2022 (4) TMI 1591 - Tri - Companies Law

Sanction of Composite Scheme of Amalgamation - Section 230 to 232 and other applicable provisions of the Companies Act, 2013 - HELD THAT - After analyzing the Scheme in detail, this Tribunal is of the considered view that the scheme as contemplated amongst the petitioner companies seems to be prima Mac/e in compliance with the provisions of the Companies Act, 2013. Further there seems to be no objection on the part of the shareholders that the Scheme is in any way detrimental to the interest of the shareholders of the Company. In view of absence of any other objections having been placed on record before this Tribunal and since all the requisite statutory compliances having been fulfilled, this Tribunal sanctions the Scheme of Amalgamation along with Company Petitions as well as the prayer made therein. The Company Petitions are allowed and the Composite Scheme of Amalgamation annexed with the Company Petition s is hereby sanctioned and shall be binding on the members, Secured, unsecured creditors and shareholders of the Transferor/ Transferee Companies.

Summary

Issues Involved:
1. Approval of the Composite Scheme of Amalgamation.
2. Dispensation of meetings for Equity Shareholders and Secured Creditors.
3. Convening meetings for Unsecured Creditors.
4. Compliance with statutory and regulatory requirements.
5. Observations and objections from statutory authorities.
6. Accounting treatment compliance.
7. Sanction and implementation of the Scheme.

Issue-wise Detailed Analysis:

1. Approval of the Composite Scheme of Amalgamation:
The judgment concerns the approval of a Composite Scheme of Amalgamation between M/s. Pallava Textiles Private Limited (Transferor Company) and M/s. Sri Cheran Synthetics India Private Limited (Transferee Company) under Sections 230 to 232 of the Companies Act, 2013. The Scheme involves definitions, amalgamation procedures, changes in share capital, and general terms and conditions.

2. Dispensation of Meetings for Equity Shareholders and Secured Creditors:
The Petitioner Companies filed an application seeking directions for dispensation of the meetings of Equity Shareholders and Secured Creditors. The Tribunal, on 22.09.2021, dispensed with these meetings and directed the holding of meetings for Unsecured Creditors.

3. Convening Meetings for Unsecured Creditors:
Meetings for Unsecured Creditors were held on 13th November 2021, with significant attendance and unanimous approval of the Scheme by the Unsecured Creditors of both companies.

4. Compliance with Statutory and Regulatory Requirements:
The Tribunal directed the Petitioner Companies to issue notices to various statutory/regulatory authorities and publish notices in specified newspapers. Compliance was confirmed through affidavits of service filed by the Petitioner Companies.

5. Observations and Objections from Statutory Authorities:

a. Regional Director (RD):
The RD reported that the Petitioner Companies were regular in filing statutory returns with no pending prosecutions or investigations. However, the RD noted that the Transferee Company must remit any fee/stamp duty differences and file amended MOA and AOA with the ROC.

b. Official Liquidator (OL):
The OL's report, based on a Chartered Accountant's examination, found no adverse issues affecting the Transferor Company. The OL noted the Transferor Company's adequate disclosure of contingent liabilities.

c. Income Tax Department:
Despite being served notice, the Income Tax Department did not respond. The Tribunal presumed no objections from the Department but emphasized that the Department retains the right to recover any statutory dues.

d. Other Statutory Authorities:
The Petitioner Companies’ shares are not listed, so compliance with SEBI Rules/Regulations was not required.

6. Accounting Treatment Compliance:
The Statutory Auditors certified that the Scheme's accounting treatment complies with the applicable Indian Accounting Standards. Auditor’s Certificates were filed confirming compliance with Section 133 of the Companies Act, 2013.

7. Sanction and Implementation of the Scheme:
The Tribunal found the Scheme prima facie compliant with the Companies Act, 2013, and no objections detrimental to shareholders' interests were raised. The Scheme was sanctioned with several orders, including:
- Transfer of properties, rights, and liabilities of the Transferor Company to the Transferee Company.
- Continuation of pending proceedings by or against the Transferee Company.
- Transfer of employees without service interruption.
- Filing of revised MOA and AOA by the Transferee Company.
- Allotment of shares to members of the Transferor Company.
- Delivery of certified copies of the order and Scheme to the Registrar of Companies.
- Payment of Rs. 50,000 to the Official Liquidator for Chartered Accountant fees.

The Tribunal clarified that the order does not exempt payment of stamp duty, taxes, or other charges due under the law. The Composite Scheme of Amalgamation was sanctioned and became binding on all stakeholders, with the Company Petitions disposed of accordingly.