2021 (8) TMI 682 - Tri - Companies Law

Sanction of Scheme of Amalgamation - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT - From the material on record, the Scheme appears to be fair and reasonable and does not violate of any provisions of law and is not contrary to public policy - Since all the requisite statutory compliances have been fulfilled, Company Petition filed by the Petitioner Companies has been made absolute in terms of prayer made in the petition. The scheme is sanctioned hereby, and the Appointed Date of the scheme is 1st April 2019. The Transferor Companies shall stand dissolved without the process of winding up - Application allowed.

Issues Involved:
1. Approval of the Amalgamation Scheme.
2. Compliance with statutory requirements and accounting standards.
3. Observations and objections raised by the Regional Director.
4. Compliance with the provisions of the Companies Act, 2013.
5. Reporting and dissemination of the Tribunal's order.

Issue-wise Detailed Analysis:

1. Approval of the Amalgamation Scheme:
The Tribunal convened through a virtual hearing and heard the counsel for the Petitioner Companies. The Scheme involved the amalgamation of ANJ Buildcon Private Limited (Transferor Company) and ANJ Turnkey Projects Private Limited (Transferee Company). The Petitioner Companies stated that the amalgamation would result in various benefits such as the establishment of a larger company with greater resources, enhanced management control, synergies in operations, and cost savings. The Board of Directors of both companies had unanimously approved the Scheme on 11 January 2019.

2. Compliance with statutory requirements and accounting standards:
The Petitioner Companies filed the Company Scheme Petition in accordance with Sections 230 to 232 of the Companies Act, 2013. They complied with all Tribunal directions and undertook to comply with all statutory requirements under the Companies Act, 2013. The Regional Director's report dated 11 February 2021 noted that the Scheme was not prejudicial to the interests of shareholders and the public, provided certain conditions were met. These included compliance with AS-14 (IND AS-103) and other applicable accounting standards, and ensuring the Scheme's Appointed Date and Effective Date were in compliance with Section 232(6) of the Companies Act, 2013.

3. Observations and objections raised by the Regional Director:
The Regional Director raised several observations, including the need for compliance with accounting standards, the requirement for shareholder and creditor approval, and the need for affidavits confirming the Scheme's consistency. The Petitioner Companies responded to each observation, providing undertakings and clarifications. For example, they confirmed compliance with accounting standards, affirmed that the Scheme's Appointed Date was 1 April 2019, and stated that all necessary notices had been served to concerned authorities. They also clarified that the Transferor Company did not hold any equity shares in the Transferee Company, thus certain clauses related to share capital reduction did not apply.

4. Compliance with the provisions of the Companies Act, 2013:
The Petitioner Companies confirmed compliance with various provisions of the Companies Act, 2013, including Sections 230, 232, and 66. They undertook to comply with the Income Tax Act, 1961, and confirmed that the Scheme was approved by the requisite majority of members and creditors. The Tribunal accepted the affidavits in rejoinder filed by the Petitioner Companies, which addressed the observations made by the Regional Director.

5. Reporting and dissemination of the Tribunal's order:
The Tribunal sanctioned the Scheme with the Appointed Date as 1 April 2019, and the Transferor Companies were to be dissolved without winding up. The Petitioner Companies were directed to publish the Tribunal's approval in the same newspapers where previous publications were made and to host the order on their websites. They were also instructed to lodge a certified copy of the order with the Superintendent of Stamps for adjudication of stamp duty within 60 days and to file the order with the Registrar of Companies electronically in e-form INC-28 within 30 days.

Conclusion:
The Tribunal found the Scheme to be fair, reasonable, and compliant with legal provisions. All requisite statutory compliances were fulfilled, and the Scheme was sanctioned. The Petitioner Companies were directed to ensure proper dissemination and reporting of the Tribunal's order to all concerned authorities and stakeholders.

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