2021 (5) TMI 500 - Tri - Companies Law

Approval of 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 - From the records, it is seen that in the First Motion Application filed before this Tribunal vide CA/960 961/CAA/2019 wherein it was represented that there are 1 Preference Shareholder, 2 Equity Shareholders, 5 Unsecured Creditor and no Secured Creditor in relation to the Transferor Company and 2 Equity Shareholders, 8 Secured Creditors and 26 Unsecured Creditors in relation to the Transferee Company and based on the consent Affidavits obtained, accordingly sought for dispensation of the meeting of the Preference/Equity Shareholders and Secured/Unsecured Creditors of both the Transferor and Transferee Companies. Based on such application moved under Sections 230-232 of the Companies Act, 2013, this Tribunal vide its order dated 26.09.2019 dispensed with the meeting of the Preference/Equity Shareholders, and Secured/Unsecured Creditors of the Transferor and Transferee Companies and the second motion petition was filed before this Tribunal by the Petitioner Companies on 06.11.2019 for sanction of the Scheme of Amalgamation as contemplated between the Petitioner Companies. It is seen from the records that the Petitioner Companies have filed affidavits of service via email to the Registry of this Tribunal on 18.09.2020 in relation to the compliance of the order passed by the Tribunal as noted above and a perusal of the same discloses that the Petitioner Companies have effected the paper publication as directed by the Tribunal in one issue of News Today (Chennai Edition) in English and Dhinamani (Chennai Edition) in Tamil on 20.06.2020. Further notices have been also served to (i) The Regional Director, Southern Region, Chennai on 11.06.2020 (ii) Registrar of Companies, Chennai on 11.06.2020 (iii) Income Tax Authorities on 11.06.2020 (iv) Official Liquidator, Chennai on 11.06.2020 and proof of the same acknowledgements/receipts have also been enclosed. The Petitioner Companies have filed the certificate of the Independent Statutory Auditor in relation to compliance with the Accounting Standards with respect to the Scheme. Thus, the Petitioner Companies have complied with proviso to Section 230(7)/Section 232(3) of the Companies Act, 2013. The scheme is approved - application allowed.

Summary

Issues: Approval of Scheme of Amalgamation under Companies Act, 2013

Analysis:
1. The Company Petitions CP/1394 & 1395/CAA/2019 were filed for the approval of the Scheme of Amalgamation between the Transferor Company and Transferee Company under Sections 230 to 232 of the Companies Act, 2013, and other applicable provisions.

2. The First Motion Application sought dispensation of meetings of shareholders and creditors, which was granted by the Tribunal. The second motion petition was filed for the sanction of the Scheme of Amalgamation.

3. Notices were ordered to be issued to Statutory/Regulatory Authorities and published in newspapers. Affidavits of service were filed to show compliance with the Tribunal's orders.

4. The Regional Director's report highlighted provisions related to the merger of authorized capital, which required compliance by the Transferee Company. The Transferee Company undertook to fulfill the necessary requirements.

5. The Official Liquidator's report confirmed that the affairs of the Transferor Company were conducted properly. The Chartered Accountant's report also indicated compliance with various statutory requirements.

6. The Tribunal directed the Transferor Company to pay fees to the Official Liquidator for the Auditor's remuneration. The absence of objections from the Income Tax Department was noted.

7. The Independent Statutory Auditor's certificate regarding compliance with Accounting Standards was submitted by the Petitioner Companies.

8. The NCLT New Delhi's observations regarding the IT Department's rights in a similar case were considered, granting protection to the IT Department for recovery of any tax dues.

9. The Petitioner companies confirmed the absence of any pending investigation proceedings or actions against them under relevant provisions of the Companies Act.

10. With all statutory compliances fulfilled and no objections raised, the Tribunal sanctioned the Scheme of Amalgamation, with a caution that non-compliance with any law could lead to actions against responsible individuals.

11. The Tribunal clarified that its order did not exempt the parties from payment of stamp duty, taxes, or other charges required by law.

12. Detailed orders were issued regarding the transfer of properties, liabilities, continuation of proceedings, appointed date, employee transfers, share allotments, filing of revised documents, and dissolution of the Transferor Company.

13. Any interested party was given the liberty to apply for necessary directions to the Tribunal. The Company Petitions were allowed based on the terms mentioned in the judgment.