2018 (1) TMI 1410 - Tri - Companies Law

Scheme of amalgamation - approval accorded by the members and creditors of the petitioner-company to the proposed scheme - Held that - The approval accorded by the members and creditors of the petitioner-company to the proposed scheme and the affidavits filed by the Regional Director, Northern Region, Ministry of Corporate Affairs whereby no objections have been raised to the proposed scheme, there appears to be no reservation to grant sanction to the scheme. However, the companies shall remain bound by the undertaking filed by each one of them. Consequently, sanction is hereby granted to the scheme under sections 230 to 232 of the Companies Act, 2013. The petitioner shall however remain bound to comply with the statutory requirements in accordance with law. If there is any deficiency found or, violation committed qua any enactment, statutory rule or regulation, the sanction granted by this court to the scheme will not come in the way of action being taken, albeit, in accordance with law, against the concerned persons, directors and officials of the petitioners. While approving the scheme as above, we further clarify that this order should not be construed as an order in any way granting exemption from payment of stamp duty, Income-tax, GST or other charges, if any, and payment in accordance with law or in respect to any permission/compliance with any other requirement which may be specifically required under any law.

Issues Involved:
1. Approval of the proposed scheme of amalgamation.
2. Objections raised by various objectors.
3. Compliance with statutory requirements and legal provisions.

Issue-wise Detailed Analysis:

1. Approval of the Proposed Scheme of Amalgamation:
The petitioner-companies sought approval for a proposed scheme of amalgamation. Initially, the application for dispensing with the meetings of shareholders, secured and unsecured creditors was filed before the High Court of Delhi, which directed convening of such meetings. Subsequently, the High Court directed the petitioner-companies to issue notices to relevant authorities and publish the notice of the petition in newspapers, inviting objections to the scheme. The Regional Director, Northern Region, Ministry of Corporate Affairs, did not raise any serious objections except for a delay in filing audited annual accounts, which was subsequently rectified.

2. Objections Raised by Various Objectors:

a. Objections by Bhatnagars:
The Bhatnagars, JV partners with the demerged company in a real estate project, objected to the scheme. They requested exclusion from the demerger scheme. The parties amicably settled their differences, agreeing to retain the "Capital Tower Project" in the demerged company. Consequently, specific clauses of the scheme were modified to comply with sections 2(19AA) and 72A(4) of the Income-tax Act, 1961.

b. Objections by Statesman Ltd.:
Statesman Ltd. raised objections, alleging misrepresentation and concealment of material facts, particularly an arbitral award dated May 12, 2016. They argued that non-disclosure of the award should result in dismissal of the petition. They also contended that the payment of ?40 crores was not fully received due to illegal TDS deduction and that arbitration proceedings were still pending. In response, the petitioner argued that all dues were paid as per the award, and the objector was no longer a creditor. The Tribunal found no substance in the objections, noting that the award was announced after the board meetings approving the scheme and that the objector had no locus standi as the entire awarded amount had been paid.

3. Compliance with Statutory Requirements and Legal Provisions:
The Tribunal acknowledged the approval accorded by members and creditors of the petitioner-company and the affidavits filed by the Regional Director, Northern Region, Ministry of Corporate Affairs, which raised no objections to the proposed scheme. The Tribunal granted sanction to the scheme under sections 230 to 232 of the Companies Act, 2013, subject to compliance with statutory requirements. The order clarified that the sanction did not exempt the companies from payment of stamp duty, Income-tax, GST, or other charges, and compliance with any other legal requirements.

Conclusion:
The Tribunal approved the scheme of amalgamation, transferring all property, rights, powers, liabilities, and duties of the demerged undertaking to the resulting company. It also directed the petitioner to file a certified copy of the order with the Registrar of Companies within thirty days and allowed any interested person to apply to the Tribunal for necessary directions. The approval was subject to compliance with statutory requirements and did not exempt the companies from any legal obligations.

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