2022 (4) TMI 140 - Tri - Companies Law

Sanction of the Scheme of Amalgamation - Section 230-232 read with Section 66 and other applicable provisions of the Companies Act, 2013 - HELD THAT - Upon perusing the records and documents in the instant proceedings and considering the submissions, it is concluded that requirements have been duly complied with. The scheme is sanctioned - application allowed.

Issues Involved:
1. Approval and Sanction of the Scheme of Amalgamation.
2. Compliance with statutory requirements and accounting standards.
3. Payment of applicable fees and stamp duty.
4. Validity of shareholding by "Vaishnavi & Co."
5. Transfer of properties, rights, liabilities, and obligations.
6. Continuation of legal proceedings.
7. Employment of Transferor Company's employees by Transferee Company.
8. Issuance of shares by the Transferee Company to the shareholders of the Transferor Company.
9. Filing and registration of the Order with the Registrar of Companies.

Detailed Analysis:

1. Approval and Sanction of the Scheme of Amalgamation:
The petition was filed under Sections 230-232 read with Section 66 of the Companies Act, 2013, for the sanction of the Scheme of Amalgamation between the Transferor Company and the Transferee Company. The Scheme was unanimously approved by the respective Board of Directors on January 4, 2021. The Tribunal sanctioned the Scheme, making it binding on both companies, their shareholders, and creditors from the Appointed Date, April 1, 2020.

2. Compliance with Statutory Requirements and Accounting Standards:
The Statutory Auditor confirmed that the accounting treatment in the Scheme conforms to the Accounting Standards prescribed under Section 133 of the Companies Act, 2013. The Transferee Company undertook to comply with Accounting Standard-14 and other applicable standards. Notices were duly served to statutory authorities, and all statutory formalities were complied with.

3. Payment of Applicable Fees and Stamp Duty:
The Regional Director (RD) raised concerns about the adjustment of fees upon clubbing of Authorized Share Capital and the payment of applicable stamp duty. The Petitioners clarified that the Authorized Share Capital of the Transferor Company would be added to that of the Transferee Company without additional fees, in compliance with Section 232(3)(i). They also confirmed that there were no immovable properties in the Transferor Company as of March 31, 2020, hence no stamp duty was applicable.

4. Validity of Shareholding by "Vaishnavi & Co.":
The RD questioned the competency of "Vaishnavi & Co." to hold shares. The Petitioners explained that under Section 2(55) of the Companies Act, 2013, and definitions from the Income Tax Act, 1961, and the General Clauses Act, 1897, "Vaishnavi & Co." as an Association of Persons (AOP) is competent to hold shares and be a registered member of a company.

5. Transfer of Properties, Rights, Liabilities, and Obligations:
From the Appointed Date, all properties, rights, powers, debts, liabilities, duties, and obligations of the Transferor Company were transferred to the Transferee Company without further act or deed, pursuant to Section 232(4) of the Companies Act, 2013.

6. Continuation of Legal Proceedings:
All pending legal proceedings by or against the Transferor Company were to be continued by or against the Transferee Company as provided in the Scheme.

7. Employment of Transferor Company's Employees by Transferee Company:
The Scheme provided that the employees of the Transferor Company would be engaged by the Transferee Company.

8. Issuance of Shares by the Transferee Company to the Shareholders of the Transferor Company:
The Transferee Company was directed to issue and allot shares to the shareholders of the Transferor Company in terms of the Scheme without further application.

9. Filing and Registration of the Order with the Registrar of Companies:
The Petitioners were granted leave to file the Schedule of Assets of the Transferor Company within three weeks. Certified copies of the Order were to be delivered to the Registrar of Companies within 30 days, leading to the dissolution of the Transferor Company upon registration.

The Tribunal disposed of the Company Petition accordingly, with provisions for urgent certified copies of the Order to be supplied upon compliance with requisite formalities.

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