2020 (10) TMI 175 - Tri - Companies Law

Sanction of Scheme of Amalgamation - section 230 and 232 of the Companies Act, 2013 r/w the Companies (Compromises, Arrangements and Amalgamations) Rules 2016 - HELD THAT - Further perusal of the scheme shows that the accounting treatment is in conformity with the established accounting standards. In short, there is no apprehension that any of the creditors would lose or be prejudiced if the proposed scheme is sanctioned. The said Scheme of Amalgamation will not cast any additional burden on the stakeholders and also will not prejudicially affect the interests of any class of the creditors in any manner. The Appointed date of the said Scheme is 01st April, 2018 - The scheme does not require any modification as it appears to be fair and reasonable, not contrary to public policy and also not violative of any provisions of law. All the statutory compliances have been made under section 230 to 232 of the Companies Act, 2013 r/w the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The Scheme of Amalgamation between the Transferor Company and the Transferee Company was duly approved by the shareholders of respective companies. The Company Petitions are allowed and the scheme of Amalgamation annexed with the petition is hereby sanctioned which shall be binding on all the members, creditors and shareholders - Scheme is approved.

Summary

Issues involved:
Company Petition under sections 230 and 232 of the Companies Act, 2013 for Scheme of Amalgamation.

Detailed Analysis:
1. Background and Incorporation Details:
- Two Company Petitions filed for the Scheme of Amalgamation between Transferor and Transferee Companies.
- Details of Transferor and Transferee Companies' incorporation, main objects, and approval of the amalgamation scheme by their respective Board of Directors.

2. Compliance and Meetings:
- Tribunal's orders for convening and conducting meetings of shareholders and creditors of both companies.
- Compliance with orders by holding separate meetings and filing results before the Bench.

3. Benefits of Amalgamation:
- Operational synergies, consolidation of group structure, cost savings, improved organizational capability, and leadership.
- Simplification in compliance with laws, avoidance of cascading effects of multiple taxes, and efficient cash flow generation for growth opportunities.

4. Confirmation of No Investigations or Proceedings:
- No pending investigations against the companies under the Companies Act, 1956 or 2013.
- Regional Director's report confirming compliance with statutory returns and protection of stakeholders' interests.

5. Reports by Regional Director and Official Liquidator:
- RD's report on compliance with observations and payment of fees for enhanced authorized capital.
- OL's report on scrutiny of Transferor Company's accounts, approval of shareholders' allotment, and accounting treatment conformity.

6. Scheme Approval and Fairness:
- Scheme not falling within Competition Act, 2002 ambit.
- Scheme found fair, reasonable, compliant with laws, and approved by shareholders, leading to its sanction by the Tribunal.

7. Final Orders and Directions:
- Dissolution of Transferor Company without winding up upon filing the order with the Registrar of Companies.
- Direction for payment to the Official Liquidator and compliance with stamp duty, taxes, and other charges.
- Provision for applying for necessary directions related to the scheme's working and filing the order with the Registrar of Companies.

8. Conclusion and Sanction of Scheme:
- Sanction of the Scheme of Amalgamation, binding on all stakeholders.
- Clarification regarding exemption, dissolution of Transferor Company, payment directions, and preparation of the order as per the prescribed format.

9. Final Disposal of Petitions:
- Sanction of the Scheme annexed with the petitions and disposal of the Company Petitions.

This detailed analysis covers the key aspects of the judgment, including the background, compliance, benefits, reports by RD and OL, scheme approval, final orders, and conclusion leading to the sanction of the amalgamation scheme and disposal of the petitions.