2019 (9) TMI 1468 - Tri - Companies Law

Approval of Scheme of Amalgamation - Section 230 and 232 of the Companies Act, 2013 - HELD THAT - The Petitioner Companies had filed I.A. No. 287 of 2019 seeking to amend Clause 11 of the Scheme which deals with the combination of authorised share capital. The said I.A. No. 287 of 2019 was allowed on 25.06.2019. The Petitioner Companies have also filed I.A. No. 60/2019 under Rule 11 of the NCLT Rules seeking for condonation of delay in filing the Petition late by thirteen days. Since the delay is of less than two weeks and due to the reason of non-availability of the authorised signatories, no harm will be caused if the said I.A. No. 60/2019 is allowed. 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 scheme is approved - application allowed.

Issues Involved:
1. Scheme of Amalgamation
2. Compliance with statutory requirements
3. Observations by Registrar of Companies and Regional Director
4. Compliance with RBI/FEMA regulations
5. Appointment of Chartered Accountant by Official Liquidator
6. Approval and conditions imposed by the Tribunal

Issue-wise Detailed Analysis:

1. Scheme of Amalgamation:
The Company Petition was filed under Sections 230 and 232 of the Companies Act, 2013, seeking the sanction of a Scheme of Amalgamation. The scheme proposed the merger of South India Energy Consultants Private Limited (Transferor Company) with Velcan Renewable Energy Private Limited (Transferee Company). The objective was to make the scheme binding on the respective shareholders of both companies. The Board of Directors of both companies approved the scheme on 20th November 2018.

2. Compliance with Statutory Requirements:
The Tribunal directed the petitioner companies to issue notices to relevant statutory authorities, including the Registrar of Companies (ROC), Regional Director (RD), and the Reserve Bank of India (RBI). Notices were also to be published in specified newspapers. The companies complied with these directions and filed affidavits confirming the publication and service of notices.

3. Observations by Registrar of Companies and Regional Director:
The ROC made several observations, including:
- The scheme must clearly indicate an appointed date and an effective date.
- Compliance with RBI/FEMA rules was necessary due to the foreign ownership structure.
- Both companies had not appointed a whole-time Company Secretary as required under Section 203 of the Companies Act, 2013.
- The clubbing of authorized capital required compliance with Section 232(3)(i) of the Companies Act, 2013.

The Regional Director reiterated similar observations and emphasized compliance with RBI/FEMA rules and the appointment of a Company Secretary.

4. Compliance with RBI/FEMA Regulations:
The RBI stated that it would not vet individual cases but required compliance with RBI/FEMA rules. The petitioner companies confirmed compliance with Foreign Direct Investment (FDI) regulations and registration with the RBI.

5. Appointment of Chartered Accountant by Official Liquidator:
The Official Liquidator requested permission to appoint a Chartered Accountant to scrutinize the books of accounts of the Transferor Company. The Tribunal allowed this request, and the Chartered Accountant's report confirmed that the affairs of the Transferor Company were conducted appropriately.

6. Approval and Conditions Imposed by the Tribunal:
The Tribunal found the scheme to be fair, reasonable, and not detrimental to members or creditors. The scheme was approved with the following conditions:
- No exemption from payment of stamp duty, taxes, or other charges.
- Transfer of the undertaking and liabilities of the Transferor Company to the Transferee Company.
- Compliance with tax implications subject to final decisions by tax authorities.
- Continuation of pending proceedings by or against the Transferor Company.
- Filing of a certified copy of the order with the ROC within thirty days.
- Payment of differential stamp duty and fees by the Transferee Company.
- Compliance with FEMA/RBI regulations.
- Submission of an affidavit confirming compliance with specified forms and regulations.
- The appointed date for the scheme was set as 1st April 2019.
- Handover of books of accounts and relevant documents from the Transferor Company to the Transferee Company.

The Tribunal also disposed of an application for condonation of delay in filing the petition and allowed amendments to the scheme as proposed by the petitioner companies. The order clarified that it would not prevent any authority from taking action for any violations committed prior to or during the approval of the scheme.

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