2021 (12) TMI 1240 - Tri - Companies Law

Sanction of Scheme of Amalgamation - Sections 230-232 of the Companies Act, 2013 - HELD THAT - The meetings of the Members/ Equity Shareholders of both the Applicant Companies and the Creditors of both the Applicant Companies are hereby dispensed with - directions with regard to issuance of various notices also issued. The scheme is approved - application allowed.

Issues Involved:
1. Sanction of the Proposed Scheme of Amalgamation under Sections 230-232 of the Companies Act, 2013.
2. Dispensation of meetings of Equity Shareholders and Creditors.
3. Directions for notices to sectorial regulators or authorities.
4. Transfer and vesting of properties, rights, and liabilities.
5. Exchange ratio of shares.
6. Compliance with legal requirements and verification of documents.

Issue-wise Detailed Analysis:

1. Sanction of the Proposed Scheme of Amalgamation:
The Petitioner Companies sought the Tribunal's sanction for the Proposed Scheme of Amalgamation between Cachar Ispat Private Limited (CIPL) and Ladi Steel Industries Private Limited (LSIPL) and their respective shareholders. The rationale provided included the inoperative status of CIPL, the utilization of its resources by LSIPL, and the benefits of consolidation, such as efficient and economical business operations, reduced costs, and enhanced capacity for raising funds.

2. Dispensation of Meetings of Equity Shareholders and Creditors:
The companies received consents from their shareholders and creditors, leading to the request for dispensing with their meetings. The Tribunal accepted the consents in the form of affidavits, thereby dispensing with the requirement to hold meetings for the approval of the Scheme.

3. Directions for Notices to Sectorial Regulators or Authorities:
The Tribunal directed the Applicant Companies to issue notices in Form No. CAA.3 to the Central Government, Registrar of Companies, Official Liquidator, and Income Tax Authorities. These notices were to inform these authorities to make any representations within 30 days, failing which it would be presumed they had no objections.

4. Transfer and Vesting of Properties, Rights, and Liabilities:
The Scheme proposed that all properties, rights, and interests of the Transferor Company (CIPL) be transferred to and vested in the Transferee Company (LSIPL) without any further act or deed, as per Section 232 (1) of the Companies Act, 2013. Similarly, all liabilities and duties of CIPL would become those of LSIPL. Pending proceedings against CIPL would continue against LSIPL.

5. Exchange Ratio of Shares:
The exchange ratio of shares was fixed at 760:1000, meaning shareholders of CIPL would receive 760 shares in LSIPL for every 1000 shares held in CIPL. This ratio was based on a valuation report prepared by a registered valuer, ensuring it was fair and reasonable.

6. Compliance with Legal Requirements and Verification of Documents:
The companies submitted various documents, including board resolutions, auditor certificates, affidavits verifying lists of creditors and shareholders, and certificates of compliance with Section 133 of the Companies Act, 2013. They also confirmed no pending investigations or proceedings, except for disputed demands by tax authorities. The Tribunal verified these documents and found the aggregate assets sufficient to meet liabilities, ensuring no adverse effect on creditors' rights.

Conclusion:
The Tribunal, after hearing the learned Counsel and considering the consent affidavits, allowed the application in terms of the prayer clauses. The meetings of the Members/Equity Shareholders and Creditors were dispensed with. The Tribunal issued directions for notices to relevant authorities and set a timeline for representations. The first motion petition was allowed and disposed of, subject to compliance with the specified directions.

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