2019 (5) TMI 1840 - Tri - Companies Law

Sanction of Scheme of Amalgamation - section 230 to 232 of the Companies Act, 2013 r/w the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT - Considering the facts and circumstances of the case and on perusal of the Scheme, the documents produced on record, Report of the RD and Report of the OL and various affidavit filed by the Petitioner Companies, it appears that the requirement of provisions of sections 230 to 232 of the Companies Act, 2013, are satisfied. The Scheme appears to be genuine and bona fide and in the interest of the Shareholders and Creditors. The scheme is sanctioned.

Issues Involved:
1. Sanction of Scheme of Amalgamation.
2. Compliance with statutory requirements and directions.
3. Preservation of books and records.
4. Compliance with applicable laws and statutory liabilities.
5. Filing of order for confirmation of the scheme.
6. Compliance with directions of BSE, NSE, and SEBI.
7. Sectoral regulator approval (FEMA/RBI).
8. Handling of pending charges and secured creditors' consents.
9. No-objections from statutory authorities.

Issue-wise Detailed Analysis:

1. Sanction of Scheme of Amalgamation:
The petitions CP(CAA)No. 42/230/HDB/2018, CP(CAA)No. 44/230/HDB/2018, and CP(CAA) No. 46/230/HDB/2018 were filed seeking sanction of the Scheme of Amalgamation between Pennar Engineered Building Systems Limited (Transferor Company-I), Pennar Enviro Limited (Transferor Company-II), and Pennar Industries Limited (Transferee Company). The Tribunal admitted the petitions and directed the publication of the date of hearing and issuance of notices to statutory authorities. The Scheme was approved by the shareholders and unsecured creditors of the Petitioner Companies at their respective Tribunal-convened meetings.

2. Compliance with Statutory Requirements and Directions:
The Tribunal directed the Petitioner Companies to convene meetings of equity shareholders and unsecured creditors, which were duly held, and the Scheme was approved with overwhelming majorities in favor. The Petitioner Companies complied with the directions to serve notices and publish advertisements regarding the meetings and hearings.

3. Preservation of Books and Records:
The Regional Director recommended that the Petitioner Companies preserve their books of accounts, papers, and records and not dispose of them without the prior permission of the Central Government as per Section 239 of the Companies Act, 2013. The Petitioner Companies undertook to comply with this direction.

4. Compliance with Applicable Laws and Statutory Liabilities:
The Regional Director emphasized the need for the Petitioner Companies to ensure statutory compliance with all applicable laws and not be absolved of any statutory liabilities upon sanctioning the Scheme. The Petitioner Companies undertook to comply with all applicable laws and pay statutory liabilities as they arise.

5. Filing of Order for Confirmation of the Scheme:
The Petitioner Companies were directed to file Form No. INC-28 with the Registrar of Companies concerning the order for confirmation of the Scheme as per Rule 17(2) of the Companies (Compromise, Arrangement, and Amalgamation) Rules, 2013. The Petitioner Companies undertook to comply with this requirement.

6. Compliance with Directions of BSE, NSE, and SEBI:
The Regional Director noted that BSE and NSE had provided observations and directions regarding the draft Scheme. The Petitioner Companies undertook to comply with all directions from BSE, NSE, and SEBI.

7. Sectoral Regulator Approval (FEMA/RBI):
The Regional Director raised concerns about compliance with FEMA/RBI regulations concerning the shareholding pattern. The Petitioner Companies clarified that the Transferee Company is eligible to receive 100% equity under the automatic route without any approval and undertook to comply with all FEMA/RBI provisions.

8. Handling of Pending Charges and Secured Creditors' Consents:
The Regional Director highlighted pending charges against the Petitioner Companies. The Petitioner Companies provided affidavits from secured creditors consenting to the Scheme and clarified the status of pending charges.

9. No-objections from Statutory Authorities:
The Official Liquidator and the Regional Director reported no objections to the Scheme. The Regional Director's report included observations and recommendations, which the Petitioner Companies addressed through undertakings and clarifications.

Conclusion:
The Tribunal found that the requirements of Sections 230 to 232 of the Companies Act, 2013, were satisfied. The Scheme was deemed genuine, bona fide, and in the interest of shareholders and creditors. The Scheme of Amalgamation was sanctioned with an appointed date of 01.04.2018, binding on the Petitioner Companies and their stakeholders. The Tribunal directed all concerned authorities to act on the order, and the Transferor Companies were to be dissolved without winding up. The Petitioner Companies were instructed to take necessary steps to implement the Scheme and ensure transparency through newspaper publications.

Disposition:
The Company Petitions CP(CAA)No. 42/230/HDB/2018, CP(CAA)No. 44/230/HDB/2018, and CP(CAA)No. 46/230/HDB/2018 were disposed of accordingly.

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