2021 (7) TMI 487 - Tri - Companies Law

Approval of Scheme of Amalgamation - Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 - HELD THAT - The Scheme of Amalgamation, annexed with the petition as Annexure-A is sanctioned by this Tribunal to be binding with effect from 01.04.2017 on the Transferor Companies with the Transferee Company and their respective shareholders and all concerned. Application allowed.

Issues Involved:
1. Sanction of the Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013.
2. Compliance with Tribunal's directions and statutory requirements.
3. Financial details and compliance status of Transferor Companies.
4. Justification for the Scheme of Amalgamation.
5. Observations and objections raised by the Official Liquidator and Regional Director.
6. Final orders on the Scheme of Amalgamation.

Issue-wise Detailed Analysis:

1. Sanction of the Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013:
The Tribunal's sanction was sought for the Scheme of Amalgamation involving six Transferor Companies and one Transferee Company, with the effective date being 01st April 2017. The Scheme aimed to transfer all assets, liabilities, rights, and powers of the Transferor Companies to the Transferee Company on a going concern basis.

2. Compliance with Tribunal's directions and statutory requirements:
The Tribunal had previously issued directions on 11th July 2019 to dispense with meetings of Equity Shareholders and creditors, given the consent letters and affidavits received. Notices were duly served to the Central Government, Registrar of Companies, West Bengal, and other regulatory authorities. Joint publication was made in newspapers on 7th February 2020, and notices were served to all requisite statutory authorities.

3. Financial details and compliance status of Transferor Companies:
The financial details of each Transferor Company, including their Authorized Share Capital, Issued, Subscribed, and Paid-up Share Capital, and latest Audited Balance Sheets for the years ending March 31, 2018, and March 31, 2019, were provided. The Authorized Share Capital ranged from ?5,00,000 to ?2,10,00,000, and the Paid-up Share Capital ranged from ?3,30,000 to ?2,04,42,000.

4. Justification for the Scheme of Amalgamation:
The Scheme was justified on several grounds:
- All Petitioner Companies were under the same management and promoter group.
- Transferor Companies were involved in construction and trading activities, while the Transferee Company was engaged in manufacturing.
- The amalgamation aimed to consolidate the group structure, provide synergies in business activities, and enable the combined strength of the companies.
- It would result in economies of scale, better utilization of resources, and more profitable business operations.
- The amalgamation would establish a larger company with greater resources and capital base, benefiting shareholders, employees, and all concerned.

5. Observations and objections raised by the Official Liquidator and Regional Director:
The Official Liquidator reported that the affairs of the Transferor Companies were not conducted prejudicially to members or public interest. The Regional Director raised several observations:
- Concerns regarding the valuation report and related Board Meetings.
- Requirement of RBI's NOC for the merger involving Jeenma Business Private Limited, an NBFC.
- Defective financial statements of Jeenma Business Private Limited and Sahal Traders Private Limited for 2018-19.
The Petitioner Companies addressed these concerns by submitting necessary documents, obtaining RBI's NOC, and filing corrective forms on the MCA Portal.

6. Final orders on the Scheme of Amalgamation:
The Tribunal sanctioned the Scheme of Amalgamation with effect from 01.04.2017, binding the Transferor Companies with the Transferee Company and their respective shareholders. Key orders included:
- Transfer of all properties, rights, and interests of the Transferor Companies to the Transferee Company.
- Transfer of all liabilities and duties to the Transferee Company.
- Continuation of pending proceedings by or against the Transferee Company.
- Issuance and allotment of shares by the Transferee Company to the shareholders of Transferor Companies.
- Dissolution of Transferor Companies without winding-up.
- Filing of the schedule of assets within 60 days.
The Company Petition was disposed of accordingly, and urgent certified copies of the order were to be supplied upon compliance with requisite formalities.

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