2022 (2) TMI 20 - 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 regard to issuance of notices also issued. The scheme is approved - application allowed.

Issues Involved:
1. Approval and necessity of the Scheme of Amalgamation.
2. Compliance with statutory requirements and accounting standards.
3. Observations and objections from statutory authorities.
4. Transfer and vesting of property, rights, and liabilities.
5. Continuation of legal proceedings.
6. Issuance and allotment of shares.
7. Filing and registration requirements post-amalgamation.

Issue-wise Detailed Analysis:

1. Approval and Necessity of the Scheme of Amalgamation:
The Scheme of Amalgamation was unanimously approved by the respective Board of Directors of the Petitioner Companies on 4th March 2021. The necessity for the Scheme was justified on the grounds of reducing managerial overlaps, overheads, administrative and managerial expenditures, enhancing efficiency, optimal utilization of resources, reducing legal and regulatory compliances, and creating enhanced value for stakeholders. Additionally, the companies are under the same management group, having common shareholders and directors, which further necessitated the merger into a single entity.

2. Compliance with Statutory Requirements and Accounting Standards:
The Statutory Auditors confirmed that the accounting treatment in the Scheme is in conformity with the accounting standards prescribed under Section 133 of the Companies Act, 2013. The exchange ratio of shares was fixed on a fair and reasonable basis by a registered valuer. The shares of the Petitioner Companies are not listed on any Stock Exchange(s). The Tribunal dispensed with the meetings of Equity Shareholders and Unsecured Creditors of the Applicant Companies as per Section 230(1) read with Section 232(1) of the Act. Notices were duly served, and advertisements were published in compliance with the Tribunal's order.

3. Observations and Objections from Statutory Authorities:
The Regional Director (RD) and Official Liquidator filed their representations. The Official Liquidator concluded that the affairs of the Transferor Companies were not conducted in a manner prejudicial to the interest of its members or public interest. The RD's affidavit and the Petitioners' joint affidavit addressed several points, including compliance with Section 232(3)(i) of the Act, payment of applicable stamp duty, adherence to Accounting Standards, approval by requisite majority, and confirmation that the Scheme in the application and petition are identical. The Petitioners affirmed compliance with all statutory requirements and acknowledged that approval of the Scheme by the Tribunal would not deter authorities from addressing any issues arising post-amalgamation.

4. Transfer and Vesting of Property, Rights, and Liabilities:
The Tribunal ordered that all property, rights, and powers of the Transferor Companies be transferred to the Transferee Company from the Appointed Date (1st April 2020) without further act or deed, pursuant to Section 232(4) of the Companies Act, 2013. Similarly, all debts, liabilities, duties, and obligations of the Transferor Companies were transferred to the Transferee Company.

5. Continuation of Legal Proceedings:
All proceedings, suits, and appeals pending by or against the Transferor Companies were ordered to be continued by or against the Transferee Company as provided in the Scheme.

6. Issuance and Allotment of Shares:
The Tribunal directed the Transferee Company to issue and allot shares to the shareholders of the Transferor Companies as per the terms of the Scheme.

7. Filing and Registration Requirements Post-Amalgamation:
The Tribunal granted leave to the Petitioners to file the Schedule of Assets of the Transferor Companies within 60 days. The Transferor Companies and the Transferee Company were directed to deliver a certified copy of the order to the Registrar of Companies within thirty days. Upon delivery, the Transferor Companies would stand dissolved without winding up, and the Registrar would consolidate the files accordingly.

Conclusion:
The Tribunal sanctioned the Scheme of Amalgamation with effect from 1st April 2020, binding on all concerned parties. The Petitioners were directed to comply with post-amalgamation filing and registration requirements. The petition was disposed of accordingly, and urgent certified copies of the order were allowed to be supplied upon compliance with requisite formalities.

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