2021 (5) TMI 108 - Tri - Companies Law

Approval of scheme of Amalgamation - section 230-232 of Companies Act - HELD THAT - This Tribunal is of the considered view that the scheme as contemplated amongst the petitioner companies seems to be prima facie in compliance with the provisions of the Companies Act, 2013. Further there seems to be no objection on the part of the shareholders that the Scheme is in any way detrimental to the interest of the shareholders of the Company. 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, this Tribunal sanctions the Scheme of Amalgamation appended as Annexure 4 as well as the prayer made therein. The scheme is approved - application allowed.

Issues Involved:
1. Approval of the Scheme of Amalgamation.
2. Dispensation of meetings for Equity Shareholders and Unsecured Creditors.
3. Compliance with statutory/regulatory authorities.
4. Objections raised by the Regional Director.
5. Report by the Official Liquidator.
6. Response from other statutory authorities.
7. Accounting treatment.
8. Observations and final decision by the Tribunal.

Detailed Analysis:

1. Approval of the Scheme of Amalgamation:
The joint Company Petition CP(CAA)/1/CHE/2021 was filed for the approval of the Scheme of Amalgamation between M/s. Quest Compbio Private Limited (Transferor Company) and M/s. Sekkei Bio Private Limited (Transferee Company) under Sections 230 to 232 of the Companies Act, 2013. The Scheme aimed to integrate, rationalize, and streamline the management structure, strengthen financial position, ensure focused management, and pool resources for cost savings.

2. Dispensation of meetings for Equity Shareholders and Unsecured Creditors:
In the First Motion Application CA/397/CAA/2020, the Tribunal dispensed with the meetings of Equity Shareholders and Unsecured Creditors of both companies, as there were no Secured Creditors. This was based on directions issued on 10.12.2020. Consequently, the present Petition was filed on 17.12.2020 for the Tribunal's sanction of the Scheme.

3. Compliance with statutory/regulatory authorities:
The Tribunal, in its order dated 12.02.2020, directed the Petitioner Companies to issue notices to statutory/regulatory authorities including the Regional Director (Southern Region), RoC Chennai, the Income Tax Department, and the Official Liquidator, and to publish notices in "Business Standard" and "Makkal Kural."

4. Objections raised by the Regional Director:
The Regional Director (RD) filed a report on 15.02.2021, noting that Clause 12 of the Scheme protected employees' interests and that both companies were compliant with statutory filings. However, the RD raised an objection regarding the non-payment of fees/stamp duty for the enhanced authorized capital as required under Section 232(3)(i). The Transferee Company undertook to pay the necessary fee/stamp duty for the increased authorized capital.

5. Report by the Official Liquidator:
The Official Liquidator (OL) appointed a Chartered Accountant to verify the Transferor Company's affairs. The Chartered Accountant's report confirmed that the company's accounts were properly audited, statutory registers were maintained, returns were filed, no public deposits were accepted, and income tax returns were regularly filed. The Tribunal directed the Transferor Company to pay ?25,000 to the OL for the auditor's fees.

6. Response from other statutory authorities:
No objections were raised by the Income Tax Department or the Reserve Bank of India. The Tribunal presumed that these authorities had no objections to the Scheme.

7. Accounting treatment:
The Statutory Auditors certified that the Scheme's accounting treatment complied with the applicable Indian Accounting Standards, as required under Section 230(7)/Section 232(3). The certificates were submitted as part of the petition.

8. Observations and final decision by the Tribunal:
The Tribunal found the Scheme to be prima facie compliant with the Companies Act, 2013, and noted no objections from shareholders. The Tribunal sanctioned the Scheme of Amalgamation, ensuring that all properties, rights, liabilities, and employees of the Transferor Company would transfer to the Transferee Company. The appointed date for the Scheme was set as 1st April 2019. The Tribunal clarified that the order did not exempt the companies from paying any due fees, taxes, or complying with other legal requirements. The Tribunal also directed the companies to file the revised Memorandum and Articles of Association and make requisite payments for the enhanced authorized capital.

Conclusion:
The Company Petition was allowed, and the Scheme of Amalgamation was sanctioned on the terms mentioned, with directions for compliance with statutory requirements and provisions for the transfer of assets, liabilities, and employees from the Transferor to the Transferee Company.

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