2022 (1) TMI 69 - Tri - Companies Law

Sanction of the Scheme of Amalgamation - Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 and in terms of Rule 15 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT - The Scheme (Annexure 1) is approved and it is declared that the same to be binding on all the shareholders, and creditors of the Petitioner Company and on all concerned. While approving the Scheme, it is clarified that this order should not be construed as an order in any way granting exemption from payment of any stamp duty, taxes, or any other charges, if any, and payment in accordance with law or in respect of any permission/compliance with any other requirement which may be specifically required under any law. Application allowed.

Issues Involved:
1. Jurisdiction of the Tribunal
2. Compliance with procedural requirements for meetings and notices
3. Objections and representations from statutory authorities
4. Compliance with FEMA and RBI guidelines
5. Approval of the Scheme of Amalgamation
6. Transfer and vesting of assets and liabilities
7. Continuation of legal proceedings
8. Status of employees post-amalgamation
9. Issuance of shares and consideration for amalgamation
10. Tax implications and entitlements
11. Dissolution of the Transferor Company without winding-up
12. Filing and registration requirements post-approval
13. Payment of fees to the Central Government and Prime Minister's National Relief Fund

Detailed Analysis:

1. Jurisdiction of the Tribunal:
The Tribunal noted that the registered office of the Transferor Company is in Maharashtra, falling under the jurisdiction of NCLT Mumbai, while the Transferee Company falls under the jurisdiction of the NCLT Jaipur Bench.

2. Compliance with Procedural Requirements for Meetings and Notices:
The Petitioner Company complied with directions to convene meetings of equity shareholders via e-voting and to dispense with meetings of secured creditors based on consent affidavits. Notices were served to relevant authorities and advertised in specified newspapers, ensuring compliance with procedural requirements.

3. Objections and Representations from Statutory Authorities:
The Regional Director filed a report with observations, including the need for compliance with FEMA and RBI guidelines due to foreign shareholding. The Petitioner Company confirmed compliance with FEMA and RBI guidelines and received no objections from the Income Tax Department and SEBI.

4. Compliance with FEMA and RBI Guidelines:
The Petitioner Company affirmed adherence to Section 47 of FEMA, 1999, and relevant RBI regulations, stating that notices were issued to RBI with no objections received.

5. Approval of the Scheme of Amalgamation:
The Tribunal, considering the approval from members and creditors and the absence of objections from statutory authorities, sanctioned the Scheme of Amalgamation. The Petitioner Company must comply with statutory requirements as highlighted by the Regional Director.

6. Transfer and Vesting of Assets and Liabilities:
The Tribunal ordered that all assets, rights, titles, and interests of the Transferor Company transfer to the Transferee Company without further acts. Similarly, all debts, liabilities, and obligations transfer to the Transferee Company.

7. Continuation of Legal Proceedings:
All ongoing legal proceedings involving the Transferor Company will continue under the Transferee Company.

8. Status of Employees Post-Amalgamation:
Employees of the Transferor Company will become employees of the Transferee Company on the same terms and conditions, with no interruption in service.

9. Issuance of Shares and Consideration for Amalgamation:
As the Transferor Company is wholly owned by the Transferee Company, no new shares will be issued, and all existing shares of the Transferor Company held by the Transferee Company will be canceled.

10. Tax Implications and Entitlements:
All taxes, duties, and entitlements of the Transferor Company will be treated as those of the Transferee Company post-amalgamation.

11. Dissolution of the Transferor Company Without Winding-Up:
Upon the Scheme's effectiveness, the Transferor Company will be dissolved without winding-up, and its Board will be dissolved without further acts.

12. Filing and Registration Requirements Post-Approval:
The Petitioner Company must deliver a certified copy of the Tribunal's order to the Registrars of Companies in Maharashtra and Rajasthan within 30 days. The Scheme becomes effective upon filing, and the Registrars will consolidate the files of both companies.

13. Payment of Fees to the Central Government and Prime Minister's National Relief Fund:
The Transferee Company is directed to deposit ?25,000 to the Prime Minister's National Relief Fund and ?30,000 to the Ministry of Corporate Affairs within four weeks of receiving the certified order copy.

Conclusion:
The Tribunal approved the Scheme of Amalgamation, ensuring compliance with legal and procedural requirements, and provided detailed directions for the transfer of assets, liabilities, and continuation of legal proceedings. The Transferor Company will be dissolved without winding-up, and the Transferee Company will comply with statutory obligations and payment directives.

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