2020 (10) TMI 171 - Tri - Companies Law

Approval of the Composite Scheme of Amalgamation - Section 230 to 232 and other applicable provisions of the Companies Act, 2013 read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT - Prior approval from Ministry of Civil Aviation is required to be obtained before sanction of the Scheme by this Tribunal. In the present case, the petitioner company has not placed on record the requisite approval, if any, obtained from the Ministry of Civil Aviation - taking in consideration of the said factum, the approval of the Scheme by this Tribunal is conditional upon the requisite sanction and approval from the Ministry of Civil Aviation in accordance with the prescribed guidelines. 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 (other than the one which is mentioned in para 15), this Tribunal, subject to para 16, sanctions the Scheme of Amalgamation, which are annexed as Annexure A9 with the Company Petition as well as the prayer made therein - the scheme is approved.

Summary

Issues:
Approval of Composite Scheme of Amalgamation under Sections 230 to 232 of Companies Act, 2013.

Detailed Analysis:
The Joint Company Petitions were filed by two companies, the Transferor Company and the Transferee Company, for the approval of the Composite Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013. The Registered Offices of both companies are in Tamil Nadu. The Tribunal had previously issued directions regarding convening meetings of creditors and shareholders, and notices were duly served to statutory and regulatory authorities as per the order dated 18.07.2019. Affidavits of service were filed, and compliance with the directions was confirmed. Additional notices were served to sectoral regulators as directed by the Tribunal, and compliance was reported. The Regional Director and Official Liquidator submitted reports supporting the Scheme, confirming no adverse observations regarding the companies' affairs.

The Chartered Accountant appointed by the Official Liquidator verified the Transferor Company's books of accounts and found no adverse observations. The Official Liquidator also sought remuneration for the Auditor, which was directed to be paid by the Transferor Company. Despite notice, no representation was made by the Department of Income Tax, Civil Aviation, or RBI. The Scheme included provisions for continuation of legal proceedings by the Transferee Company. The Tribunal considered a previous judgment regarding the IT Department's rights in a Scheme of Amalgamation. The companies complied with accounting standards and confirmed no pending investigation or proceedings for oppression or mismanagement.

The Ministry of Civil Aviation's approval was highlighted as a requirement for the Scheme's sanction. While no objection was raised by any other party, the Tribunal conditioned its approval on obtaining the necessary approval from the Ministry of Civil Aviation. The Tribunal clarified that any deficiencies or violations of laws would not be excused by its sanction. Specific orders were issued regarding the transfer of properties, liabilities, employees, shares, and dissolution of the Transferor Company. The Appointed date for the Scheme was set as 1st April 2018, and directions were given for the registration and dissolution process. Any interested party was granted liberty to apply for necessary directions in the matter.

In conclusion, the Company Petition was allowed based on the terms and conditions outlined by the Tribunal, subject to the requisite approval from the Ministry of Civil Aviation and compliance with all legal requirements.