2019 (12) TMI 1353 - Tri - Companies Law

Sanction of proposed Company Scheme of Amalgamation - Sections 230-232 of the Companies Act 2013 - HELD THAT - We considered the contents and salient features of the proposed company scheme and have gone through the report and observations of the Regional Director and Official Liquidator respectively. We also perused the reply affidavit submitted by the petitioner companies and the undertaking/assurance given therein can be accepted and acted upon. Hence we find the proposed company scheme appears to be reasonable and bona fide for sanctioning of the Scheme of amalgamation which is not going to prejudice to the paramount interest of its shareholders creditors not it appears to be detrimental to the public interest at large. Therefore the proposed scheme of amalgamation of Essen Polymers Private Limited with Essen Multipack Limited deserves to be sanctioned. Petition allowed.

Issues Involved:
1. Sanctioning of the proposed Company Scheme of Amalgamation under Sections 230-232 of the Companies Act, 2013.
2. Dispensation and convening of meetings for Equity Shareholders and Unsecured Creditors.
3. Compliance with statutory provisions and addressing observations from the Regional Director (RD) and Official Liquidator (OL).
4. Ensuring the scheme is fair, reasonable, and not prejudicial to shareholders, creditors, or public interest.

Issue-wise Detailed Analysis:

1. Sanctioning of the Proposed Company Scheme of Amalgamation:
The petitioner companies sought the tribunal's sanction for the amalgamation of Essen Polymers Private Limited with Essen Multipack Limited. The tribunal considered the petition under Sections 230-232 of the Companies Act, 2013. The scheme aimed to enhance management focus, administrative convenience, and resource utilization, ultimately leading to higher returns on investment and capital.

2. Dispensation and Convening of Meetings for Equity Shareholders and Unsecured Creditors:
The tribunal had earlier dispensed with the meetings of Equity Shareholders for both companies and directed the convening of meetings for Unsecured Creditors. These meetings were held on 30.08.2019, where the Unsecured Creditors unanimously voted in favor of the scheme. The tribunal ensured compliance with its previous order dated 24th June 2019.

3. Compliance with Statutory Provisions and Addressing Observations from RD and OL:
The tribunal directed the petitioner to notify relevant authorities, including the Regional Director, Registrar of Companies, Official Liquidator, and Income-Tax Authorities, and to publish notices in newspapers. The RD and OL submitted their comments and representations. The RD noted no complaints against the petitioner companies and sought directions for compliance with Section 232(3)(i) of the Companies Act, 2013, regarding the authorized share capital adjustment. The OL confirmed statutory compliance and the protection of employees' interests, recommending directions for preserving records and ensuring statutory liabilities are met.

4. Ensuring the Scheme is Fair, Reasonable, and Not Prejudicial:
The tribunal evaluated the scheme's reasonableness against the Supreme Court's guidelines in Miheer H. Mafatlal vs. Mafatlal Industries Ltd., ensuring compliance with statutory procedures, fairness to shareholders and creditors, and non-violation of public policy. The tribunal found the scheme to be bona fide and not detrimental to shareholders, creditors, or public interest. The petitioner companies provided necessary undertakings and assurances for statutory compliance.

Conclusion:
The tribunal sanctioned the proposed scheme of amalgamation, subject to specific conditions and directions, including payment of legal fees to the RD and OL, filing of the order with relevant authorities, and compliance with stamp duty adjudication. The petition was disposed of accordingly, with the tribunal emphasizing the scheme's fairness, reasonableness, and compliance with statutory requirements.

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