2020 (10) TMI 278 - Tri - Companies Law

Approval of the Scheme of Amalgamation - Section 230 to 232 and other applicable provisions of the Companies Act, 2013 read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT - The Official Liquidator sought to take on record and consider the report of the Chartered Accountant and has also sought to fix the remuneration payable to the Auditor who has Investigated into the affairs of the Transferor Company. In this regard, this Tribunal hereby directs the Transferor Company - 5 and Transferor Company - 6, jointly to pay a sum of ₹ 50,000/-to the Official Liquidator for the payment of fees payable towards the Auditor who has investigated into the affairs of the Transferor Companies. Upon a query raised by this Tribunal in relation to the filing of this Petition by the Petitioner Companies under Section 230 - 232 of the Companies Act, 2013, since the Transferor Companies are wholly owned subsidiaries of the Transferee Company and as such why they have not filed the present Scheme under Section 233 of the Companies Act, 2013, the Learned AR for the Petitioner Companies submitted that the wholly owned subsidiary Companies i.e. the Transferor Companies are not solvent and as such they cannot comply with Section 233(1)(c) of Companies Act, 2013 and in the said circumstances, have filed the current petition for the approval of the Scheme under Section 230 - 232 of the Companies Act, 2013. In view of absence of any other objections having been placed on record before this Tribunal and since all the requisite statutory compliances having been fulfilled, this Tribunal, sanctions the Composite Scheme of Arrangement, annexed as Annexure E with the Company Petitions as well as the prayer made therein - While approving the Scheme as above, it is clarified that this order should not be construed as an order in any way granting exemption from payment of stamp duty, taxes or any other charges, if any payment is due or required in accordance with law or in respect to any permission/compliance with any other requirement which may be specifically required under any law. Petition allowed.

Issues Involved:
1. Approval of the Scheme of Amalgamation.
2. Territorial jurisdiction of the Tribunal.
3. Compliance with statutory requirements and directions.
4. Protection of employees' interests.
5. Payment of fees for increased authorized capital.
6. Examination of the Scheme by the Regional Director and Official Liquidator.
7. Compliance with Accounting Standards.
8. Absence of objections from statutory authorities.
9. Pending investigation proceedings.
10. Sanctioning of the Scheme and related orders.

Detailed Analysis:

1. Approval of the Scheme of Amalgamation:
The petitions were filed for the approval of the Scheme of Amalgamation among several companies, including the Transferor Companies and the Transferee Company, under Sections 230 to 232 of the Companies Act, 2013. The Scheme was annexed as Annexure "E" in the petitions.

2. Territorial Jurisdiction of the Tribunal:
The registered offices of Transferor Companies 1 to 4 were in Mumbai, falling under the jurisdiction of NCLT, Mumbai, which had already sanctioned the Scheme. The petitions were filed by Transferor Companies 5 and 6 and the Transferee Company, whose registered offices were in Tamil Nadu, under the jurisdiction of this Tribunal.

3. Compliance with Statutory Requirements and Directions:
The First Motion Application sought directions for dispensation and convening of meetings, and the Tribunal issued directions on 01.10.2019. Notices were served to statutory/regulatory authorities, and public notices were published in "Business Standard" and "Maalai Chudar."

4. Protection of Employees' Interests:
The Regional Director's report stated that the Scheme provided for the protection of the interests of the employees of the Transferor Companies. The Petitioner Companies were regular in filing statutory returns, with no pending prosecutions or inspections.

5. Payment of Fees for Increased Authorized Capital:
The Regional Director observed that the Transferee Company must comply with Section 232 (3) (i) of the Companies Act, 2013, regarding the payment of fees for enhanced authorized capital. The Petitioner Companies undertook to amend the Memorandum and Articles of Association and pay the requisite fees.

6. Examination of the Scheme by the Regional Director and Official Liquidator:
The Regional Director did not object to the Scheme, except for the observation on authorized capital fees. The Official Liquidator's joint report stated that the affairs of Transferor Companies 5 and 6 were not conducted prejudicially. The Chartered Accountant's report confirmed compliance with Accounting Standards and no adverse findings.

7. Compliance with Accounting Standards:
The Petitioner Companies filed a certificate of compliance with Accounting Standards, fulfilling the requirements of Sections 230 (7) and 232 (3) of the Companies Act, 2013.

8. Absence of Objections from Statutory Authorities:
Despite notices, there was no representation from the Income Tax Department, implying no objections to the Scheme.

9. Pending Investigation Proceedings:
The Petitioner Companies confirmed no pending investigation proceedings under the Companies Act, 1956 or 2013.

10. Sanctioning of the Scheme and Related Orders:
The Tribunal sanctioned the Composite Scheme of Arrangement, with specific orders regarding the transfer of properties, liabilities, and proceedings to the Transferee Company. The appointed date for the Scheme was 1st April 2018. Employees of Transferor Companies 5 and 6 were to become employees of the Transferee Company without interruption. The Transferee Company was directed to file revised Memorandum and Articles of Association and pay the differential fee for enhanced authorized capital. Transferor Companies 5 and 6 were to be dissolved upon registration of the Tribunal's order with the Registrar of Companies.

Conclusion:
The Tribunal allowed the Company Petitions, sanctioning the Scheme of Amalgamation on the aforementioned terms, with provisions for further directions if necessary. The order clarified that it did not exempt payment of stamp duty, taxes, or other charges required by law.

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