2022 (2) TMI 21 - Tri - Companies Law

Sanction of Scheme of Amalgamation - Sections 230-232 of the Companies Act, 2013 - HELD THAT - After analyzing the Scheme in detail, this Tribunal is of the considered view that the scheme as contemplated amongst the Transferor and Transferee companies seems to be prima facie beneficial to the Companies and will not be in any way detrimental to the interest of the shareholders of the Companies. In view of the absence of any other objections having been placed on record before this Tribunal and since all the requisite statutory compliances having been fulfilled, this Tribunal sanctions the Scheme of Arrangement appended as Annexure 1 with the Company Petition as well as the prayer made therein. The Scheme stands approved, subject to the approval by the NCLT, Bangalore Bench in respect of the Transferor Company. Application allowed.

Issues Involved:
1. Jurisdiction and procedural compliance.
2. Rationale and benefits of the Scheme of Amalgamation.
3. Statutory authorities' response and observations.
4. Valuation report and accounting treatment.
5. Tribunal's observations and final order.

Detailed Analysis:

1. Jurisdiction and Procedural Compliance:
The Petition was conducted via video conferencing. The proposed Scheme of Amalgamation involves M/s. Mandala Wellness Private Limited (Transferor Company) and M/s. Phasorz Technologies Private Limited (Transferee Company). The registered office of the Transferor Company is in Bangalore, under the jurisdiction of NCLT Bangalore Bench, where a related petition is pending. The Transferee Company approved the Scheme in a Board meeting on 23rd December 2019. The First Motion Application (CA/343/CAA/2020) sought directions for meetings of shareholders and creditors, which were dispensed with by the Tribunal's order dated 04.02.2021.

2. Rationale and Benefits of the Scheme:
The Scheme aims to maximize shareholder value, improve financial positions, enhance organizational capabilities through pooling of human capital, and achieve efficient use of infrastructure and resources. It also seeks to pool technical, managerial, financial, and human resources for productive utilization and operational efficiency.

3. Statutory Authorities' Response and Observations:
- Regional Director (RD): The RD's report dated 12.11.2021 noted the protection of employees' interests and compliance with statutory returns up to 31.03.2020. The RD objected to the appointed date (01.09.2019) as it was ante-dated beyond a year, not in accordance with Sec. 232(6) of the Companies Act, 2013. The Tribunal, considering the MCA Circular dated 21 August 2019, accepted the appointed date.
- Income Tax Department: Despite notice, there was no representation from the Income Tax Department. The Tribunal presumed no objection under section 230(5) of the Companies Act, 2013. The Tribunal referenced NCLT New Delhi's precedent ensuring the right of the IT Department to recover tax dues.
- Other Statutory Authorities: No objections were raised by other statutory authorities, and the Tribunal presumed no objections to the Scheme.

4. Valuation Report and Accounting Treatment:
The Valuation Report by Kusumadevi R H, dated 23.12.2019, specified the share exchange ratio. The Statutory Auditor certified compliance with Section 230 (7)/Section 232 (3) and applicable Indian Accounting Standards.

5. Tribunal's Observations and Final Order:
The Tribunal found the Scheme beneficial and not detrimental to shareholders. With no further objections and statutory compliances fulfilled, the Tribunal sanctioned the Scheme, subject to NCLT Bangalore Bench's approval for the Transferor Company. The Tribunal clarified that the order does not exempt payment of stamp duty, taxes, or other charges due under the law.

Final Orders:
1. Transfer of properties, rights, and interests of the Transferor Company to the Transferee Company.
2. Transfer of liabilities, powers, engagements, obligations, and duties to the Transferee Company.
3. Appointed date for the Scheme is 1st September 2019.
4. Continuation of pending proceedings by or against the Transferee Company.
5. Transfer of employees to the Transferee Company without interruption.
6. Allotment of shares to members of the Transferor Company as per the Scheme.
7. Filing of revised Memorandum and Articles of Association and payment of differential fees by the Transferee Company.
8. Delivery of a certified copy of the order to the Registrar of Companies within thirty days, leading to the dissolution of the Transferor Company.
9. Liberty for interested persons to apply for necessary directions.

Conclusion:
The Company Petition stands allowed, with the Scheme of Amalgamation sanctioned as per the terms and conditions outlined.

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