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2019 (10) TMI 1300 - Tri - Companies LawSanction of Scheme of Merger by Absorption - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT - The First Applicant Company is directed to serve notices along with copy of scheme upon - (i) concerned Income Tax Authority for the First Applicant Company having PAN No. AAACL0702F at 2(2)(2) , Aykar Bhavan , Marine lines Mumbai, India within whose jurisdiction the First Applicant Company s assessments are made (ii) the Central Government through the office of Regional Director, Western region, Mumbai and (iii) Registrar of Companies Mumbai India 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 First Applicant Company failing which, it shall be presumed that the authorities have no representations to make on the proposals - The First Applicant Company to also serve the notice upon the concerned office of the Official Liquidator, pursuant to Section 230(5) of the Companies Act, 2013 as per Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The Second Applicant Company is directed to serve notices along with copy of scheme upon - (i) concerned Income Tax Authority for Second Applicant Company having PAN No. AAACA1031G at 1(1)(1), Aykar Bhavan, Marine lines Mumbai, India within whose jurisdiction the Second Applicant Company s assessments are made (ii) the Central Government through the office of Regional Director, Western region, Mumbai (iii) Registrar of Companies Mumbai India, and (iv) Reserve Bank of India, Mumbai 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 Second Applicant Company failing which, it shall be presumed that the authorities have no representations to make on the proposals.
Issues Involved:
1. Scheme of Merger by Absorption 2. Business Activities of Applicant Companies 3. Compliance with Reserve Bank of India (RBI) Directions 4. Rationale for the Scheme 5. Approval of the Scheme by Board of Directors 6. Meetings of Equity Shareholders 7. Notice of Meetings 8. Advertisement of Meetings 9. Undertakings by Applicant Companies 10. Appointment of Chairperson for Meetings 11. Quorum and Voting Procedures 12. Scrutinizer for Meetings 13. Reporting to Tribunal 14. Notices to Secured and Unsecured Creditors 15. Notices to Regulatory Authorities 16. Affidavit of Service Detailed Analysis: 1. Scheme of Merger by Absorption: The Counsel for the Applicants stated that the present Scheme is a Scheme of Merger by Absorption of Lombards Private Limited (Transferor Company) with Alco Company Private Limited (Transferee Company) and their respective shareholders under Sections 230 to 232 of the Companies Act, 2013. 2. Business Activities of Applicant Companies: The First Applicant Company is engaged in the manufacture of acrylic sanitary ware, liquid detergents, and trading in building materials. The Second Applicant Company is engaged in trading in building materials. 3. Compliance with Reserve Bank of India (RBI) Directions: The Second Applicant Company applied to the RBI for a Certificate of Registration to carry on the business of a Non-Banking Financial Institution without accepting deposits. The certificate was issued on 19th October 2018, with a direction to liquidate the Financial Assets of the First Applicant Company within eight months, which the merger will facilitate. 4. Rationale for the Scheme: The merger is in the interest of the group as both companies are governed by the same set of Board of Directors and shareholders. It aims to remove inefficiencies, combine similar business interests, achieve operational synergies, and reduce regulatory and legal compliance obligations. 5. Approval of the Scheme by Board of Directors: The Board of Directors approved the Scheme of Merger by Absorption with an Appointed Date of 1st April 2018, via Board Resolutions dated 18th January 2019. 6. Meetings of Equity Shareholders: Meetings for the Equity Shareholders of both Applicant Companies were scheduled for 15th November 2019 to consider and approve the proposed arrangement. 7. Notice of Meetings: Notices convening the meetings, along with a copy of the Scheme and a statement disclosing all material facts, were to be sent to each Equity Shareholder at their last known address or email. 8. Advertisement of Meetings: The notices were to be advertised in two local newspapers, "Business Standard" in English and "Navshakti" in Marathi, at least 30 days before the meetings. 9. Undertakings by Applicant Companies: The Applicant Companies undertook to issue notices in Form No. CAA.2, statements as per Section 230(3) of the Companies Act, 2013, Form of Proxy in Form No. MGT-11, and advertise the notices as required. 10. Appointment of Chairperson for Meetings: Mr. Adamji Yahyabhai Jasdanwalla, Chairman in the First Applicant Company and Managing Director in the Second Applicant Company, or Mr. Arshad Adamji Jasdanwalla, Director in the First Applicant Company and Vice Chairman in the Second Applicant Company, were appointed as Chairpersons for the meetings. 11. Quorum and Voting Procedures: The quorum for the meetings was prescribed under Section 103 of the Companies Act, 2013. Voting by proxy or authorized representative was permitted, provided the proxy form/authorization was filed not later than 48 hours before the meetings. 12. Scrutinizer for Meetings: Mrs. Kumudini Bhalerao, Makarand M Joshi & Co., Practicing Company Secretary, was appointed as the Scrutinizer for the meetings, to be paid ?5000 per Applicant Company. 13. Reporting to Tribunal: The Chairman was directed to file an affidavit at least seven days before the meetings, reporting compliance with the directions regarding the issue of notices and advertisements. The results of the meetings were to be reported within thirty days of the conclusion. 14. Notices to Secured and Unsecured Creditors: The Counsel submitted that there were no Secured Creditors in either Applicant Company. Notices to Unsecured Creditors were to be issued, allowing them to submit representations to the Tribunal. 15. Notices to Regulatory Authorities: Notices along with a copy of the scheme were to be served to the concerned Income Tax Authorities, the Central Government, the Registrar of Companies, and the RBI, allowing them thirty days to submit representations. 16. Affidavit of Service: The Applicant Companies were directed to file an affidavit of service proving the dispatch of notices, publication of notices in newspapers, and service of notice to regulatory authorities, reporting compliance to the Tribunal.
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