2022 (4) TMI 311 - Tri - Companies Law

Sanction of Scheme of Amalgamation - Sections 230 and 232 of the Companies Act, 2013 - HELD THAT - It is concluded that the objections/observations to the Scheme received from RD, RoC, OL, and IT have been adequately replied by the Petitioner Company and hence there is no impediment in approval of the Scheme. The Scheme in question as annexed at Annexure-A is approved and it is declared that the same is to be binding on all the shareholders and creditors of the Transferor as well as Transferee Company - the scheme is approved - application allowed.

Issues Involved:
1. Sanction of Scheme of Amalgamation.
2. Dispensation and convening of meetings for equity shareholders and creditors.
3. Compliance with statutory requirements and objections raised by authorities.
4. Payment of outstanding statutory dues.
5. Compliance with related party transactions and appointment of company secretary.
6. Filing of compounding application for non-compliance.
7. Withdrawal of previous scheme of amalgamation.

Detailed Analysis:

1. Sanction of Scheme of Amalgamation:
The joint second motion petition was filed by the Transferor Company and the Transferee Company under Sections 230 and 232 of the Companies Act, 2013, seeking the sanction of the Scheme of Amalgamation. The Tribunal approved the Scheme, declaring it binding on all shareholders and creditors of both companies. The order clarified that it should not be construed as an exemption from payment of any stamp duty, taxes, or other charges.

2. Dispensation and Convening of Meetings for Equity Shareholders and Creditors:
The Tribunal dispensed with the meetings of equity shareholders of both companies and directed the convening of meetings for secured and unsecured creditors. The Chairperson's report indicated that the meeting of secured creditors of the Transferor Company did not meet the quorum due to an invalid vote, but the secured creditor's loan was later paid off. The meetings of unsecured creditors of both companies passed with requisite majorities.

3. Compliance with Statutory Requirements and Objections Raised by Authorities:
Notices were issued to various statutory authorities, and no objections were received from any person or authority. The Regional Director (RD) and Registrar of Companies (RoC) raised several observations, including the need for No Objection Certificates (NOCs) from banks, compliance with related party transactions, and the appointment of a company secretary. The petitioner companies adequately addressed these observations in their reply affidavits.

4. Payment of Outstanding Statutory Dues:
The RD and RoC reports highlighted outstanding statutory dues of the Transferor and Transferee Companies. The petitioner companies undertook to discharge these dues as and when demanded by the respective authorities.

5. Compliance with Related Party Transactions and Appointment of Company Secretary:
The petitioner companies confirmed compliance with Section 188 of the Companies Act, 2013, regarding related party transactions. The Transferee Company undertook to file a compounding application under Section 441 of the Companies Act, 2013, for non-appointment of a qualified company secretary until 31 July 2019.

6. Filing of Compounding Application for Non-Compliance:
The Transferee Company was required to file a compounding application for the non-appointment of a company secretary as per Section 203 of the Companies Act, 2013, until 31 July 2019.

7. Withdrawal of Previous Scheme of Amalgamation:
The Transferee Company had filed a petition under Section 233 of the Companies Act, 2013, for Fast Track Merger approval, which was later withdrawn due to the impact of the COVID-19 pandemic on business operations.

Conclusion:
The Tribunal concluded that the objections and observations raised by the RD, RoC, OL, and IT had been adequately addressed by the petitioner companies. The Scheme of Amalgamation was approved, and the Transferor Company was ordered to be dissolved without undergoing the process of winding up. The Transferee Company was directed to deposit specified amounts with the Regional Director and the Prime Minister's National Relief Fund. The approval of the Scheme was not to be construed as an exemption from any provisions under the Income Tax Act, 1961, or the Companies Act, 2013. The petition was disposed of accordingly.

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