2020 (10) TMI 17 - Tri - Companies Law

Approval of Amalgamation Scheme - Sections 230 to 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and the National Company Law Tribunal Rules, 2016 - HELD THAT - In view of the foregoing, upon considering the approval accorded by the members and creditors of the Petitioner companies to the proposed Scheme, and the affidavits filed by the Regional Director, Northern Region, Ministry of Corporate Affairs and the report of official liquidator, there appears to be no impediment in sanctioning the present Scheme - Consequently, sanction is hereby granted to the Scheme under Section 230 to 232 of the Companies Act, 2013. The scheme is approved.

Summary

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

Analysis:
The Joint Application filed by the Petitioner Companies sought approval of the Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013. The Tribunal had previously issued directions for convening/dispensing with meetings of Shareholders and Creditors. The Petitioners complied with the order by publishing notices in newspapers and serving copies of the petition to relevant authorities. The Regional Director and Official Liquidator provided their observations and reports, with the Income Tax Department highlighting valuation concerns. The Petitioners filed a rejoinder affidavit addressing the Income Tax Department's points, clarifying the valuation methods and the appointed date's significance.

The Petitioners addressed the Income Tax Department's concerns adequately, explaining the valuation methodologies and the appointed date's role in the scheme of amalgamation. They also clarified the outstanding demands and legal proceedings of the Transferor Companies. The Petitioners emphasized that the appointed date is crucial for bookkeeping purposes and does not impact the valuation exercise. They cited relevant case law to support their position. The Tribunal found the Income Tax Department's observations sufficiently addressed by the Petitioners.

The Petitioners confirmed no pending proceedings against them and provided statutory auditors' certificates on Accounting Treatment compliance. The Tribunal highlighted that shareholders' decisions should not be interfered with unless necessary. Referring to legal precedent, the Tribunal's role is limited to ensuring the scheme's fairness and legality. The Tribunal granted sanction to the Scheme under Sections 230 to 232 of the Companies Act, 2013, after considering approvals from members, creditors, and reports from authorities.

The Tribunal ordered the dissolution of Transferor Companies without winding-up, transferring their assets, rights, powers, liabilities, and duties to the Transferee Company. It directed the continuation of proceedings and seamless employee transitions. The Petitioners were instructed to deliver a certified copy of the order to the Registrar of Companies for registration within thirty days. The order clarified that it did not exempt the Petitioners from statutory obligations like stamp duty payment and taxes. Interested parties were given the liberty to seek necessary directions from the Tribunal.

In conclusion, the Tribunal approved the Scheme of Amalgamation, ensuring compliance with statutory requirements and legal procedures, with a focus on fairness and legality throughout the process.