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2017 (8) TMI 1739 - Tri - Companies LawSanction of scheme of amalgamation - section 230-232 of Companies Act, 2013 - HELD THAT - It was observed in that case that upon amalgamation of the Petitioner Subsidiary Company, with the Holding Transferee Company, no reorganization of the share capital of the Transferee Company is involved. The Scheme if sanctioned, would not be detrimental to the interests of the members or creditors of the Transferee Company or to the public interest at large. Further, the Regional Director has not made any observations in his affidavit to this effect. In these circumstances it was observed that there is no requirement for the Transferee Company to initiate separate proceedings. In the instant case also net worth of the Petitioner Subsidiary Company is positive and it has excess of assets over the liabilities. The 'Scheme' of amalgamation of Petitioner Company with 'Transferee-Company' is sanctioned - Application allowed.
Issues Involved:
1. Jurisdiction and applicability of rules for the amalgamation petition. 2. Approval and compliance with the proposed Scheme of amalgamation. 3. Financial standing and share capital details of the involved companies. 4. Compliance with statutory requirements and regulatory bodies. 5. Exemption request for the Transferee-Company from filing a separate petition. 6. Sanctioning of the Scheme and its implementation. Detailed Analysis: 1. Jurisdiction and Applicability of Rules: The petition for sanction of the Scheme of amalgamation was transferred from the Punjab and Haryana High Court to the National Company Law Tribunal (NCLT) Chandigarh in accordance with Rule 3 of the Companies (Transfer of Pending Proceedings) Rules, 2016. The Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, are applicable. The registered office of the Petitioner Company is in Haryana, placing the matter within the jurisdiction of this Tribunal. 2. Approval and Compliance with the Proposed Scheme: The Board of Directors of both the Petitioner and Transferee Companies approved the Scheme on 09.09.2016. The Scheme outlines that all employees of the Petitioner Company will become permanent employees of the Transferee-Company under unchanged terms. The Scheme aims to merge the entire business of the Petitioner Company with the Transferee-Company, enhancing product portfolios and operational efficiencies, and reducing overheads. 3. Financial Standing and Share Capital Details: The share capital details as of 12.09.2016 were presented for both companies. The Petitioner Company had an authorized share capital of Rs. 5,00,000, while the Transferee-Company's authorized share capital was Rs. 10,00,00,000. There were no material changes in the share capital of either company post-26.08.2016. The financial statements indicated that the current assets of both companies exceeded their current liabilities, with a combined excess of assets over liabilities amounting to Rs. 3,654,368,142. 4. Compliance with Statutory Requirements and Regulatory Bodies: The Scheme was advertised, and no objections were received. The Reserve Bank of India (RBI) regulations concerning External Commercial Borrowings were addressed, with the Authorized Dealer Bank handling the borrower name change post-merger. The petitioner-company confirmed compliance with accounting standards and statutory dues, with no pending investigations or petitions under Sections 397/398 of the Companies Act, 1956, or any other provision of the Companies Act, 2013. 5. Exemption Request for the Transferee-Company: The Tribunal considered the exemption request for the Transferee-Company from filing a separate petition in Maharashtra. The Transferor-Company is a wholly-owned subsidiary of the Transferee-Company, and the Scheme does not alter the capital structure of the Transferee-Company. The Tribunal allowed the exemption, noting that the Scheme would not adversely affect the members or creditors of the Transferee-Company. 6. Sanctioning of the Scheme and Its Implementation: The Tribunal sanctioned the Scheme of amalgamation, directing compliance with RBI/FEMA guidelines. All properties, rights, liabilities, and employees of the Transferor-Company are to be transferred to the Transferee-Company. The Transferor Company will be dissolved without winding up upon registration of the order. The Petitioner Company is required to deposit Rs. 1,00,000 with the Official Liquidator and ensure compliance with stamp duty, taxes, and other legal requirements. The formal order will be issued upon filing the Schedule of Property, and any interested person may apply to the Tribunal for necessary directions.
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