2017 (11) TMI 1752 - Tri - Companies Law

Scheme of amalgamation - Held that - The copy of the admitted petition contains clauses 1 to 35. Clause 20 of the admitted petition contains material extracts of scheme of amalgamation (i.e., clause 5 to clause 14 of the scheme). Therefore it is to be observed that there is no omission of clauses 15 to 21 of the petition submitted to the Regional Director as observed by the Regional Director in his report. The company has again resubmitted an entire set of company petition with the Regional Director on October 31, 2017. The observations made by the Regional Director have been explained by the petitioner-company in paragraphs 8 to 10 above. The clarifications and undertakings given by the petitioner-company are accepted by the Tribunal. From the material on record, the scheme appears to be fair and reasonable and is not violative of any provisions of law including but not limited to the Companies Act, 2013; Income-tax Act, 1961 ; Accounting Standards and various other applicable statutory acts and is not contrary to public policy.

Summary

Issues:
1. Scheme of amalgamation of three companies under sections 230 to 232 of the Companies Act, 2013.
2. Compliance with statutory requirements.
3. Observations and clarifications by the Regional Director.
4. Fairness and legality of the scheme.
5. Directions for implementation and compliance.

Analysis:
1. The judgment concerns the scheme of amalgamation of three companies under sections 230 to 232 of the Companies Act, 2013. The scheme involves the merger of two transferor companies with a transferee company, aiming at synergies, financial strength, and operational efficiencies. The petitioner-company has obtained board approval for the scheme.

2. The compliance with statutory requirements is crucial. The petitioner-company has adhered to the directions of the National Company Law Tribunal, Mumbai Bench, and filed necessary affidavits of compliance. The petitioner undertakes to fulfill all statutory obligations under the Companies Act, 2013, and relevant rules.

3. The Regional Director's report raised certain observations regarding tax implications, accounting treatment, and missing clauses in the petition. The petitioner addressed these concerns satisfactorily. Undertakings were given to resolve tax issues, and necessary documents were submitted to confirm compliance with accounting standards.

4. The Tribunal found the scheme fair, reasonable, and legally sound. It concluded that the scheme did not violate any provisions of the Companies Act, 2013, Income-tax Act, 1961, or Accounting Standards. The scheme was deemed not contrary to public policy, and all statutory compliances were met.

5. The judgment sanctioned the scheme with an appointed date, directed the lodging of the order and scheme with the Registrar of Companies, and specified the payment of costs to the Regional Director. Additionally, it highlighted the pending approval of the scheme by the National Company Law Tribunal of Chennai Bench and instructed regulatory authorities to act on the order accordingly.

In conclusion, the judgment approved the amalgamation scheme, emphasizing compliance with statutory requirements, addressing observations by the Regional Director, and ensuring fairness and legality in the process. The detailed analysis covered various aspects of the judgment, including the rationale behind the merger, compliance measures, clarifications provided, and directions for implementation and compliance.