2020 (12) TMI 957 - Tri - Companies Law

Approval of Scheme of Amalgamation - Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT - In his report, the Regional Director, MCA has submitted that the Scheme appears to be fair, reasonable and is not detrimental against the Members or Creditors or contrary to public policy and the same can be approved. Replies have also been furnished in respect of the observations of the Income tax Department and the Competition Commission of India. As per the Petition, the Scheme in question will help in bringing valuable synergies in the operations, in scaling up the business of the undertaking of the Transferor Company resulting in expanding the reach and business base and would enable the Companies concerned to rationalize and streamline their management and finances and will pave better and more productive, economical control and running of the operations, etc. We are satisfied that the procedure specified in sub-sections (1) and (2) of section 232 of the Companies Act, 2013 has been complied with, and hence the Scheme of Amalgamation, as approved by the Boards of both the Transferor and Transferee Companies, is hereby sanctioned, as prayed - Scheme is sanctioned - application allowed.

Issues Involved:
1. Approval of the Scheme of Amalgamation.
2. Compliance with regulatory requirements.
3. Tax implications and liabilities.
4. Related party transactions.
5. Compliance with FEMA/RBI regulations.
6. Compliance with the Companies Act, 2013.
7. Objections and observations from statutory authorities.

Detailed Analysis:

1. Approval of the Scheme of Amalgamation:
The Petitioner Companies, M/s. Bloom Energy International (India) Private Limited (Transferor Company) and M/s. Bloom Energy (India) Private Limited (Transferee Company), sought sanction of the Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013. The Board of Directors of both companies approved the scheme on 04.07.2019, with the appointed date of the merger being 1st April 2019. The Tribunal sanctioned the Scheme of Amalgamation, stating, "The Scheme of Amalgamation (as annexed with this Petition) is hereby sanctioned and the Appointed Date of the Scheme shall be 01st April, 2019."

2. Compliance with Regulatory Requirements:
The Transferor and Transferee Companies filed applications to dispense with meetings of Equity Shareholders and Unsecured Creditors, which the Tribunal approved. Notices were issued to various authorities, including the Regional Director, Registrar of Companies (ROC), Official Liquidator, and others. The ROC and Regional Director's reports were considered, and the Tribunal noted that the Scheme "appears to be fair, reasonable and is not detrimental against the Members or Creditors or contrary to public policy."

3. Tax Implications and Liabilities:
The ROC's report highlighted certain dues of Income Tax. The Petitioner Companies confirmed compliance with tax regulations and ongoing disputes. The Tribunal ordered, "The tax implications, if any, specially under the Income tax Act, 1961, arising out of the Scheme are subject to final decision of Concerned Tax Authorities and the decision of the Concerned Tax Authorities shall be binding on the Transferee Company."

4. Related Party Transactions:
The ROC observed related party transactions in the years 2017-18 and 2018-19. The Petitioner Companies confirmed compliance with Section 188 of the Companies Act, 2013. The Tribunal noted, "The Petitioner confirm that both the Transferor and Transferee Company have entered into transactions with the related parties in compliance with the provisions of Section 188 of the Act."

5. Compliance with FEMA/RBI Regulations:
The ROC and Regional Director noted that the companies must comply with FEMA/RBI requirements. The Petitioner Companies confirmed compliance and undertook to continue compliance post-approval. The Tribunal directed, "Petitioner Companies shall ensure all requisite compliances under the FEMA/RBI Regulations, Guidelines, as may be applicable."

6. Compliance with the Companies Act, 2013:
The Scheme was examined for compliance with the Companies Act, 2013. The Tribunal found that the procedure specified in sub-sections (1) and (2) of section 232 had been complied with. The Tribunal ordered, "The Petitioner Companies will ensure full compliance of their Affidavits and all provisions of the Companies Act, 2013, as may be applicable."

7. Objections and Observations from Statutory Authorities:
The ROC, Regional Director, Competition Commission of India, Reserve Bank of India, and Income Tax Department provided observations and reports. The Tribunal considered these, noting compliance or undertakings to comply with all relevant regulations. The Tribunal stated, "Replies have also been furnished in respect of the observations of the Income tax Department and the Competition Commission of India."

Conclusion:
The Tribunal sanctioned the Scheme of Amalgamation, subject to compliance with all regulatory requirements, tax implications, and statutory provisions. The order included directives for the transfer of assets and liabilities, compliance with FEMA/RBI regulations, and submission of statutory returns. The Tribunal concluded, "CP (CAA) No.09/BB/2020 and CP (CAA) No.10/BB/ 2020 are disposed of as above along with pending IAs, if any."

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