2022 (1) TMI 517 - Tri - Companies Law

Sanction of the Scheme of Amalgamation - Section 230(6) read with Section 232(3) of the Companies Act, 2013 - HELD THAT - Various directions with regard to holding, convening and dispensing with various meetings issued - directions with regards to issuance of various notices also issued. The scheme is approved - Application allowed.

Issues Involved:
1. Justification and benefits of the Scheme of Amalgamation.
2. Compliance with statutory requirements and accounting standards.
3. Observations and responses to the Regional Director's affidavit.
4. Approval and procedural formalities for the Scheme of Amalgamation.

Detailed Analysis:

1. Justification and Benefits of the Scheme of Amalgamation:
The Scheme of Amalgamation involves the amalgamation of Citizen Tracom Private Limited and Kalptaru Commodity Private Limited with Asish Finance Private Limited. The Board of Directors of the Petitioner Companies approved the Scheme on 18th September 2020. The amalgamation is justified and beneficial for several reasons, including:
- Combined and adjusted business operations with enhanced strength.
- Consolidation and re-organization of business activities and capital structure.
- Broadening business activities under one roof.
- Achieving economies of scale and reducing overhead expenses.
- Establishing a larger company with greater resources and capital base.
- Pooling resources for expanded activities and rationalizing management.
- Beneficial results for the companies, shareholders, employees, and all concerned.

2. Compliance with Statutory Requirements and Accounting Standards:
The statutory auditors confirmed that the accounting treatment in the Scheme conforms to the accounting standards prescribed under Section 133 of the Companies Act, 2013. No proceedings are pending against the Petitioners under Sections 210 to 227 of the Companies Act, 2013. The exchange ratio of shares was fixed on a fair and reasonable basis by a registered valuer. Meetings of equity shareholders were dispensed with as all shareholders consented to the Scheme. There were no secured or unsecured creditors, verified by auditors' certificates. Notices were duly served to regulatory authorities, and advertisements were published as required. All statutory formalities for obtaining sanction of the Scheme were duly complied with.

3. Observations and Responses to the Regional Director's Affidavit:
The Regional Director (RD) and Official Liquidator filed their representations. Key observations and responses include:
- No complaints or adverse comments were received against the proposed Scheme.
- The Transferee Company, being an NBFC, applied to RBI for a No Objection Certificate (NOC) and served notices to RBI.
- The promoters' stake increase post-merger was disclosed as required under Section 230(2) of the Companies Act, 2013.
- The Transferee Company undertook to comply with Section 232(3)(i) regarding adjustment of fees and to pay applicable stamp duty on the transfer of immovable properties.
- The Transferee Company committed to complying with Accounting Standard-14 or IND-AS 103 and other applicable standards.
- All shareholders provided affidavits of consent, and there were no secured or unsecured creditors.
- The Petitioners affirmed that the Scheme enclosed to the Company Application and Petition are identical.
- Notices were served to concerned authorities, and their decisions post-sanctioning would be binding on the Transferee Company.
- No observations were received from the Income Tax Department.

4. Approval and Procedural Formalities for the Scheme of Amalgamation:
The Tribunal, upon hearing submissions and perusing records, allowed the petition and sanctioned the Scheme with the appointed date as 1st April 2020. The order included:
- Transfer and vesting of properties, rights, and liabilities of the Transferor Companies to the Transferee Company.
- Continuation of pending proceedings by or against the Transferee Company.
- Issuance and allotment of shares by the Transferee Company as per the Scheme.
- Filing of the schedule of assets within 60 days.
- Dissolution of the Transferor Companies from the effective date.
- Delivery of certified copies of the order to the Registrar of Companies within 30 days.
- Provision for any person interested to apply for necessary directions.
- Supply of legible printouts of the Scheme and schedule of assets to the Registry.

The Company Petition C.P (CAA) No. 110/KB/2021 was disposed of accordingly, with an urgent certified copy of the order to be supplied upon compliance with requisite formalities.

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