2021 (8) TMI 334 - Tri - Companies Law

Approval of Scheme of Amalgamation - sections 230 232 of the Companies Act, 2013 and the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT - Various directions regarding holding and convening of various meetings issued - various directions regarding issuance of various notices also issued. The scheme is approved - application allowed.

Issues Involved:
1. Maintainability of the First Motion Application under Sections 230 & 232 of the Companies Act, 2013.
2. Dispensation of meetings of Shareholders, Debenture holders, Secured Creditors, and Unsecured Creditors.
3. Rationale and benefits of the proposed Scheme of Amalgamation.
4. Compliance with statutory requirements and regulatory approvals.
5. Valuation and share exchange ratio for the amalgamation.
6. Financial statements and accounting treatment compliance.

Issue-wise Detailed Analysis:

1. Maintainability of the First Motion Application:
The application is filed under Sections 230 & 232 of the Companies Act, 2013, and the Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016. The Transferee Company, Tenon Facility Management India Pvt. Ltd., has its registered office in Haryana, falling under the jurisdiction of the Chandigarh Bench. The Non-Applicant/Transferor Companies are under the jurisdiction of the NCLT, New Delhi, where a separate First Motion joint Application has been filed. The application is maintainable under Rule 3(2) of the Rules.

2. Dispensation of Meetings:
The Applicant Transferee Company seeks to dispense with the requirement of convening meetings of Shareholders, Debenture holders, Secured Creditors, and Unsecured Creditors. Affidavits from significant stakeholders have been filed, indicating their consent to the Scheme. Specifically, consents from 90.40% of Equity Shareholders, both Debenture holders, 99.13% of Secured Creditors, and 91.95% of Unsecured Creditors have been obtained. The Tribunal found these consents sufficient to dispense with the meetings.

3. Rationale and Benefits of the Proposed Scheme of Amalgamation:
The rationale includes business synergy, consolidation of resources, elimination of duplicate work, reduction in overheads, and improved cash management. The amalgamation aims to optimize and leverage existing resources, resulting in enhanced business efficiency and shareholder value. The Scheme will also reduce the multiplicity of legal and regulatory compliances, benefiting all stakeholders.

4. Compliance with Statutory Requirements and Regulatory Approvals:
The application states that no proceedings for inspection, inquiry, or investigation are pending against the Applicant Transferee Company. The Scheme does not involve corporate debt restructuring or buyback of shares, except for the cancellation of cross-holdings. No approval from the Competition Commission of India (CCI) is required, and none of the companies are regulated by RBI, SEBI, or other sectoral regulators. The Tribunal directed the Applicant to make a specific prayer in the Second Motion Petition for sending notices to statutory authorities.

5. Valuation and Share Exchange Ratio:
The valuation report by a Chartered Accountant and Registered Valuer proposes a share exchange ratio where the Transferee Company will issue 348 Equity Shares of ?10 each for every 10 Equity Shares of ?100 each held in Transferor Company No. 1. This ratio ensures fair treatment of shareholders in the amalgamation process.

6. Financial Statements and Accounting Treatment Compliance:
The Applicant filed its Audited Financial Statements as on 31.03.2020 and Un-audited Financial Statements for the period ended 31.12.2020. Certificates from Statutory Auditors confirm that the accounting treatment as per the Scheme complies with Section 133 of the Companies Act, 2013, and Generally Accepted Accounting Principles (GAAP) in India.

Conclusion:
The Tribunal allowed the First Motion Application, granting liberty to file the Second Motion Petition. The Applicant must make specific prayers for sending notices to statutory authorities, including the Central Government, Registrar of Companies, and Income Tax Department, and file an affidavit confirming no other sectoral regulator's involvement.

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