2022 (4) TMI 211 - Tri - Companies Law

Sanction of Scheme of Amalgamation - Section 230 read with Section 232 of the Companies Act, 2013 - HELD THAT - Upon perusing the records and documents in the instant proceedings and considering the submissions, it is concluded all necessary requirements have been complied with. The scheme of Amalgamation is sanctioned, subject to directions complied with. Application allowed.

Issues Involved:
1. Sanction of the Scheme of Amalgamation under Section 230 read with Section 232 of the Companies Act, 2013.
2. Compliance with statutory requirements and accounting standards.
3. Observations and conditions imposed by the Regional Director and the Official Liquidator.
4. Directions regarding the transfer of properties, liabilities, and employees.
5. Issuance and allotment of shares to shareholders of the Transferor Company.

Issue-Wise Detailed Analysis:

1. Sanction of the Scheme of Amalgamation:
The petition was filed for the sanction of the Scheme of Amalgamation of Swastika Marketing Private Limited (Transferor Company) with Clifton Business Private Limited (Transferee Company) from the Appointed Date, April 1, 2019. The Scheme was approved unanimously by the Board of Directors of both companies on September 2, 2019. The amalgamation aimed at consolidating business, optimizing synergies, efficient utilization of capital, better administrative control, cost efficiency, leveraging combined assets, and improved organizational capability.

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. Additionally, there were no pending proceedings 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 shares of the Petitioner Companies were not listed on any stock exchanges.

3. Observations and Conditions Imposed by the Regional Director and the Official Liquidator:
The Official Liquidator concluded that the affairs of the Transferor Company were not conducted prejudicially to the interest of its members or public interest. The Regional Director's observations included compliance with section 232(3)(i) of the Companies Act, 2013, payment of applicable stamp duty on the transfer of immovable properties, passing necessary accounting entries, approval by the requisite majority of members and creditors, ensuring no discrepancy in the Scheme, and serving notices to concerned authorities. The Petitioners provided appropriate affirmations and undertakings in response to these observations.

4. Directions Regarding the Transfer of Properties, Liabilities, and Employees:
The Tribunal ordered that all property, rights, and powers of the Transferor Company be transferred to the Transferee Company 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 Company were transferred to the Transferee Company. The employees of the Transferor Company were to be engaged by the Transferee Company. All pending proceedings by or against the Transferor Company were to continue by or against the Transferee Company.

5. Issuance and Allotment of Shares to Shareholders of the Transferor Company:
The Tribunal directed the Transferee Company to issue and allot shares to the shareholders of the Transferor Company as per the terms of the Scheme. The Petitioner(s) were granted leave to file the Schedule of Assets of the Transferor Company within three weeks. The Transferor Company and the Transferee Company were to deliver certified copies of the order to the Registrar of Companies within thirty days, leading to the dissolution of the Transferor Company without winding up.

Conclusion:
The Tribunal sanctioned the Scheme of Amalgamation, ensuring compliance with all statutory requirements and addressing the observations of the Regional Director and the Official Liquidator. The Scheme was deemed to be in the interest of all concerned, leading to the consolidation of business and improved operational efficiency. The petition was disposed of accordingly, with directions for the supply of certified copies of the order.

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