2021 (10) TMI 714 - Tri - Companies Law

Approval of the Scheme of Amalgamation - Section 230 to 232 of Companies Act, 2013 read with the Companies (Compromise, Arrangements and Amalgamations) Rules, 2016 - HELD THAT - Considering the approval accorded by the Members and Creditors of all the Petitioner Companies to the proposed Scheme and no sustainable objections having been raised by the Office of the Regional Director, Income Tax Department or any other interested party, there does not appear to be any impediment in granting sanction to the Scheme. Accordingly, sanction is hereby granted to the Scheme of Amalgamation proposed by the Applicant Companies under Section 230 to 232 of the Companies Act, 2013. The scheme is approved - application allowed.

Issues Involved:
1. Approval of the Scheme of Amalgamation under Section 230 to 232 of the Companies Act, 2013.
2. Share exchange ratio for the amalgamation.
3. Dispensation of meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors.
4. Compliance with statutory requirements and observations from regulatory authorities.
5. Transfer and vesting of assets, liabilities, and benefits.
6. Dissolution of Transferor Companies without winding up.
7. Continuation of legal proceedings and liabilities.
8. Directions for filing and registration with the Registrar of Companies.

Detailed Analysis:

1. Approval of the Scheme of Amalgamation under Section 230 to 232 of the Companies Act, 2013:
The petition was jointly filed by the Transferor Companies and the Transferee Company seeking approval for the Scheme of Amalgamation. The Tribunal noted that the Scheme was placed on record, and the jurisdiction was confirmed as all companies had their registered offices in Delhi.

2. Share Exchange Ratio for the Amalgamation:
The Transferee Company was to issue shares to the shareholders of the Transferor Companies as per the specified share exchange ratio:
- Transferor Company No. 1: 33 equity shares of ?10 each for every 100 equity shares.
- Transferor Company No. 2: 69 equity shares of ?10 each for every 100 equity shares.
- Transferor Company No. 3: 14 equity shares of ?10 each for every 100 equity shares.

3. Dispensation of Meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors:
The Tribunal had earlier dispensed with the requirement of convening meetings of equity shareholders, secured creditors, and unsecured creditors of all companies, based on the First Motion petition.

4. Compliance with Statutory Requirements and Observations from Regulatory Authorities:
The Tribunal noted compliance with the directions for publication of the Scheme in newspapers. The Regional Director's initial observations were satisfactorily addressed, and no objections were raised. The Income Tax Department's observations were noted, ensuring that the department retains recourse for recovery of demands and future liabilities. The Official Liquidator confirmed that the affairs of the Transferor Companies were not conducted prejudicially.

5. Transfer and Vesting of Assets, Liabilities, and Benefits:
Upon the Scheme becoming effective, all assets, liabilities, benefits, entitlements, and concessions of the Transferor Companies would transfer to the Transferee Company. This includes contracts, employee terms, and all statutory benefits.

6. Dissolution of Transferor Companies without Winding Up:
The Transferor Companies would stand dissolved without the process of winding up from the appointed date of amalgamation, which was 31.03.2017.

7. Continuation of Legal Proceedings and Liabilities:
All pending proceedings by or against the Transferor Companies would continue by or against the Transferee Company. The liabilities of the Transferor Companies would transfer to the Transferee Company.

8. Directions for Filing and Registration with the Registrar of Companies:
The Petitioner Companies were directed to deliver a certified copy of the Order to the Registrar of Companies within thirty days. The Registrar would then consolidate the files of the Transferor Companies with the Transferee Company.

Conclusion:
The Tribunal granted sanction to the Scheme of Amalgamation, binding on the Transferor and Transferee Companies, their shareholders, and creditors. The Tribunal clarified that the Order does not exempt the companies from statutory dues or compliance with other legal requirements. The Company Petition was allowed in the specified terms.

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