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2020 (9) TMI 709 - Tri - Companies LawApproval 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 - The Company Petitions is/are allowed and the Scheme of Amalgamation annexed with the Petition(s) is hereby Sanctioned. The Scheme approved shall be binding on the Shareholders, Creditors and employees of the Companies involved in this Scheme. The Appointed date of the Scheme is 1st April, 2018. While approving the Scheme as above, it is further clarified that this Order will not be construed as an Order granting exemption from payment of stamp duty or taxes or any other charges, if payable, as per the relevant provisions of law or from any applicable permissions that may have to be obtained or, even compliances that may have to be made as per the mandate of law - The Companies to the said Scheme or other person interested shall be at liberty to apply to this Bench for any direction that may be necessary with regard to the working of the said Scheme. The Order of sanction to this Scheme shall be prepared by the Registry as per the relevant format provided under the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The scheme is approved.
Issues Involved:
1. Approval of the Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013. 2. Compliance with statutory requirements. 3. Objections from regulatory bodies (Regional Director, Official Liquidator, Income Tax Department). 4. Accounting treatment and employee transition. 5. Dissolution of Transferor Companies without winding up. Issue-wise Detailed Analysis: 1. Approval of the Scheme of Amalgamation: The Company Petition No. 169/(ND) 2019 was filed under Sections 230 to 232 of the Companies Act, 2013, read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, for the approval of the Scheme of Amalgamation. The Scheme involves the amalgamation of 19 Transferor Companies with the Transferee Company, Herbal Biosciences Private Limited. The Board of Directors of both the Transferor and Transferee companies approved the Scheme on 15th February 2019. 2. Compliance with Statutory Requirements: The Tribunal noted that all statutory compliances under Sections 230 to 232 of the Act, 2013, had been fulfilled. The requirement for convening/holding meetings of the Shareholders and Creditors of the Petitioner Companies was dispensed with by an order dated 19th November 2019. 3. Objections from Regulatory Bodies: - Regional Director (RD): The RD, Northern Region, Ministry of Corporate Affairs, filed an affidavit on 12th February 2020, indicating no objections to the Scheme. - Official Liquidator (OL): The OL reported no complaints against the proposed Scheme, and the affairs of the Transferor Companies were not conducted in a manner prejudicial to the interest of its members or the public. - Income Tax Department (ITD): The ITD filed its report noting no demands raised for most Transferor Companies. The Transferee Company undertook to honor all demands of the Transferor Companies and/or Transferee Company in accordance with the law. 4. Accounting Treatment and Employee Transition: - Accounting Treatment: Clause 11 Part II of the Scheme mandates that the Transferee Company shall give effect to accounting treatment in its books of accounts in accordance with accounting standards specified under section 133 of the Act, 2013. - Employee Transition: Clause 7 Part II of the Scheme ensures that all employees of the Transferor Companies shall become employees of the Transferee Company on terms and conditions not less favorable than those with the Transferor Companies, without any interruption or break in service. 5. Dissolution of Transferor Companies without Winding Up: The Scheme provides that upon becoming effective, the Transferor Companies shall be dissolved without any further act, deed, or instrument, without going through the process of winding up. The Order also directs that all documents relating to the Transferor Companies be consolidated with those of the Transferee Company. Conclusion: The Tribunal found the Scheme of Amalgamation to be fair, reasonable, and not contrary to public policy or any provisions of law. The Scheme was sanctioned and made binding on the Shareholders, Creditors, and employees of the involved Companies, with the appointed date being 1st April 2018. The Order clarified that it does not grant exemption from payment of stamp duty, taxes, or any other charges as per relevant laws. The Transferor Companies shall be dissolved without winding up upon filing the certified copy of the Order with the Registrar of Companies. The Scheme stands sanctioned, and the petition is disposed of accordingly.
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