaning, and clearly
held that the expression "dividend" means dividend as ordinarily understood and
includes in its connotation the other items set out in the definition. The Hon'ble Apex
Court further held that when the Legislature defined the expression "dividend" in
Section 2(6A) it added to the normal meaning of the expression several other
categories of receipts which may not otherwise be included therein. In other words,
the Hon'ble Apex Court held that the ordinary meaning of the expression "dividend"
would be applicable and was not excluded by virtue of the inclusive definition of the
the said expression. The Hon'ble Apex Court thereafter went on to hold that it was
open to Navjivan Mills to sell the right to the shares of the Bank of India in the market
and distribute the sale proceeds among its shareholders, which distribution would
undoubtedly have been distribution of dividend. The Hon'ble Apex Court held that if,
instead of selling the right in the market and then distributing the sale proceeds, the
Navjivan Mills directly transferred the right to its shareholders, the benefit in the
hands of the shareholders was still dividend. According to the Hon'ble Apex Court
dividend need not be distributed only in money but may be distributed by delivery of
property or a right having monetary value. The Hon'ble Apex Court further held that
even though the resolution passed by the Navjivan Mills did not purport to distribute
the right amongst the shareholders as dividend, it did not make any difference
inasmuch as it was not the form of the resolution that mattered but the true character
KPPNair 26 CSP-709 of 2014
thereof. In these circumstances the Hon'ble Apex Court came to the conclusion that
the distribution of the right to apply for and obtain the shares of the Bank of India by
Navjivan Mills to its shareholders amounted to distribution of dividend.
23. Applying the ratio of the decision of the Hon'ble Apex Court in Kantilal Manilal
in the present case, there is no doubt in my mind that the gifting of the shares of
TAAL by the Petitioner Company to its Shareholders constitutes and amounts to the
distribution and payment of dividend. As held by the Hon'ble Apex Court the
inclusive definition of "dividend" in the Income Tax Act did not exclude from its
purview the ordinary meaning of dividend. In my view the same is the situation in
the context of the 2013 Act. The definition of "dividend" in Section 2(35) of the 2013
Act will not exclude from its purview the meaning of dividend as ordinarily
understood. The expression "dividend" as used in the 2013 Act will therefore include
dividend in its ordinary sense. As held by the Hon'ble Apex Court in Kantilal Manilal
(supra) even the distribution of properties or rights having monetary value by a
company amongst its shareholders will constitute dividend. The form of resolution
passed by the company is not relevant, but its substance is relevant. In Kantilal
Manilal (supra) the Hon'ble Apex Court held that the distribution of the right to
acquire shares constituted distribution of dividend. In the present case it is not just
the right to acquire shares that is being gifted by the Petitioner Company to its
Shareholders, but it is the shares themselves that are being gifted. The Petitioner
Company is distributing its shares in TAAL to its Shareholders by way of a gift. In my
KPPNair 27 CSP-709 of 2014
view this is clearly distribution of dividend by the Petitioner Company. The Company
could very well have sold the shares of TAAL in the market and distributed the
proceeds amongst its Shareholders. Instead the Company is directly gifting the said
shares to its Shareholders. Such a gift in the hands of the Shareholders would clearly
be dividend. Mr. Tulzapurkar submitted that in the case of Kantilal Manilal, the
Hon'ble Apex Court was considering whether the distribution of the right to acquire
shares was taxable in the hands of the shareholders and not the company, and that for
the purposes of the Companies Act the distribution of dividend should be considered
from the company's perspective and not the perspective of the shareholders. In my
view it makes little difference that the Hon'ble Apex Court was considering the matter
from the angle of taxability of dividend whether in the hands of the shareholders or
the company. In my view the expression "dividend" in its ordinary sense must mean
the same thing whether considered in the context of the Income Tax Act or the
Companies Act. What constitutes dividend when declared or issued by the company
will equally be dividend when received by its shareholders. In the light of the
aforesaid discussion, in my view, there can be no doubt that by gifting the shares of
TAAL the Petitioner Company is in fact distributing dividend amongst its
Shareholders.
