2020 (9) TMI 710 - Tri - Companies Law

Approval of the Scheme of Amalgamation - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT - The Company Petition is allowed and the Scheme of Amalgamation annexed with the Petitions 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 01.04.2017 - 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 scheme is sanctioned.

Summary

Issues involved:
1. Approval of Scheme of Amalgamation between two private limited companies under Sections 230 to 232 of the Companies Act, 2013.
2. Compliance with statutory requirements and regulations for the proposed merger.
3. Financial and operational implications of the amalgamation.
4. Observations and reports from regulatory bodies like the Ministry of Corporate Affairs, Reserve Bank of India, Income Tax Department, and Official Liquidator.
5. Provisions related to assets, liabilities, employees, and accounting treatment post-merger.
6. Sanctioning of the Scheme of Amalgamation and its binding effect on stakeholders.
7. Dissolution of the Transferor Company and consolidation of records with the Transferee Company.

Detailed Analysis:
1. The judgment pertains to a petition filed for the approval of a Scheme of Amalgamation between two private limited companies, namely the Transferor Company and the Transferee Company, under Sections 230 to 232 of the Companies Act, 2013. The scheme aims at merging the Transferor Company with the Transferee Company as a going concern, with detailed provisions outlined in the scheme document.

2. The judgment discusses the incorporation details and business activities of both companies, highlighting the approval of the proposed Scheme by the Board of Directors of the Petitioner Companies. It mentions the fulfillment of necessary requirements and the dispensation of meetings of shareholders and creditors as per previous orders.

3. The judgment elaborates on the rationale behind the proposed amalgamation, emphasizing benefits such as improved finances, resource mobilization, operational efficiency, and regulatory compliance. It addresses the reduction in legal and administrative burdens post-merger and the enhancement of shareholder value.

4. Various reports and observations from regulatory bodies like the Ministry of Corporate Affairs, Reserve Bank of India, Income Tax Department, and Official Liquidator are discussed. These reports raise concerns regarding financial disclosures, compliance issues, and pending matters that need to be addressed by the Petitioner Companies.

5. Detailed provisions related to the treatment of assets, liabilities, employees, and accounting methods post-merger are outlined in the judgment. It specifies the incorporation of Transferor Company's assets and liabilities into the books of the Transferee Company, along with the transfer of staff and adherence to accounting standards.

6. The judgment ultimately sanctions the Scheme of Amalgamation, binding it on the shareholders, creditors, and employees of the companies involved. It sets the Appointed Date of the Scheme and clarifies that the order does not exempt the companies from stamp duty, taxes, or other charges as per the law.

7. The judgment further directs the dissolution of the Transferor Company without winding up upon filing the certified copy of the order with the Registrar of Companies. It instructs the consolidation of documents and records of both companies and provides guidelines for the implementation and documentation of the sanctioned Scheme.

This comprehensive analysis covers the legal aspects, compliance requirements, financial implications, and procedural details outlined in the judgment regarding the approval and implementation of the Scheme of Amalgamation between the two private limited companies.