2017 (8) TMI 1324 - Tri - Companies Law

Scheme of amalgamation - Held that - A perusal of the representation of Regional Director shows that notice to the Principal Commissioner of Income Tax, Delhi had been duly sent and that no specific comments/observation have been received raising any objections. A perusal of the Regional Director report states that the letter was also sent to the Reserve Bank of India who have given the response dated 28th April, 2017 stating that Signature Global (India) Private Limited, namely the Transferee Company is carrying NBFC s activities illegally without the permission of the RBI. Since this Tribunal cannot be made an accomplice to illegality, we are not convinced by the explanations given by the Petitioner Companies. Further, prior approval of RBI is a must for proceeding further with the consideration of the Scheme, which has not been obtained and hence we are unable to sanction the scheme before us and hence the petition is dismissed with costs of ₹ 25000/- payable to Prime Minister National Relief Fund.

Summary

Issues:
Approval of scheme of arrangement for amalgamation of companies, dispensation of meetings of equity shareholders and creditors, compliance with Companies Act, 2013, observations by Regional Director and Registrar of Companies, requirement of RBI approval for NBFC activities.

Detailed Analysis:

1. Scheme of Amalgamation Approval:
The petition sought approval for the amalgamation of several companies with a transferee company. The High Court initially dispensed with the requirement of convening meetings of equity shareholders and creditors, as consents were obtained. The joint petitions for sanction were filed subsequently under the Companies Act, 1956.

2. Transfer to National Company Law Tribunal:
The High Court transferred the case to the National Company Law Tribunal following the notification vesting powers to consider such schemes with the Tribunal. The petition was taken up for final consideration after compliance with publication and notice requirements.

3. Compliance with High Court Orders:
The petitioners complied with High Court orders by effecting paper publication, issuing notices to concerned authorities, and filing necessary documents. Affidavits from Official Liquidator and Regional Director indicated no objections to the scheme.

4. Observations by Regional Director and Registrar of Companies:
The Regional Director raised concerns regarding compliance with Companies Act, 2013, and the nature of activities of the companies involved. The Registrar of Companies highlighted discrepancies in paid-up capital and potential NBFC activities of the transferee company.

5. Petitioner's Response to Observations:
The petitioner responded to observations, clarifying the paid-up capital and asserting that the transferee company was not engaged in NBFC activities. They argued against the alleged violations of the Companies Act, 2013, and the necessity of RBI approval for the scheme.

6. RBI Approval Requirement for NBFC Activities:
The Regional Director's report indicated that the transferee company was engaged in NBFC activities without RBI approval. The Tribunal emphasized the mandatory requirement of RBI approval for such activities and dismissed the petition due to the lack of RBI approval, imposing costs payable to the Prime Minister National Relief Fund.

In conclusion, the judgment addressed various issues surrounding the approval of an amalgamation scheme, compliance with legal requirements, and the necessity of RBI approval for NBFC activities, ultimately leading to the dismissal of the petition due to non-compliance.