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2019 (9) TMI 1398 - Tri - Companies LawSanction of Scheme of Merger (by absorption) - Sections 230 to 232 of the Companies Act, 2013 - Dispensation with various meetings - HELD THAT - The Transferor Company is also directed to serve notice upon Official Liquidator, pursuant to section 230(5) of the Companies Act, 2013 and as per Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The Tribunal is appointing M/s. Dalal Kala., Chartered Accountant, to assist the Official Liquidator to scrutinize the books of accounts of the said Transferor Company for the last 5 years and submit its representation/ report to the Tribunal. The aforesaid Company to pay fees of ₹50,000/- for this purpose. If no representation/ response is received by the Tribunal from Official Liquidator, Bombay within a period of thirty days from the date of receipt of such notice, it will be presumed that Official Liquidator has no representation/ objection to the proposed Scheme as per Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - The Applicant Companies are accordingly directed to serve notices along with the documents as mentioned. The Applicant Companies to file affidavit of service of the directions given by the Tribunal in the Registry for service of notice to the regulatory authorities as stated above and do report to this Tribunal that the directions regarding the issue of notices have been duly complied with.
Issues:
1. Scheme of Merger (by absorption) of wholly owned subsidiary with its holding company under Sections 230 to 232 of the Companies Act, 2013. 2. Dispensing with meetings of Equity Shareholders, Sole Preference Shareholder, Secured Creditors, and Unsecured Creditors. 3. Impact on rights of members, creditors, and existence of the Transferee Company. 4. Compliance with provisions of the Companies Act, 2013 and Rules for Compromises, Arrangements, and Amalgamations. 5. Service of notices to Official Liquidator and regulatory authorities. Analysis: 1. The judgment pertains to a Scheme of Merger (by absorption) between a wholly owned subsidiary, Jai Realty Ventures Limited (Transferor Company), and its holding company, Jai Corp Limited (Transferee Company), in accordance with Sections 230 to 232 of the Companies Act, 2013. The Scheme aims to streamline the group structure, reduce legal entities, and rationalize costs by eliminating redundancies. 2. The Applicant sought dispensation of meetings for Equity Shareholders, Sole Preference Shareholder, Secured Creditors, and Unsecured Creditors based on the number of shareholders and creditors, along with obtaining written consents from them. The Tribunal considered the requests and directed accordingly, given the specific circumstances of the case. 3. The Applicant Companies highlighted that the merger would not affect the rights of members or creditors of the Transferee Company. No new shares would be issued, creditors' claims would not be reduced, and the net worth of the Transferee Company post-merger would remain positive. The existence of the Transferee Company would not undergo any substantial changes. 4. Emphasis was placed on compliance with the Companies Act, 2013 and Rules for Compromises, Arrangements, and Amalgamations. The judgment outlined the necessary steps to be taken, such as serving notices to the Official Liquidator and regulatory authorities, filing relevant documents, and ensuring the submission of representations within specified timelines. 5. The judgment directed the Transferor Company to serve notice to the Official Liquidator as per statutory requirements. Additionally, the Applicant Companies were instructed to serve notices to various regulatory authorities, including tax authorities, government offices, and stock exchanges, and to file affidavits confirming compliance with the Tribunal's directions regarding the issuance of notices. This detailed analysis reflects the Tribunal's thorough consideration of the Scheme of Merger and the procedural requirements to ensure legal compliance and transparency in the process.
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