2019 (10) TMI 1406 - Tri - Companies Law

Approval of the Scheme of Arrangement - Sections 230 to 232 of the Companies Act, 2013 r/w the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT - The Company Petition is allowed and the Scheme of Amalgamation annexed with the Petitions is hereby sanctioned. The Scheme approved shall be binding on the Shareholders, Creditors and employees of the Companies involved in this Scheme, The Appointed date of the Scheme is 7th October, 2017. This Order will not be construed as an order granting exemption from payment of stamp duty or taxes or any other charges, if payable, as per the relevant provisions of law or from any applicable permissions that may have to be obtained or, even compliances that may have to be made as per the mandate of law - Companies to the said Scheme or other person interested shall be at liberty to apply to this Bench for any direction that may be necessary with regard to the working of the said Scheme. The scheme is sanctioned.

Summary

Issues Involved:
Approval of Scheme of Arrangement under Sections 230 to 232 of the Companies Act, 2013 for amalgamation of two companies.

Detailed Analysis:

1. Scheme of Amalgamation: The petition was filed for approval of the Scheme of Arrangement under Sections 230 to 232 of the Companies Act, 2013. The Scheme proposed the amalgamation of the Transferor Company with the Transferee Company, "Freecharge Payment Technologies Private Limited."

2. Rationale for Amalgamation: The rationale behind the proposed Scheme was to consolidate the business of both companies into one entity, enabling them to optimize synergies, achieve economies of scale, reduce overheads, and utilize resources efficiently. The amalgamation was deemed beneficial for all stakeholders involved.

3. Regulatory Compliance: The Regional Director and the Income Tax department did not raise any objections to the merger under consideration. The Regional Director specifically highlighted the need for compliance with certain provisions of the Companies Act, 2013.

4. Accounting Treatment and Employee Transition: The Scheme detailed the accounting treatment to be followed by the Transferee Company post-amalgamation and ensured that all employees of the Transferor Company would become employees of the Transferee Company without any adverse changes in their terms and conditions of employment.

5. Legal Conformity: The Scheme was found to be fair, reasonable, not contrary to public policy, and compliant with all statutory requirements under Sections 230 to 232 of the Companies Act, 2013. It was concluded that the Scheme did not violate any provisions of law.

6. Sanction of Scheme: Considering all the facts presented, the Company Petition was allowed, and the Scheme of Amalgamation was sanctioned. The Scheme was declared binding on the Shareholders, Creditors, and employees of the companies involved, with the Appointed date of the Scheme set as 7th October, 2017.

7. Further Clarifications: The Order clarified that it did not exempt the parties from payment of stamp duty, taxes, or any other charges as per relevant provisions of law. It also allowed the parties to apply for necessary directions regarding the implementation of the Scheme.

8. Operational Procedures: The Order directed the filing of a certified copy with the Registrar of Companies, dissolution of the Transferor Company without winding up, consolidation of documents with the Transferee Company, and the preparation of the sanction Order as per the prescribed format.

9. Conclusion: The Scheme of Amalgamation was ultimately sanctioned, and the Company Petition was disposed of, concluding the legal proceedings related to the approval of the Scheme under Sections 230 to 232 of the Companies Act, 2013.

This detailed analysis covers the key aspects of the judgment delivered by the National Company Law Tribunal, New Delhi, regarding the approval of the Scheme of Arrangement for the amalgamation of two companies.