2022 (5) TMI 1168 - Tri - Companies Law

Sanction of scheme of amalgamation - Sections 230-232 of the Companies Act, 2013 - HELD THAT - On perusal of the Scheme and the proceedings, it appears that the requirements of the provisions of section 230 and 232 are satisfied by the petitioner company. The proposed Scheme of Amalgamation is bona fide and in the interest of the shareholders and creditors. The scheme is sanctioned - application allowed.

Issues Involved:
1. Jurisdiction and applicability of Sections 230-232 of the Companies Act, 2013.
2. Business operations and financial details of the petitioner and transferor companies.
3. Rationale and benefits of the proposed scheme of amalgamation.
4. Compliance with statutory requirements and regulatory observations.
5. Approval process and stakeholder meetings.
6. Final sanction and binding effect of the scheme.

Detailed Analysis:

1. Jurisdiction and Applicability of Sections 230-232 of the Companies Act, 2013:
The petition was filed under Sections 230-232 of the Companies Act, 2013, seeking sanction for a scheme of amalgamation between the petitioner company (Transferee) and the Transferor Company. The Transferee Company is under the jurisdiction of the NCLT, Indore Bench, while the Transferor Company falls under the NCLT, Kolkata Bench.

2. Business Operations and Financial Details:
The petitioner company is engaged in metal fabrication, manufacturing, maintenance, and repair of commercial vehicles and railway wagons. The authorized share capital of the petitioner company is Rs. 470,05,00,000/-. The Transferor Company is involved in manufacturing, casting, forging, and maintenance of railway wagons and other related products. Its authorized share capital is Rs. 68,00,000/-.

3. Rationale and Benefits of the Proposed Scheme of Amalgamation:
The proposed amalgamation aims to create greater synergies between the companies, enhance net worth, and achieve cost savings through operational efficiencies. It is expected to improve competitive strength, productivity, and financial stability, benefiting stakeholders and shareholders. The amalgamation will also streamline operations and stabilize cash flow issues.

4. Compliance with Statutory Requirements and Regulatory Observations:
The petitioner company confirmed compliance with accounting standards and stated no pending proceedings or investigations under relevant sections of the Companies Act, 2013 and 1956. The Regional Director's report highlighted issues such as fees on enhanced authorized capital, SEBI circular compliance, foreign shareholding compliance with FEMA and RBI guidelines, and discrepancies in the number of secured creditors. The petitioner company responded to these observations, affirming compliance with statutory requirements and regulatory guidelines.

5. Approval Process and Stakeholder Meetings:
The Tribunal directed the convening of meetings for equity shareholders, secured creditors, and unsecured creditors, all of whom approved the scheme with significant majorities. Notices were issued to statutory authorities and published in newspapers, inviting objections. The Regional Director and ROC had no adverse observations, and the Income Tax Department confirmed no pending demands.

6. Final Sanction and Binding Effect of the Scheme:
The Tribunal found the scheme bona fide and in the interest of shareholders and creditors. The scheme was sanctioned, declaring it binding on the petitioner company, its shareholders, creditors, and all concerned. The Tribunal ordered the transfer of all properties, rights, liabilities, and duties of the Transferor Company to the Transferee Company. The order also directed the filing of the scheme with the Registrar of Companies and compliance with stamp duty adjudication.

Conclusion:
The Tribunal allowed the petition, sanctioning the scheme of amalgamation between the petitioner Transferee Company and the Transferor Company, making it binding on all stakeholders involved. The legal fees and expenses were quantified, and the petition was disposed of with no order as to costs.

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