2022 (2) TMI 467 - Tri - Companies Law

Sanction of Scheme of Amalgamation - Sections 230-232 of the Companies Act, 2013 in terms of Rule 16 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT - The Scheme contemplated between the petitioner companies, appears to be prima facie in compliance with all the requirements stipulated under the relevant Sections of Companies Act, 2013. In the absence of any objections and since all the requisite statutory compliance have been fulfilled, this Tribunal sanctions the Scheme of Amalgamation appended as Annexure-19 with the company petition. Notwithstanding the submission that no investigation is pending against the petitioner companies, if there is any deficiency found or, violation committed qua any enactment, statutory rule or regulation, the sanction granted by this Tribunal will not come in the way of action being taken, albeit, in accordance with law, against the concerned persons, directors and officials of the petitioners - 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 stamp duty, taxes or any other charges, if any, payment is due or required in accordance with law or in respect to any permission/compliance with any other requirement which may be specifically required under any law. The Petitioner Companies shall to file the Schedule of Assets of the Transferor Companies in the form as prescribed in the Schedule of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 within three weeks from the date of receiving a copy of this order - Petition disposed off.

Issues Involved:
1. Sanction of the Scheme of Amalgamation under Sections 230-232 of the Companies Act, 2013.
2. Dispensation of meetings of equity shareholders, secured creditors, and unsecured creditors.
3. Compliance with statutory directions and notifications.
4. Observations and objections from statutory authorities.
5. Treatment of carry forward and set off of accumulated loss and unabsorbed depreciation.
6. Protection of employees' interests.
7. Continuation of pending proceedings.
8. Increase in authorized share capital.
9. Allotment of shares to the existing members of the Transferor Companies.
10. Payment of fees and compliance with statutory conditions.
11. Dissolution of Transferor Companies without winding up.

Detailed Analysis:

1. Sanction of the Scheme of Amalgamation:
The Tribunal sanctioned the Scheme of Amalgamation between the Petitioner Companies under Sections 230-232 of the Companies Act, 2013, as all statutory compliances were met, and no objections were raised. The Scheme was appended as Annexure-19 with the company petition.

2. Dispensation of Meetings:
The First Motion Application sought directions to dispense with the meetings of equity shareholders, secured creditors, and unsecured creditors, which was granted based on the written consent/affidavits submitted by these stakeholders.

3. Compliance with Statutory Directions and Notifications:
The Petitioner Companies complied with the directions issued by the Tribunal on 12.07.2019, including making newspaper publications and serving notices to relevant statutory authorities. Compliance affidavits and original newspaper copies were submitted as evidence.

4. Observations and Objections from Statutory Authorities:
- Registrar of Companies (RoC)/Regional Director (RD): The RoC and RD reports indicated no adverse observations. Clause 12 of the Scheme protected employees' interests, and Clause 8.4 ensured shareholders of Transferor Companies would receive equity shares of the Transferee Company.
- Official Liquidator: The report stated no pending litigation, no amounts due to the Investor Education and Protection Fund, no deposits accepted under Sections 73-76, and no pending investigations.
- Income Tax Department: Raised concerns about the carry forward of losses and unabsorbed depreciation, especially regarding compliance with Section 72A of the Income Tax Act, 1961. The Tribunal ordered that such carry forward and set off would only be allowed upon fulfilling statutory conditions.

5. Treatment of Carry Forward and Set Off of Accumulated Loss and Unabsorbed Depreciation:
The Tribunal noted that the Scheme did not specifically address the treatment of carry forward losses and unabsorbed depreciation. It was ordered that these would be allowed only upon fulfilling the statutory conditions of Section 72A of the Income Tax Act, 1961.

6. Protection of Employees' Interests:
Clause 12 of the Scheme protected the interests of the employees of the Transferor Companies, ensuring their transfer to the Transferee Company.

7. Continuation of Pending Proceedings:
Any pending proceedings by or against the Transferor Companies would continue against the Transferee Company.

8. Increase in Authorized Share Capital:
The authorized share capital of the Transferee Company would increase by vesting the authorized share capital of the Transferor Companies without further act or deed.

9. Allotment of Shares to Existing Members:
The Transferee Company would allot shares to the existing members of the Transferor Companies as per the Scheme.

10. Payment of Fees and Compliance with Statutory Conditions:
The fee paid by the Transferor Companies on their authorized capital would be set off against any fees payable by the Transferee Company. The Transferee Company was required to file revised memorandum and articles of association and make requisite payments for the enhancement of authorized capital.

11. Dissolution of Transferor Companies Without Winding Up:
Upon delivery of a certified copy of the order to the Registrar of Companies, the Transferor Companies would be dissolved without undergoing the process of winding up. The Registrar would consolidate the files relating to the Transferor and Transferee Companies.

Additional Orders:
- The Transferee Company was ordered to deposit ?1,00,000 in favor of "The Company Law Tribunal Bar Association" within four weeks.
- The Petitioner Companies were required to file the Schedule of Assets of the Transferor Companies within three weeks.
- All concerned regulatory authorities were directed to act on a copy of the order annexed with the Scheme.

Conclusion:
The Company Petition CP (CAA) No. 16/Chd/Hry/2019 was disposed of with the Tribunal sanctioning the Scheme of Amalgamation and issuing detailed orders to ensure compliance with statutory requirements and protection of stakeholders' interests.

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