2020 (1) TMI 1490 - Tri - Companies Law

Scheme of Merger by Absorption - Section 230 to 232 and other applicable provisions of the Companies Act, 2013 read with Companies (Compromises, Arrangement and Amalgamations) Rules, 2016 - HELD THAT - From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy - Since all the requisite statutory compliances have been fulfilled, Company Scheme Petition is made absolute in terms of Prayer of the Petitioner Companies. The Transferor Company shall stand dissolved without winding-up. The Scheme of Merger by Absorption is sanctioned hereby, and the appointed date of the Scheme is 1st January, 2019 - Application allowed.

Summary

Issues Involved:
Approval of Scheme of Merger by Absorption under Sections 230 to 232 of Companies Act, 2013 read with Companies (Compromises, Arrangement and Amalgamations) Rules, 2016.

Analysis:
The judgment delivered by the National Company Law Tribunal, Mumbai Bench, involved the approval of a Scheme of Merger by Absorption between two companies, Menon And Menon Limited and MML Industries Limited, along with their respective shareholders. The Petitioner Companies sought the sanction of the Tribunal under Sections 230 to 232 of the Companies Act, 2013, and other relevant provisions for the said Scheme. The rationale for the merger included benefits such as better internal economies, streamlining shareholding structure, and reducing the number of entities within the group to minimize managerial overlaps.

The Petitioner Companies had already approved the Scheme through Board Resolutions in their respective meetings. The Tribunal noted that no objections were raised against the Petition, and the Regional Director had filed a report supporting the Scheme. The Regional Director's report highlighted certain observations related to compliance requirements, including serving notices to concerned authorities, submission of necessary reports and documents, and compliance with accounting standards.

The Petitioner Companies assured compliance with all statutory requirements and affirmed that the Scheme enclosed with the Company Application and Petition were identical without any discrepancies. They also undertook to pass necessary accounting entries and comply with various Accounting Standards. The Tribunal found the Scheme to be fair, reasonable, and in accordance with the law, not violating any provisions or public policy.

Consequently, the Tribunal sanctioned the Scheme of Merger by Absorption, with the appointed date set as 1st January 2019. The judgment directed the Petitioner Companies to file a copy of the Order and Scheme with the Registrar of Companies, lodge the Order and Scheme for stamp duty adjudication, and instructed all relevant authorities to act upon the Order. The Transferor Company was to be dissolved without winding-up, and necessary compliance steps were outlined for the Petitioner Companies within specified timelines.