2019 (5) TMI 1839 - Tri - Companies Law

Sanction of scheme of amalgamation - Section 230 to 232 of the Companies Act, 2013 - HELD THAT - Upon perusal of Ld. Counsel for the Petitioners and Authorised Representative of the Regional Director, Eastern Region, Ministry Of Corporate Affairs at Kolkata and the approvals accorded by the members and creditors of petitioner companies to the proposed Scheme and the affidavits filed by the Regional Director, Eastern Region, Ministry of Corporate Affairs, the report of Official Liquidator, the replies filed by the Petitioner Companies to the observation of the Regional Director, there appears to be no impediment in sanctioning the present Scheme - Consequently sanction is hereby granted to the Scheme under section 230 232 of the Companies Act, 2013. The scheme is sanctioned - appeal allowed.

Issues Involved:

1. Sanctioning of the Scheme of Amalgamation.
2. Compliance with procedural requirements.
3. Examination of the necessity and benefits of the amalgamation.
4. Addressing observations and objections from regulatory authorities.
5. Final judgment and orders.

Issue-wise Detailed Analysis:

1. Sanctioning of the Scheme of Amalgamation:
The petition sought the Tribunal's sanction for the Scheme of Amalgamation of Premier Financial Advisory Services Private Limited and Rash Bhoomi Vyapaar Private Limited (Transferor Companies) with Panson Properties Private Limited (Transferee Company), with the appointed date being 1st April, 2018, under Sections 230 to 232 of the Companies Act, 2013. The objective was to transfer and vest the entire undertaking, including all assets and liabilities, of the Transferor Companies to the Transferee Company as a going concern.

2. Compliance with Procedural Requirements:
The Tribunal's order dated 23rd January, 2019, in Company Application No. C.A (CAA) NO 896/KB/2018, dispensed with the requirement of holding separate meetings of shareholders and secured creditors due to their consents being provided via affidavits. Similarly, the requirement for meetings of unsecured creditors was waived based on auditors' certificates and consents. The Tribunal directed the petitioner companies to serve notices to various regulatory authorities and advertise the hearing date in specified newspapers. Compliance with these directives was confirmed through affidavits filed by the petitioners.

3. Examination of the Necessity and Benefits of the Amalgamation:
The petition outlined several reasons necessitating the amalgamation, including:
- Consolidation of business by eliminating cross holdings.
- Combined and advantageous use of assets.
- Restructuring and reorganizing business activities and capital structure.
- Economies of scale and reduction in overhead expenses.
- Establishment of a larger company with greater resources and capital base.
- Pooling resources for business expansion.
- Rationalization and streamlining of management, business, and finances.

4. Addressing Observations and Objections from Regulatory Authorities:
The Regional Director, Eastern Region, Ministry of Corporate Affairs, raised concerns regarding compliance with Section 68 (buyback of shares) and Accounting Standard - 14. The petitioner companies responded with undertakings to comply with these requirements. The Official Liquidator reported no complaints against the proposed scheme and confirmed that the affairs of the Transferor Companies were not conducted prejudicially to members' or public interest.

5. Final Judgment and Orders:
After hearing the counsel for the petitioners and the authorized representative of the Regional Director, and considering the approvals, affidavits, and reports, the Tribunal found no impediment in sanctioning the scheme. The Tribunal sanctioned the Scheme of Amalgamation with effect from 1st April, 2018, and ordered:
- Transfer and vesting of properties, rights, and liabilities to the Transferee Company.
- Continuation of pending proceedings by or against the Transferee Company.
- Issuance and allotment of shares to shareholders of the Transferor Companies.
- Dissolution of the Transferor Companies without winding up.
- Filing of certified copies of the order with the Registrar of Companies within 30 days.

The Company Petition No C.P.(CAA)No. 299/KB/2018 connected with C.A(CAA)No.896/KB/2018 was disposed of with no order as to cost. Urgent Photostat copies of the order were allowed subject to compliance with requisite formalities.

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