2020 (11) TMI 679 - Tri - Companies Law

Approval of Scheme of Amalgamation - section 230 and 232 of the Companies Act, 2013 r/w the Companies (Compromises, Arrangements and Amalgamations) Rules 2016 - HELD THAT - Perusal of the scheme shows that the accounting treatment is in conformity with the established accounting standards. In short, there is no apprehension that any of the creditors would lose or be prejudiced if the proposed scheme is sanctioned. The said Scheme of Amalgamation will not cast any additional burden on the stakeholders and also will not prejudicially affect the interests of any class of the creditors in any manner. The Appointed date of the said Scheme is 01st April, 2018 - Petitioner Companies have stated that the scheme Proposed does not fall within the ambit of sections 5 and 6 of the Competition Act, 2002. The scheme does not require any modification as it appears to be fair and reasonable, not contrary to public policy and also not violative of any provisions of law. All the statutory compliances have been made under section 230 to 232 of the Companies Act, 2013 r/w the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The Scheme of Amalgamation between the Transferor Companies 1 2 and the Transferee Company was duly approved by the shareholders of respective companies - Petition allowed.

Issues Involved:

1. Approval of the Scheme of Amalgamation under sections 230 and 232 of the Companies Act, 2013.
2. Compliance with statutory requirements.
3. Valuation and share exchange ratio.
4. Benefits and rationale of the amalgamation.
5. Protection of stakeholders' interests.
6. Compliance with the Competition Act, 2002.
7. Payment of fees and compliance with legal provisions.

Issue-wise Detailed Analysis:

1. Approval of the Scheme of Amalgamation:
The petitions CP/246/CAA/2020, CP/247/CAA/2020, and CP/248/CAA/2020 were filed under sections 230 and 232 of the Companies Act, 2013, for the amalgamation of M/s. Helios Solutions Limited (Transferor Company-1) and M/s. A-Diet Express Hospitality Service Limited (Transferor Company-2) with M/s. Indrayani Biotech Limited (Transferee Company). The Tribunal sanctioned the scheme, making it binding on all members, creditors, and shareholders.

2. Compliance with Statutory Requirements:
The Tribunal noted that the Transferor Companies and the Transferee Company complied with all statutory requirements under sections 230 to 232 of the Companies Act, 2013, and the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. Meetings of shareholders and creditors were convened as ordered, and results were filed with the Tribunal.

3. Valuation and Share Exchange Ratio:
The share exchange ratio was computed based on a valuation report from Chartered Accountants using asset-based and income-based approaches. The Tribunal referenced the Supreme Court's observation in Miheer H. Mafatlal vs. Mafatlal Industries Ltd, stating that the court should not substitute its exchange ratio if the valuation is done by recognized experts and accepted by the majority of shareholders.

4. Benefits and Rationale of the Amalgamation:
The rationale for the amalgamation included the utilization of financial resources, enlargement of debt capacity, increased leverage and earnings per share, and reduced start-up costs. The amalgamation aimed to rationalize and consolidate business activities, reduce administrative costs, and attract new investors, thereby enhancing financial stability and performance.

5. Protection of Stakeholders' Interests:
The scheme provided for the protection of employees' interests and ensured that no burden would be placed on shareholders and creditors. The Regional Director confirmed that the companies were regular in filing statutory returns, and no investigations were pending. The Official Liquidator's report indicated that the statutory books were maintained according to accepted accounting principles, and the affairs were not conducted prejudicially.

6. Compliance with the Competition Act, 2002:
The Petitioner Companies stated that the scheme did not fall within the ambit of sections 5 and 6 of the Competition Act, 2002, indicating no requirement for modification or compliance under this Act.

7. Payment of Fees and Compliance with Legal Provisions:
The Tribunal directed the Transferee Company to comply with section 232(3)(i) of the Companies Act, 2013, regarding the payment of differential fees for enhanced authorized capital. The Transferor Companies were directed to pay ?50,000 each to the Official Liquidator and the appointed Chartered Accountants within 15 days. The order clarified that it did not grant exemption from stamp duty, taxes, or other charges.

Conclusion:
The Tribunal sanctioned the Scheme of Amalgamation, ensuring compliance with all statutory requirements and protecting stakeholders' interests. The Transferor Companies were ordered to be dissolved without winding up, and the scheme was deemed fair, reasonable, and not contrary to public policy. The sanctioned scheme was to be filed with the Registrar of Companies within 30 days.

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