2020 (10) TMI 173 - Tri - Companies Law

Sanction of Composite Scheme of Arrangement and Amalgamation - sections 230 to 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangement and Amalgamation) Rules, 2016 - HELD THAT - From the material on record, the Scheme appears to be fair and reasonable and is not in violation of any provisions of law and is not contrary to public policy - Since all the requisite statutory compliances have been fulfilled, the Company Petition is made absolute in terms of the prayers thereof. The Transferor-Company be dissolved without the process of winding up - scheme is sanctioned.

Summary

Issues Involved:
1. Compliance with statutory requirements and directions of the Tribunal.
2. Approval and sanction of the Composite Scheme of Arrangement and Amalgamation.
3. Observations and compliance regarding the report of the Regional Director.
4. Observations and compliance regarding the report of the Official Liquidator.
5. Dissolution of the Transferor Company without winding up.
6. Lodging certified copies of the Order and Scheme with the concerned authorities.

Detailed Analysis:

1. Compliance with statutory requirements and directions of the Tribunal:
The Petitioner Companies have complied with all requirements as per the directions of the Tribunal and filed necessary affidavits of compliance. They also undertook to comply with all statutory requirements under the Companies Act, 2013 and related Rules. This undertaking was accepted by the Tribunal.

2. Approval and sanction of the Composite Scheme of Arrangement and Amalgamation:
The Tribunal's sanction was sought under sections 230 to 232 of the Companies Act, 2013, read with the Companies (Compromises, Arrangement, and Amalgamation) Rules, 2016, for the Composite Scheme of Arrangement and Amalgamation between Fairchem Speciality Limited, Fairchem Organics Limited, and Privi Organics India Limited. The Petitioner Companies approved the Scheme through board resolutions passed on May 22, 2019. The Scheme was filed in consonance with the Tribunal's Order dated January 22, 2020, in the connected Company Application.

3. Observations and compliance regarding the report of the Regional Director:
The Regional Director's report dated June 16, 2020, stated that the Scheme was not prejudicial to the interest of shareholders and the public, subject to certain observations:
- Compliance with AS-14 (Ind AS-103) and necessary accounting entries.
- Clarification on the Appointed Date and Effective Date as per section 232(6) of the Companies Act, 2013.
- Confirmation that the Scheme enclosed to the Company Application and Petition are the same.
- Notices to applicable regulatory authorities under section 230(5) of the Companies Act, 2013, were served.
- Filing of e-form MGT-14 by the Resulting Company and protection of creditors' interests.
- Compliance with section 232(3)(i) regarding the set-off of fees on the authorized share capital.
- Compliance with provisions for the amendment of the Transferee Company's name.
- Approval of the Scheme by the requisite majority of members and creditors.

The Petitioner Companies provided necessary clarifications and undertakings for each observation, which were accepted by the Tribunal.

4. Observations and compliance regarding the report of the Official Liquidator:
The Official Liquidator's report dated February 20, 2020, stated that the affairs of the Transferor Company were conducted properly and not prejudicial to shareholders' interests. The Transferor Company was recommended to be dissolved.

5. Dissolution of the Transferor Company without winding up:
The Tribunal ordered the Transferor Company to be dissolved without the process of winding up.

6. Lodging certified copies of the Order and Scheme with the concerned authorities:
The Petitioner Companies were directed to lodge a certified copy of the Order and the Scheme with the concerned Superintendent of Stamps within 60 working days for stamp duty adjudication. Additionally, they were to lodge a certified copy of the Order and the Scheme with the Registrar of Companies electronically in Form INC-28 and physically within 30 days from the date of issue of the Order.

Conclusion:
The Tribunal found the Scheme to be fair, reasonable, and not in violation of any law or public policy. All requisite statutory compliances were fulfilled, and the Company Petition was made absolute in terms of the prayers. The Transferor Company was ordered to be dissolved, and the Petitioner Companies were directed to comply with the necessary procedural requirements. The judgment was pronounced on June 30, 2020.