2016 (3) TMI 654 - HC - Companies Law

Sanction of the scheme of amalgamation - Held that - In view of the approval accorded to the scheme by the shareholders and creditors of the petitioners and, given the fact, that the concerns of the RD and the OL, as indicated above, have been duly taken care of, in my opinion, there appears to be no impediment in the grant of sanction to the scheme. Consequently, sanction is granted to the scheme in terms of Section 391 and 394 of the 1956 Act. The petitioners will, however, comply with all statutory requirements, as mandated in law. A certified copy of the order, sanctioning the scheme, will be filed with the ROC, within thirty (30) days of its receipt. In terms of the provisions of Section 391 and 394 of the 1956 Act, and in terms of the scheme, the entire undertaking, properties, rights and powers of the transferor company will stand transferred to and / or vest in the transferee company without any further act or deed. Similarly, in terms of the scheme, all liabilities and duties of the transferor company shall stand transferred to the transferee company without any further act or deed. Upon the scheme coming into effect, the transferor company shall stand dissolved without having to follow the process of winding up. It is made clear, that this order will not be construed as an order granting exemption from payment of stamp duty or, taxes or, other penalties/ charges, if any, payable, as per the relevant provisions of law or, from any applicable permissions that may have to be obtained or, even compliances that may have to be made, as per the mandate of law.

Issues Involved:
1. Jurisdiction and incorporation details of the companies.
2. Approval and consent for the scheme of amalgamation.
3. Compliance with statutory requirements and objections raised by the Regional Director (RD) and Official Liquidator (OL).
4. Extension of the scheme beyond the specified date.
5. Registration of charge under Section 77 of the Companies Act, 2013.
6. Consistency in the share exchange ratio.
7. Transfer of liabilities and compliance with statutory requirements post-sanction.

Detailed Analysis:

1. Jurisdiction and Incorporation Details of the Companies:
The petitioners, Beumer Technology India Private Limited (transferor) and Enexco Teknologies India Ltd. (transferee), filed a second motion petition under Sections 391 and 394 of the Companies Act, 1956. The registered offices of both companies are within the jurisdiction of the Delhi High Court, thus granting it the authority to adjudicate the petition.

2. Approval and Consent for the Scheme of Amalgamation:
The transferor company was incorporated in Maharashtra and later moved to Delhi, while the transferee company has undergone name changes and relocations within Delhi. The scheme of amalgamation was approved by the Board of Directors of both companies on 08.11.2012. The first motion petition (CA(M) No.96/2014) sought to dispense with the requirement of convening meetings of shareholders and creditors, which was granted by the court on 08.09.2014, noting that all shareholders and secured creditors had given their consent.

3. Compliance with Statutory Requirements and Objections Raised by RD and OL:
The RD filed an affidavit under Section 394A of the Act, raising concerns based on a circular and communication with the Income Tax Department, which did not respond. The RD highlighted the need for clarity on the extension of the scheme date beyond 01.04.2013, compliance with FEMA regulations, and the registration of charges under Section 77 of the Companies Act, 2013. The OL pointed out inconsistencies in the share exchange ratio between the petition and the scheme.

4. Extension of the Scheme Beyond the Specified Date:
The RD noted that the scheme would become null and void if not effective by 01.04.2013 unless extended by the BODs. The petitioners confirmed that a BOD resolution dated 18.09.2014 extended the scheme to 01.04.2017 or as per court orders.

5. Registration of Charge Under Section 77 of the Companies Act, 2013:
The RD raised a concern about a secured creditor and the non-filing of form CHG-1. The petitioners clarified that the working capital facilities were based on a guarantee dated 24.01.2013, and Section 77, effective from 01.04.2014, did not apply as no charge was created. This position was corroborated by the RD in a subsequent affidavit.

6. Consistency in the Share Exchange Ratio:
The OL highlighted contradictions in the share exchange ratio mentioned in the petition and the scheme. The petitioners acknowledged an inadvertent error in clause 10.1.1 of the scheme and confirmed the correct ratio as 9 fully paid shares of the transferee company for every 1 share of the transferor company, supported by the valuation report.

7. Transfer of Liabilities and Compliance with Statutory Requirements Post-Sanction:
The scheme provides for the transfer of all properties, rights, and liabilities of the transferor company to the transferee company without further acts or deeds. The transferee company will also assume all liabilities, and the transferor company will be dissolved without winding up. The court emphasized that the order does not exempt the companies from stamp duty, taxes, or other legal compliances.

Conclusion:
The court found that all concerns and objections raised by the RD and OL were addressed. The scheme was sanctioned under Sections 391 and 394 of the Companies Act, 1956, with the petitioners required to comply with all statutory requirements. A certified copy of the order must be filed with the ROC within 30 days. The petition was allowed and disposed of accordingly.

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