2020 (12) TMI 374 - Tri - Companies Law

Sanction of scheme of amalgamation - section 230-232 of the Companies Act, 2013 - HELD THAT - The scheme is approved as all statutory requirements are fulfilled. While approving the scheme of amalgamation, we make it clear that this order should not be construed as an order in any way granting exemption from payment of stamp duty, taxes or any other charges, if any, payable in accordance with law or in respect of any permission/compliance with any other requirement which may be specially required under law.

Issues Involved:
1. Sanction of the scheme of amalgamation under sections 230-232 of the Companies Act, 2013.
2. Compliance with statutory requirements and observations from the Regional Director and Official Liquidator.
3. Accounting treatment and valuation report.
4. Tax implications and stamp duty.
5. Preservation of books of accounts and statutory compliance.

Issue-wise Detailed Analysis:

1. Sanction of the Scheme of Amalgamation:
The application was filed jointly by Karix Mobile P. Ltd. (Transferor Company No. 1), Unicel Technologies P. Ltd. (Transferor Company No. 2), and Tarda Corporation P. Ltd. (Transferee Company) under sections 230-232 of the Companies Act, 2013, seeking sanction for the amalgamation scheme. The scheme aimed to integrate the businesses of the transferor companies with the transferee company to strengthen market position and enhance value creation. The board of directors of the petitioner companies approved the scheme on August 30, 2019. The rationale included pooling resources, achieving economies of scale, and improving operational efficiencies.

2. Compliance with Statutory Requirements and Observations:
The Tribunal directed the petitioner companies to issue notices to the Regional Director, Official Liquidator, and IT Department, and publish notices in newspapers. The Regional Director and Official Liquidator submitted their reports with several observations:

- Preservation of Books and Records: The petitioner companies undertook to comply with section 239 of the Companies Act, 2013, ensuring books and records are preserved and not disposed of without prior permission.
- Statutory Compliance: The companies assured compliance with all applicable laws and statutory liabilities.
- Filing of Order and Revised Authorized Capital: The companies agreed to file necessary applications indicating revised authorized capital and pay prescribed fees.
- FEMA Compliance: The petitioner companies confirmed compliance with FEMA provisions regarding the transfer of shares.
- Unsecured Creditors' Meeting: The meeting of unsecured creditors was held, and the scheme was approved by the majority present, fulfilling the requirements of section 230(6).

3. Accounting Treatment and Valuation Report:
The statutory auditors certified that the accounting treatment proposed in the scheme complied with applicable Accounting Standards. The petitioner companies clarified that there were no differences in accounting policies between the transferor and transferee companies, thus clause 13.3 was removed from the final scheme. The valuation report was deemed unnecessary as the transferor companies were wholly-owned subsidiaries of the transferee company, and no shares were required to be issued.

4. Tax Implications and Stamp Duty:
The Tribunal specified that the order should not be construed as granting exemption from stamp duty, taxes, or other charges payable under law. The tax implications arising from the scheme are subject to the final decision of the concerned tax authorities. The transferee company was directed to pay any difference in stamp duty over the increase in share capital after setting off fees paid by the transferor companies.

5. Preservation of Books of Accounts and Statutory Compliance:
The petitioner companies were directed to preserve their books of accounts and records, ensuring compliance with section 239 of the Companies Act, 2013. They were also required to file a statement annually, certified by a Chartered Accountant, Cost Accountant, or Company Secretary, confirming compliance with the scheme as per section 232(7).

Final Order:
The Tribunal approved the scheme of amalgamation, making it effective from the appointed date, April 10, 2019. The order included several directives, such as the transfer of property, rights, liabilities, and duties to the transferee company, continuation of pending proceedings, filing of the order with the Registrar of Companies, and compliance with accounting standards. The transferor companies were to be dissolved without winding up, and the transferee company was to change its name to Karix Mobile P. Ltd. The Tribunal also allowed for any person to apply for necessary directions in the matter.

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