2019 (12) TMI 1586 - Tri - Companies Law

Approval of the Scheme of Amalgamation - Sections 230 to 232 of the Companies Act, 2013 r/w the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT - Para 6 of the Scheme provides that the amalgamation of each of the amalgamating companies shall be accounted for in the books of account of the amalgamated company in accordance with Pooling of Interests Method of accounting as per the accounting standard (AS) 14, Accounting for Amalgamations as prescribed under the Companies Rules, 2006 applicable to the amalgamated Company pursuant to Rule 3(2) of the Companies Rules, 2015 notified under section 133 of the Companies Act - There is no additional requirement for any modification and the Scheme of Amalgamation appears to be fair and reasonable and is not contrary to public policy and not violative of any provisions of law. All the statutory compliances have been made under Sections 230 to 232 of the Companies Act, 2013. The Company Petition is allowed and the Scheme of Amalgamation annexed with the Petitions is hereby Sanctioned.

Summary

Issues: Approval of Scheme of Amalgamation under Companies Act, 2013

In this judgment, the National Company Law Tribunal, Delhi considered the CAA-137/ND/2019 filed under Sections 230 to 232 of the Companies Act, 2013 for the approval of a Scheme of Amalgamation between several companies. The Scheme proposed the amalgamation of three Transferor Companies with a Transferee Company. The Tribunal reviewed the incorporation details of each company and the main objectives of the Transferee Company. It noted that the Board of Directors of the Transferor Companies had approved the Scheme and fulfilled all necessary requirements as per previous orders. The rationale behind the proposed scheme was outlined to benefit shareholders and stakeholders by consolidating group structure, enhancing growth prospects, reducing costs, and achieving operational efficiency. The Scheme also addressed the continuation of proceedings under applicable laws relating to taxes and confirmed the absence of winding-up petitions or pending investigations against the Transferor Companies.

The Regional Director, Ministry of Corporate Affairs, sought directions regarding the fee payable on the revised authorized share capital of the Amalgamated Company as per Section 232(3)(i) of the Companies Act, 2013. The Official Liquidator's report confirmed that the affairs of the Transferor Companies were not conducted in a prejudicial manner. The Scheme provided for the accounting treatment of the amalgamation as per the "Pooling of Interests Method" of accounting and complied with relevant accounting standards. The Tribunal found the Scheme fair, reasonable, compliant with statutory provisions, and not contrary to public policy or any laws.

Consequently, the Tribunal allowed the Company Petition and sanctioned the Scheme of Amalgamation, making it binding on shareholders, creditors, and employees of the companies involved. The appointed date of the Scheme was set as 01.04.2018. The Order clarified that it did not grant exemption from stamp duty, taxes, or any charges payable under the law. It allowed parties to apply for necessary directions related to the Scheme's implementation and required the filing of a certified copy of the Order with the Registrar of Companies within 30 days. The Order directed the dissolution of the Transferor Companies without winding up upon filing the certified copy. It also instructed the consolidation of documents and records of the Transferor Companies with those of the Transferee Company. The Registry was tasked with preparing the Order of sanction in accordance with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. Ultimately, the Scheme was sanctioned, and the case CAA-137/ND/2019 was disposed of.