2020 (12) TMI 1291 - Tri - Companies Law

Seeking the sanction of scheme of amalgamation - sections 230 to 232 of the Companies Act, 2013 - HELD THAT - The requirements of the provisions of sections 230 and 232 are satisfied by the petitioner-companies. The proposed scheme is bonafide and in the interest of share- holders and creditors. The composite scheme of amalgamation is attached herewith as annexure A and is declared as that the same shall be binding upon all the petitioner-companies, their shareholders, creditors and all concerned under the composite scheme of amalgamation - Application allowed.

Issues Involved:
1. Sanction of the scheme of amalgamation.
2. Convening and holding meetings of secured and unsecured creditors.
3. Compliance with statutory requirements and observations by statutory authorities.
4. Payment of stamp duty and resolution of creditor objections.
5. Confirmation of no adverse observations by the official liquidator and statutory authorities.
6. Compliance with accounting standards and statutory obligations.
7. Dissolution of the transferor company without winding up proceedings.

Issue-Wise Detailed Analysis:

1. Sanction of the Scheme of Amalgamation:
The petitions were filed under sections 230 to 232 of the Companies Act, 2013 by the petitioner-companies for the sanction of the scheme of amalgamation of M/s. Mamata Extrusion Systems P. Ltd. with M/s. Mamata Machinery P. Ltd., effective from April 1, 2019. The entire business of the transferor company, along with all its rights and obligations, shall be transferred to and vested in the transferee company without any further act or deed.

2. Convening and Holding Meetings of Secured and Unsecured Creditors:
The Tribunal initially did not allow the dispensation of meetings of secured creditors as the consent letters were not by way of affidavit as required under section 230(9) of the Act. Meetings of secured and unsecured creditors were convened and held as directed by the Tribunal. Notices of the meetings were published in relevant newspapers, and explanatory statements were sent to each secured creditor.

3. Compliance with Statutory Requirements and Observations by Statutory Authorities:
Notices under section 230(5) read with rule 6 and rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 were issued to statutory authorities, including the Central Government, Registrar of Companies, Income-tax authorities, and the official liquidator. The official liquidator's report indicated no adverse observations, and the transferor company was confirmed not to be registered as an NBFC.

4. Payment of Stamp Duty and Resolution of Creditor Objections:
The Regional Director observed the need for payment of stamp duty post-amalgamation and noted an objection from an unsecured creditor regarding dues. The transferee company undertook to pay the difference in fees due to enhanced authorized capital and addressed the creditor's objection in the chairman's report.

5. Confirmation of No Adverse Observations by the Official Liquidator and Statutory Authorities:
The Regional Director and Registrar of Companies confirmed no complaints against the petitioner-companies. The statutory auditors certified that the accounting treatment under the scheme conformed to the prescribed Accounting Standards.

6. Compliance with Accounting Standards and Statutory Obligations:
The petitioner-companies confirmed compliance with all statutory obligations under applicable laws, and the scheme was stated not to be against public interests or adversely impact any creditors.

7. Dissolution of the Transferor Company Without Winding Up Proceedings:
The Tribunal declared that the transferor company would stand dissolved without winding up proceedings. All properties, rights, powers, liabilities, and duties of the transferor company would be transferred to the transferee company without further act or deed.

Order:
The Tribunal allowed the petitions, declaring the composite scheme of amalgamation binding on all concerned. The transferor company would be dissolved without winding up proceedings, and all its properties and liabilities would be transferred to the transferee company. The petitioner-companies were directed to deliver a certified copy of the order to the Registrar of Companies within thirty days and comply with stamp duty adjudication and filing requirements. Legal fees and expenses were quantified and directed to be paid by the transferee company. The company petition was disposed of with no order as to costs.

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