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2019 (3) TMI 1647 - Tri - Companies LawSanction of Scheme of Arrangement - Section 230 and 232 of the Companies Act 2013 - HELD THAT - Considering the materials on record the Scheme appears to be fair reasonable and is not detrimental against the Members or Creditors or contrary to public policy and the same can be approved. The Applicant Companies will ensure compliance of their Affidavits dated 1 8th December 2018 19th December 2018 and January 2019; and will submit Quarterly/Annual Status of compliances through an Affidavit by Managing Director/Director of the Company along with CA/ICWA/CS Certificate till the compliance is ensured - The Registrar of Companies Karnataka shall ensure that the stamp duty as fixed by the Inspector General of Registration and Commissioner of Stamps is paid within stipulated time under relevant provisions of law. The Transferor Company or its Authorized Signatories are directed that after the completion of the process of Amalgamation to handover the possession of the Books of Accounts and other relevant documents of the Transferor Company to the Transferee Company for the purpose of section 239 of the Companies Act 2013.
Issues Involved:
1. Sanction of the Scheme of Arrangement under Sections 230 and 232 of the Companies Act, 2013. 2. Compliance with statutory requirements and objections raised by the Registrar of Companies (ROC) and the Official Liquidator. 3. Effective Date of the Scheme. 4. Related Party Transactions compliance. 5. Payment of differential fee and stamp duty. 6. Tax liabilities and compliance with FEMA/RBI regulations. 7. Increase in authorized share capital of the Transferee Company. Issue-wise Analysis: 1. Sanction of the Scheme of Arrangement: The petitions were filed under Sections 230 and 232 of the Companies Act, 2013 for the Scheme of Arrangement between Ad2pro Media Solutions Private Limited (Transferor Company) and Ad2pro Global Creative Solutions Private Limited (Transferee Company). The Scheme was approved by the Board of Directors of both companies on 16th March 2018. The Tribunal found the Scheme to be fair, reasonable, and not detrimental to the interests of the members or creditors. 2. Compliance with Statutory Requirements and Objections: The Tribunal directed the issuance of notices to relevant statutory authorities and publication in newspapers. The ROC raised several observations, including the need for clear indication of the effective date, compliance with related party transactions under Section 188, payment of differential fee, and compliance with FEMA/RBI regulations. The Official Liquidator requested the appointment of a Chartered Accountant for scrutiny of the Transferor Company's books and highlighted disputed tax dues. 3. Effective Date of the Scheme: The Scheme mentioned an appointed date of 01.02.2018 but had contradictory clauses regarding the effective date. The Tribunal ordered that the Scheme be deemed effective from the appointed date, 01.02.2018, and Clause 4.5 of the Scheme be modified to be consistent with Clause 18. 4. Related Party Transactions Compliance: The ROC observed related party transactions in the Transferor Company for 2015-16 and 2016-17. The companies responded that these transactions were made at arm's length in the ordinary course of business and complied with the Companies Act, 2013. The Tribunal directed compliance with Section 188 of the Companies Act, 2013. 5. Payment of Differential Fee and Stamp Duty: The ROC noted that the Transferee Company must pay the differential fee and stamp duty as per Section 232(3)(i) of the Companies Act, 2013. The companies undertook to pay these fees and duties. The Tribunal clarified that its order does not grant exemption from payment of stamp duty, taxes, or other charges. 6. Tax Liabilities and Compliance with FEMA/RBI Regulations: The Transferor Company had disputed tax dues for assessment years 2012-13 to 2015-16. The Transferee Company undertook to pay these dues if adjudicated as payable. The companies also undertook to comply with FEMA/RBI regulations during the issue of shares to the Transferor Company's shareholders. 7. Increase in Authorized Share Capital of the Transferee Company: The ROC noted that the Transferee Company did not have sufficient authorized capital to issue shares as per the share exchange ratio. The companies undertook to increase the authorized share capital to issue shares to the Transferor Company's shareholders. The Tribunal directed the Transferee Company to increase its authorized share capital and pay the differential fee/duty accordingly. Final Orders: 1. The Scheme is effective from 01.02.2018, and Clause 4.5 is modified to be consistent with Clause 18. 2. No exemption from payment of stamp duty, taxes, or other charges. 3. Transfer of property, rights, and liabilities from the Transferor Company to the Transferee Company. 4. Tax implications subject to the final decision of tax authorities. 5. Continuation of pending proceedings by or against the Transferee Company. 6. Compliance with statutory requirements and undertakings within specified timelines. 7. Submission of quarterly/annual compliance status by the companies. 8. Payment of stamp duty as fixed by the Inspector General of Registration and Commissioner of Stamps. 9. Appointed date is 01.02.2018. 10. Handover of books of accounts and relevant documents from the Transferor Company to the Transferee Company. 11. Liberty to apply to the Tribunal for necessary directions.
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