24. The decision in Kantilal Manilal (supra) was subsequently followed by the
Hon'ble Apex Court in the case of Central India Industries (supra). In that case the
assessee company received dividend partly in cash and partly in shares. Once again
KPPNair 28 CSP-709 of 2014
the question arose as to whether the receipt of shares by the assessee company was
taxable as dividend. The Hon'ble Apex Court followed its earlier decision in Kantilal
Manilal and came to the conclusion that since the distribution of property or right
having monetary value also constitutes distribution of dividend, and dividend need
not be distributed in money only, the dividend by way of handing over of shares also
constituted dividend and was taxable. The Hon'ble Apex Court further held that if it
were otherwise, companies may distribute dividend in kind and facilitate evasion of
tax by shareholders and this would be destructive of the very basis of taxation of
dividends. Both the decisions of the Hon'ble Apex Court viz. the decisions in Kantilal
Manilal (supra) and Central India Industries (supra) hold the field even today and
continue to be good law. It is therefore well settled that the inclusive definition of
"dividend" will not exclude the ordinary meaning of dividend. It is also well settled
that "dividend" as ordinarily understood will include dividend paid in kind by
distribution of properties or assets of a company or any rights having monetary value,
amongst its shareholders. In the present case the Petitioner Company is seeking to
distribute its shares in TAAL to its Shareholders under the Scheme. This is nothing
but payment of dividend in kind.
25. The next question that arises for consideration is whether the gifting of the
shares of TAAL by the Petitioner Company to its Shareholders is violative of Section
123 of the 2013 Act. Sub-section 5 of Section 123 categorically prohibits the
payment of dividend by a company in any manner otherwise than by cash. I have
KPPNair 29 CSP-709 of 2014
already held that the gift of the shares of TAAL by the Petitioner Company to its
Shareholders amounts to payment of dividend. It is clear that this payment of
dividend is in kind and not by way of cash. Payment of dividend in kind is expressly
prohibited by Section 123(5). In my view therefore the gifting of the shares of TAAL
by the Petitioner Company to its Shareholders will be in violation of Section 123(5) of
the 2013 Act.
26. It is submitted by Mr. Tulzapurkar that a company can distribute its assets
under the provisions of Sections 100-104 of the 1956 Act and that accordingly no
fault can be found with the Scheme. I am unable to accept this submission. First and
foremost, as is clear from the Clause 5 of the Scheme itself, the reduction of the SPA is
merely an accounting treatment in the books of the Petitioner Company. Further this
reduction is a consequence of the gifting of the shares of TAAL by the Petitioner
Company to its Shareholders and this is clear from the opening words of Clause 5
viz., "Pursuant to the gifting of equity shares in TAAL by ISEL to its shareholders, the
balance lying in the Securities Premium Account shall, be reduced by the book value of
investments in TAAL so gifted, ......................". Even otherwise it is clear that the
main purpose and object of the Scheme is the gifting of shares of TAAL by the
Petitioner Company to its Shareholders. Moreover, even a reduction of capital under
the Companies Act must not be in violation of the other provisions of the Companies
Act. The gift of the shares of TAAL by the Petitioner Company to its Shareholders will
therefore necessarily have to comply with the provisions of Section 123 of the 2013
KPPNair 30 CSP-709 of 2014
Act, particularly in view of my finding that the said gift amounts to distribution of
dividend. In the circumstances the provisions of Sections 100 to 104 of the 1956 Act
and Section 52 of the 2013 Act are of no assistance to the Petitioner Company and
will not save the Scheme.
