2022 (1) TMI 68 - Tri - Companies Law

Sanction of Scheme of Amalgamation - Sections 230 and 232 and other applicable provisions of the Companies Act, 2013, read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT - There appears to be no reservation to grant sanction to the Scheme, the sanction of the present Scheme is not against public policy, nor it would be prejudicial to the public interest at large. All the statutory compliance seems to have been complied with by Transferor Companies and Transferee Company, therefore, the present Company Petition deserves to be allowed - the scheme is approved - application allowed.

Summary

Issues:
Approval of Scheme of Amalgamation under Sections 230 and 232 of the Companies Act, 2013

Analysis:
The joint company petition was filed by Transferor Companies and Transferee Company seeking approval for the Scheme of Amalgamation under Sections 230 and 232 of the Companies Act, 2013. The proposed scheme aimed at amalgamating multiple companies for organizational effectiveness, resource optimization, cost reduction, and better financial strength. The Board of Directors of the companies had approved the scheme, highlighting common control, management, and business location among the entities.

The petition detailed the share exchange ratio determined by the Board of Directors of the companies, along with the valuation and share exchange ratio report provided by the IBBI Registered Valuer. It was emphasized that the accounting treatment proposed in the scheme complied with the Accounting Standards under the Companies Act, 2013. The petition also confirmed the absence of pending legal proceedings against any of the companies under relevant sections of the Companies Act.

The Tribunal, after reviewing the reports of the Regional Director, Official Liquidator, and the absence of objection from the Income-Tax Department, found no reservations to grant sanction to the scheme. It was concluded that the scheme was not against public policy or prejudicial to public interest. All statutory compliances were deemed to have been met, leading to the approval and sanction of the proposed Scheme of Amalgamation.

The order specified that the scheme would be binding on all shareholders and creditors of the companies from the Appointed Date, i.e., 1st April 2020. However, it clarified that the order did not exempt the companies from payment of stamp duty, taxes, or any other charges applicable by law. The order also directed the dissolution of Transferor Companies without winding up and mandated the delivery of a certified copy of the order to the Registrar of Companies for registration within thirty days.

In conclusion, the Company Petition was allowed, and the Scheme of Amalgamation was approved and sanctioned, subject to compliance with legal requirements and regulations. The order emphasized the importance of adhering to all financial and legal obligations post-approval.