2020 (9) TMI 711 - Tri - Companies Law

Approval of the Scheme of Amalgamation - Sections 230 to 232 of the Companies Act, 2013 r/w the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT - The Transferor Company Number 4 is carrying on the business of leasing, finance, hire purchase and to finance, lease operation of all kinds of purchasing, selling, hiring or letting on hire all kinds of plant and machinery, equipment, computers, motor cars, trucks, motor lorries and to assist in financing of all and every kind of their purchase of deferred payment or similar transactions and to subsidies finance of assist in subsidizing or financing the sale and maintenance of such goods - The Transferee Company's main object is to lease and hire-purchase and general finance company and to acquire and to provide on lease or to provide on hire purchase basis all types of house hold appliances industrial and office plant, equipment, machinery, vehicles, buildings and real estate required for manufacturing, processing, transportation and trading business, to finance industrial enterprises and to promote companies engaged in industrial and trading business by way of Finance. The Board of Directors of the Transferor Company have approved the present Scheme vide its Resolution dated 1st March 2018. The other necessary requirements have also been fulfilled as per the Order dated 07.01.2020 passed by this Bench in CA (CAA) - 180(ND)/2018. Taking into consideration the above facts, the Company Petitions are allowed and the Scheme of Amalgamation annexed with the Petitions is hereby Sanctioned. The Scheme approved shall be binding on the Shareholders, Creditors and employees of the Companies involved in this Scheme. The Appointed date of the Scheme is 01.04.2019.

Summary

Issues:
Approval of Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013.

Detailed Analysis:

1. Scheme of Amalgamation: The petition filed sought approval for the Scheme of Amalgamation involving multiple companies. The Scheme aimed at merging four Transferor Companies into one Transferee Company as going concerns, outlining the specifics of the amalgamation process.

2. Company Details: Detailed information about each Transferor Company and the Transferee Company was provided, including their incorporation dates, business activities, registered offices, and Corporate Identification Numbers (CINs).

3. Approval Process: The Board of Directors of the Transferor Company had approved the Scheme, meeting the necessary requirements as per the Companies Act. The Resolution date and other compliance details were mentioned to demonstrate the due diligence followed in the approval process.

4. Reports and Objections: Reports from the Regional Director (RD) and the Official Liquidator (OL) were submitted, indicating compliance with statutory requirements and the absence of objections against the proposed Scheme. The objection raised by the Income Tax Department was addressed in the Scheme.

5. Accounting Standards: The Scheme specified the accounting method to be followed by the Transferee Company, aligning with Accounting Standard 14 for the pooling of interests, as confirmed by a Chartered Accountant's certificate.

6. Rationale for Amalgamation: The Scheme provided a rationale for the proposed amalgamation, emphasizing benefits such as efficient management, uniform corporate policy, cost reduction, and overall business growth and development.

7. Compliance and Fairness: The Scheme was deemed fair, reasonable, and in compliance with Sections 230 to 232 of the Companies Act, 2013, with no violations of public policy or legal provisions.

8. Approval and Binding: Considering all aspects, the Tribunal approved the Scheme of Amalgamation, making it binding on the Shareholders, Creditors, and employees of the involved companies, with a specified Appointed date for the Scheme.

9. Further Clarifications: The Order clarified that it did not grant exemption from stamp duty, taxes, or any charges, emphasizing the need for compliance with relevant legal provisions and permissions.

10. Post-Approval Actions: Directions were provided for filing the Order with the Registrar of Companies, dissolution of Transferor Companies without winding up, consolidation of documents, and preparation of the Scheme sanction order by the Registry.

11. Conclusion: The Tribunal sanctioned the Scheme of Amalgamation, disposing of the petition, and providing a comprehensive framework for the implementation and post-approval processes as per the Companies Act and relevant rules.