27. Mr. Tulzapurkar has relied on an Order passed by this Court in the case of KEC
Infrastructure Limited (supra) sanctioning a scheme involving the distribution of
shares of KEC International Limited in KEC Infrastructure Limited to the shareholders
of KEC International Limited and submitted that the case was similar to the present
one and thereby submitted that this Court had already sanctioned a similar scheme in
the past. In this regard Mr. Mehta has rightly pointed out that in the case of KEC
Infrastructure Limited there was no objection raised by the Regional Director or any
other party with regard to the violation of Section 205 of the 1956 Act. Hence this
issue was not considered by this Court in that case. Consequently, the order of this
Court in KEC Infrastructure Limited is not relevant in the present case and is of no
assistance to the Petitioner Company. The same is the situation with regard to the
order of the Calcutta High Court in the case of Bata Properties Limited (supra) relied
upon by Mr. Tulzapurkar. That decision therefore also does not carry the case of the
Petitioner Company any further.
28. The next objection of the Regional Director is based on the letter of the Dy.
Commissioner of Income Tax, Central Circle-2(1), Pune dated 27 th October 2014. By
this letter the Income Tax Department has informed the Regional Director that the
KPPNair 31 CSP-709 of 2014
following proceedings are pending against the Petitioner Company under the Income
Tax Act :-
i) Assessment proceedings in respect of AY 2013-14 i.e. FY 2012-13.
ii) Outstanding demands of Rs.1,16,57,000/- and Rs.1,09,57,772/- in
respect of AY 2006-07 and AY 2007-08 respectively.
iii) Penalty proceedings in respect of AYs 2006-07 to 2012-13.
29. Relying upon Section 281 of the Income Tax Act, 1961, the Income Tax
Department has contended that the gift of the shares of TAAL by the Petitioner to its
Shareholders as proposed under the Scheme is void. It is pointed out that the
Petitioner has not made any application to the Income Tax Department for permission
to make this gift. In view of the aforesaid, the Income Tax Department has requested
that the Scheme not be approved. The Regional Director has placed the aforesaid
objection of the Income Tax Department before the Court in support of the same.
30. To appreciate the objection of the Income Tax Department it is necessary to
consider the provisions of Section 281 of the Income Tax Act. The relevant portion of
Section 281 is reproduced below :-
"281 (1) Where, during the pendency of any proceedings under this
Act or after the completion thereof, but before the service of notice under
rule 2 of the Second Schedule, any assessee creates a charge on, or parts
with the possession (by way of sale, mortgage, gift, exchange or any
other mode of transfer whatsoever) of, any of his assets in favour of any
KPPNair 32 CSP-709 of 2014
other person, such charge or transfer shall be void as against any claim
in respect of any tax or any other sum payable by the assessee as a result
of the completion of the said proceeding or otherwise :
Provided that such charge or transfer shall not be void if it is
made-
(i) For adequate consideration and without notice of the pendency
of such proceeding or, as the case may be, without notice of such tax
or other sum payable by the assessee; or
(ii) With the previous permission of the Assessing Officer."
31. It is clear from Section 281 of the Income Tax Act that the gift of any asset by
an assessee to any person during the pendency of any proceedings under the Income
Tax Act will be void as against any claim in respect of any tax or any other sum
payable by the assessee as a result of the completion of such proceedings or
otherwise. In the present case it is an undisputed position that the above mentioned
proceedings under the Income Tax Act are pending against the Petitioner Company.
Despite the pendency of these proceedings, by the Scheme the Petitioner proposes to
gift its shares in TAAL to its Shareholders. Such a gift would therefore clearly be hit
by the provisions of Section 281(1) and would be void as against the claims of the
Income Tax Department resulting from the proceedings mentioned above. It is
pertinent to note that it is not the case of the Petitioner that the gift of the shares of
TAAL would not be void on account of the proviso to Section 281(1). In the
KPPNair 33 CSP-709 of 2014
circumstances there can be no doubt that the proposed gift of the shares of TAAL by
the Petitioner to its Shareholders will defeat the provisions of Section 281(1) of the
Income Tax Act.
