2022 (1) TMI 1075 - Tri - Companies Law

Sanction of the Scheme of Arrangement - Section 230(6) read with 232(3) of the Companies Act, 2013 - HELD THAT - It is ordered that in case of any default including any Provisions of Income Tax Act in this respect of the Transferor Companies the Income Tax department, the ROC, West Bengal and all other Statutory Department shall be at liberty to initiate appropriate proceedings against the Transferee Company, which after the sanction of the scheme by this Tribunal is in any case responsible for the liabilities/non-compliance of the Transferor Companies also. Various directions regarding holding, convening and dispensing with various meetings issued - directions with regard to issuance of various notices also issued. The scheme is approved - application allowed.

Issues Involved:
1. Approval and Sanction of the Scheme of Arrangement
2. Compliance with Statutory Requirements
3. Observations and Objections from the Regional Director and Official Liquidator
4. Non-Disclosure and Financial Reporting Issues
5. Transfer and Vesting of Assets, Liabilities, and Employees

Detailed Analysis:

1. Approval and Sanction of the Scheme of Arrangement:
The petition was filed under Section 230(6) read with 232(3) of the Companies Act, 2013, seeking sanction for the Scheme of Arrangement involving the amalgamation of Anticlock Vyapaar Private Limited and Mansa Dealer Private Limited with Wardhaman Trade & Commerce Private Limited, followed by the de-merger of the Investment Businesses of Wardhaman Trade & Commerce Private Limited into Namkit Coatex Private Limited. The Scheme was unanimously approved by the respective Board of Directors on 01.11.2019. The Tribunal sanctioned the Scheme to be binding with effect from 01.04.2019 on all concerned parties.

2. Compliance with Statutory Requirements:
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 were pending under Sections 210 to 227 of the Companies Act, 2013, against the Petitioners. The exchange ratio of shares was fixed on a fair and reasonable basis by a registered valuer. The Tribunal directed the Petitioner Companies to comply with the provisions of section 232(3)(i) and other applicable accounting standards. The Petitioners undertook to pay applicable stamp duty on the transfer of immovable properties after the Scheme's sanction.

3. Observations and Objections from the Regional Director and Official Liquidator:
The Official Liquidator concluded that the affairs of the Transferor Companies did not appear to have been conducted prejudicially to the interest of members or the public. The Regional Director's affidavit raised several observations, including the need for a 'No Objection' from the Reserve Bank of India, compliance with section 232(3)(i), payment of applicable stamp duty, and compliance with applicable accounting standards. The Petitioners provided undertakings to address these observations and confirmed that the Scheme enclosed to the Company Application and Company Petition were identical.

4. Non-Disclosure and Financial Reporting Issues:
The Regional Director noted non-disclosures in the financial statements of Anticlock Vyapaar Private Limited and Mansa Dealer Private Limited, particularly concerning short-term loans and advances. The Petitioners responded that material facts were disclosed in the "Notes to Account" and that the companies were financially sound. The Regional Director also highlighted the failure of Mansa Dealer Private Limited to file consolidated financial statements, which was subsequently rectified by the filing of the necessary documents.

5. Transfer and Vesting of Assets, Liabilities, and Employees:
The Tribunal ordered the transfer and vesting of all assets, properties, rights, liabilities, and duties of the Transferor Companies and the Demerged Undertaking of the Demerged Company to the Transferee Company and the Resulting Company, respectively, without any further act or deed, pursuant to Section 232(4) of the Companies Act, 2013. The employees of the Transferor Companies and the Demerged Undertaking would be engaged by the Transferee Company and the Resulting Company as per the Scheme. All pending proceedings, suits, and appeals would continue by or against the Transferee Company and the Resulting Company.

Conclusion:
The Tribunal allowed the petition and sanctioned the Scheme of Amalgamation and Arrangement, with specific directions for compliance with statutory requirements, addressing the observations of the Regional Director and Official Liquidator, and ensuring the proper transfer and vesting of assets, liabilities, and employees. The Transferor Companies would be dissolved without winding up upon filing certified copies of the order with the Registrar of Companies.

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