2023 (2) TMI 381 - AT - Companies Law

Seeking sanction to the scheme of amalgamation of the Transferor Companies with the Appellant Company being the Transferee Company - HELD THAT - In the present case, it is categorically held that the scheme was approved by the Shareholders with appointed date as 01.04.2019 and hence the appointed date of the scheme fixed as 01.04.2019. Appeal allowed.

Summary

Issues:
1. Interpretation of the appointed date in a scheme of amalgamation.
2. Compliance with statutory provisions in sanctioning a scheme of amalgamation.

Analysis:
1. The appeal was filed under Section 421 of the Companies Act, 2013 against the NCLT's order rejecting the appellant's prayer regarding a scheme of amalgamation. The NCLAT considered the discrepancy between the appointed date and effective date in the scheme. The Board of Directors approved the scheme with an appointed date of 01.04.2019, but the NCLT erroneously considered the effective date as the appointed date. The Regional Director also confirmed the appointed date as 01.04.2019. The appellant sought clarification, emphasizing compliance with Circular No. F No. 7/12/2019-CL-I. Reference was made to the Accelyst Solutions case, emphasizing that the appointed date approved by shareholders must be upheld.

2. The NCLAT analyzed the definitions in the scheme, noting the specific mention of the appointed date as 01.04.2019. The tribunal held that the NCLT's error in fixing the appointed date as the effective date was contrary to shareholder approval and the Regional Director's observations. The appellant and transferor companies undertook to comply with regulatory requirements. Relying on precedent, the NCLAT modified the NCLT's order, setting the appointed date as 01.04.2019, in line with the scheme approved by shareholders. The appeal was allowed, and the NCLT's order was set aside, with no costs imposed.

In conclusion, the NCLAT rectified the NCLT's error in interpreting the appointed date in the scheme of amalgamation, emphasizing compliance with shareholder-approved provisions. The judgment underscores the significance of upholding the appointed date approved by shareholders and ensuring adherence to statutory requirements in sanctioning schemes of amalgamation.