2021 (11) TMI 844 - Tri - Companies Law

Sanction of Scheme of Arrangement - Section 23(1)(b) Read with Section 232 of the Companies Act, 2013, Read with Rule 15 (1) of Companies (Compromises, Arrangements and Amalgamation) Rules, 2016 and Rule 23A of the National Company Law Tribunal Rules, 2016 - HELD THAT - Various directions with regard to holding, convening and dispensing with various meetings issued - various directions with regard to issuance of notices also issued. The scheme is approved - application allowed.

Summary

Issues:
1. Sanction of the arrangement filed by three petitioner companies under specific sections of the Companies Act, seeking approval for the scheme of arrangement.
2. Details of the transferor and transferee companies involved in the scheme, including their incorporation details, assets, liabilities, and main objects.
3. Approval process of the scheme by equity shareholders, secured creditors, and unsecured creditors.
4. Financial statements, auditor reports, and implications of the scheme on the petitioner companies and their shareholders.
5. Observations and reports from the Official Liquidator, Income Tax Department, and Regional Director, and their impact on the scheme.
6. Directions and orders given by the Tribunal regarding the sanctioned scheme of arrangement.

Analysis:
1. The petition was filed by three petitioner companies seeking sanction of the arrangement under specific sections of the Companies Act, 2013. The scheme of arrangement aimed at transferring assets, liabilities, and debts from the transferor companies to the transferee company, effective from the appointed date of 01.04.2020.
2. The transferor companies, incorporated under the Companies Act, 1956, were engaged in property acquisition and development businesses. The transferee company, an unlisted public company, focused on civil, electrical, and mechanical works. The scheme involved the transfer of assets, liabilities, and employees to the transferee company.
3. The scheme was approved by equity shareholders, secured creditors, and unsecured creditors of the transferee company through meetings conducted by appointed chairpersons and scrutineers. The scheme did not involve any compromise with the creditors of the petitioner companies.
4. Audited and unaudited financial statements, along with auditor reports, confirmed the compliance of the scheme with accounting standards. The scheme was expected to benefit the petitioner companies and their shareholders by streamlining operations and reducing managerial overlaps.
5. Reports from the Official Liquidator, Income Tax Department, and Regional Director were considered. While the Official Liquidator did not raise objections, the Income Tax Department did not object to the scheme. The Regional Director raised observations regarding pending cases under IBC by operational creditors, which were addressed by the petitioner companies.
6. The Tribunal sanctioned the scheme of arrangement, binding on all concerned parties. Directions were given regarding submission to the Registrar of Companies, discharge of operational creditors' debts, newspaper publication, and necessary compliance with objections raised by the Official Liquidator and the Regional Director.

This detailed analysis outlines the key aspects of the judgment, including the parties involved, approval process, financial implications, and regulatory considerations, leading to the sanction of the scheme of arrangement by the Tribunal.