32. The Petitioner however contends that it has more than sufficient assets to
discharge the tax liability in the event that the same crystallizes upon the Petitioner,
inasmuch as according to the Petitioner, it has a net worth of Rs. 52 crores as per the
book value method and a net worth of Rs. 57 crores as per the market value method
post distribution of the shares of TAAL to its Shareholders. In my view, even if this be
true, the same does not alter the position with regard to the applicability of Section
281(1). Section 281(1) does not carve out any exception on the basis of sufficiency
or otherwise of the assets of the assessee. The Petitioner therefore cannot avoid the
applicability of the provisions of Section 281(1) on the ground that it may have
sufficient assets to discharge the tax liability as and when the same accrues. This
contention of the Petitioner is also therefore liable to be rejected.
33. As noticed above, there are assessment proceedings, outstanding demands and
penalty proceedings under the Income Tax Act pending against the Petitioner
Company. These proceedings may very well result in taxes or other sums being
payable by the Petitioner Company to the Income Tax Department. The gift of the
shares of TAAL by the Petitioner Company to its Shareholders will be void as against
the claim or claims of the Income Tax Department in respect of the aforesaid taxes
and sums, in view of Section 281(1). The Income Tax Department would therefore
KPPNair 34 CSP-709 of 2014
be entitled to recover its dues by attachment and sale of the said shares of TAAL. If
these shares are today permitted to be gifted under the Scheme to the Shareholders
of the Petitioner Company, the same may not be available at the time when the
claim of the Income Tax Department is crystallized, since there may be further sales
of these shares by the Shareholders receiving the same. It must be kept in mind that
TAAL is a Public Limited Listed Company whose shares can be traded on the Stock
Exchange. In this manner this asset of the Petitioner Company will be lost to the
Income Tax Department. In my view this will defeat the purpose and object of
Section 281(1) of the Income Tax Act. Accordingly it will not be proper to permit the
Petitioner Company to gift its shares in TAAL to its Shareholders as envisaged under
the Scheme. The Court will not put its imprimatur on such a Scheme.
34. Mr. Tulzapurkar submitted that it is well settled by the decisions of this Court as
well as the Hon'ble Apex Court that an assessee is entitled to arrange its affairs in a
manner so as to save tax. Consequently the Petitioner is entitled to avoid payment of
tax by propounding the present Scheme. In my view this is not an answer to Section
281 of the Income Tax Act. There is no doubt that the Petitioner can arrange its
affairs in a manner so as to avoid payment of tax. However, this does not entitle the
Petitioner to dispose of its assets in a manner so as to defeat the provisions of Section
281(1) of the Income Tax Act.
35. It is further argued by Mr. Tulzapurkar that by gifting its shares in TAAL to its
Shareholders, the Petitioner is not seeking to avoid tax and that if any tax is payable
KPPNair 35 CSP-709 of 2014
on the transaction or on future sales of the shares by the Shareholders, it is always
open to the Income Tax Department to carry out assessment proceedings and recover
the tax. In my view this submission also does not answer the objection of the Income
Tax Department, and the Regional Director, based on Section 281(1) of the Income
Tax Act. No doubt that if the transaction of gift of the shares or the subsequent sales
of the shares are taxable, it will be open to the Income Tax Department to adopt
appropriate proceedings for recovery of the same. However, even this does not mean
that the Petitioner Company can dispose of its shares in TAAL in a manner so as to
defeat the provisions of Section 281 of the Income Tax Act.
36. In view of my findings above it is clear that the Scheme is illegal and contrary
to law and hence cannot be sanctioned by this Court. Accordingly I pass the
following Order :-
O R D E R
i) Company Scheme Petition No.709 of 2014 is dismissed;
ii) However, there shall be no order as to costs.
(S.J. KATHAWALLA, J.)
CERTIFICATE
" Certified to be true and correct copy of the original signed Judgment"
