2020 (2) TMI 1334 - Tri - Companies Law

Sanction of Scheme of Amalgamation - Sections 230 to 232 of the Companies Act, 2013 - 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. Mehta Singhvi Associates, Chartered Accountants, 410, Kewal Industrial Estate, Senapati Bapat Marg, Lower Parel, Mumbai 400013, Contact No.22-66096060/69, 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 ₹2,00,000/- 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 copy of scheme upon - (i) concerned Income Tax Authorities within whose jurisdiction the Applicant Company s assessments are made i.e. for the Transferor Company, Circle 1(3)(2), Mumbai, having PAN No. AABCW3823B, and for the Transferee Company, Circle 14(1)(2), Mumbai, having PAN No. AAACG3995M, (ii) the Central Government through the office of Regional Director, Western Region, Mumbai, (iii) Registrar of Companies, Mumbai (iv) Securities and Exchange Board of India (SEBI) (only in case of the Transferee Company), (v) BSE Limited (only in case of the Transferee Company), (vi) National Stock Exchange of India Limited (NSE) (only in case of the Transferee Company), (vii) Real Estate Regulatory Authority and any other applicable regulatory authority pursuant to Section 230(5) of the Companies Act, 2013 and as per Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, with a direction that they may submit their representations, if any, within a period of thirty days from the date of receipt of such notice to the Tribunal with copy of such representations shall simultaneously be served upon the Applicant Companies, failing which, it shall be presumed that the authorities have no representations to make on the proposals. 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.

Summary

Issues Involved:
Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013; Dispensation of Equity Shareholders' meeting; No Secured Creditors in Transferor Company; No meeting of Creditors required; Impact on rights of members and creditors post-merger; Compliance with Companies Act, 2013 provisions; No reconstruction or arrangement with shareholders or creditors required; Appointment of Official Liquidator; Service of notices to Regulatory Authorities.

Detailed Analysis:

1. Scheme of Amalgamation: The judgment pertains to the Scheme of Amalgamation between a wholly owned subsidiary, Wonder Space Properties Private Limited, and its holding company, Godrej Properties Limited, under Sections 230 to 232 of the Companies Act, 2013. The resolutions approving the Scheme were passed by the Board of Directors of both companies, with the Appointed Date set as April 5, 2019.

2. Equity Shareholders' Meeting Dispensation: The judgment highlights that the meeting of Equity Shareholders of the Transferor Company was dispensed with, as consent affidavits from all two Equity Shareholders were procured and submitted, eliminating the need for a formal meeting.

3. No Secured Creditors in Transferor Company: Since there were no Secured Creditors in the Transferor Company, the requirement for conveying a meeting or issuing notices to them did not arise, simplifying the process.

4. Impact on Rights of Members and Creditors: The judgment emphasizes that the Scheme does not affect the rights of members or creditors adversely. It is clarified that no shares will be issued as consideration post-merger, ensuring no dilution in shareholding or change in equity share capital of the Transferee Company.

5. Compliance with Companies Act, 2013 Provisions: The judgment details the compliance with various provisions of the Companies Act, 2013, ensuring that the Scheme adheres to legal requirements and safeguards the interests of stakeholders.

6. No Reconstruction or Arrangement with Shareholders or Creditors: It is asserted that as no reconstruction or arrangement is happening with shareholders or creditors, no meetings of shareholders or creditors are required for approval of the proposed Scheme, citing precedents from previous cases.

7. Appointment of Official Liquidator: The Transferor Company is directed to serve notice upon the Official Liquidator as per the Companies Act, 2013 provisions, appointing a Chartered Accountant firm to assist in scrutinizing the Transferor Company's books of accounts for the last five years.

8. Service of Notices to Regulatory Authorities: The judgment mandates the Applicant Companies to serve notices along with the Scheme to various Regulatory Authorities, including Income Tax Authorities, Central Government, SEBI, BSE Limited, NSE, and others, ensuring compliance with legal requirements.

In conclusion, the judgment provides a comprehensive analysis of the Scheme of Amalgamation, addressing various legal aspects, compliance requirements, and stakeholder interests to facilitate a smooth and lawful consolidation process between the Transferor and Transferee Companies.