2020 (9) TMI 518 - Tri - Companies Law

Sanction of Amalgamation Scheme - sections 230 to 232 of the Companies Act, 2013 - HELD THAT - The observations made by the Regional Director have been explained by the Petitioner Companiesas above. Moreover, the Petitioner Companies undertake to comply with all statutory requirements, as required under the Act and the Rules made thereunder. The clarifications and undertakingsgiven by the Petitioner Companies are accepted. From the material on record, the Scheme of Arrangement appears to be fair and reasonable and so far not in violation of any provisions of law, nor contrary to public interest - the scheme is sanctioned - It shall be binding on the Petitioners and the Companies involved in the Scheme and all concerned including their respective Shareholders, Secured Creditors, Unsecured Creditors/Trade Creditors and Employees.

Summary

Issues Involved:
Sanction under sections 230 to 232 of the Companies Act, 2013 for a Scheme of Arrangement between two companies and their shareholders.

Detailed Analysis:

1. Scheme of Arrangement Approval:
The petition sought sanction under sections 230 to 232 of the Companies Act, 2013 for a Scheme of Arrangement between two companies and their respective shareholders. Both companies, engaged in software-related services and trading, were involved in the scheme, with the Resulting Company set to operate and maintain the Demerged Undertaking post-approval. The Scheme was approved by board resolutions of both companies, and all equity shareholders provided consent affidavits. The Court noted that no opposition to the Scheme was presented.

2. Regional Director's Report and Compliance:
The Regional Director highlighted various aspects in their report, including compliance with accounting standards, the appointed date, approval by members and creditors, and serving notices to relevant authorities. The Petitioners responded by providing clarifications and undertakings to address each point raised by the Regional Director. They assured compliance with accounting standards, confirmed consistency in the Scheme documents, and undertook to serve notices to concerned authorities as required.

3. Fairness and Compliance:
The Tribunal found the Scheme of Arrangement to be fair, reasonable, compliant with statutory requirements, and not in violation of any law or public interest. All requisite statutory compliances were fulfilled, leading to the absolute approval of the petition. The Court emphasized that the Scheme would be binding on all parties involved, including shareholders, creditors, and employees of the companies.

4. Sanction and Directions:
The Petition was allowed, subject to specific directions. The Scheme was sanctioned, binding on all parties involved. The Petitioner Companies were directed to file a certified copy of the Order and the Scheme with the Registrar of Companies, comply with undertakings, issue newspaper publications, and take all necessary steps as per the provisions of the Act. Any interested person was granted liberty to apply to the Tribunal for further directions if needed.

In conclusion, the Tribunal granted sanction to the Scheme of Arrangement, ensuring compliance with legal requirements and safeguarding the interests of all stakeholders involved. The detailed analysis covered the approval process, responses to the Regional Director's report, fairness assessment, and specific directions issued by the Court for implementation and compliance.