2022 (1) TMI 267 - Tri - Companies Law

Approval for the Scheme of Amalgamation - Sections 230-232 of the Companies Act 2013 - HELD THAT - After analysing the Scheme in detail this Tribunal is of the considered view that the scheme as contemplated amongst the petitioner companies seems to be prima facie beneficial to the Company and will not be in any way detrimental to the interest of the shareholders of the Company. In view of the 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 Scheme of Arrangement commonly appended as Annexure 5 with the Company Petitions as well as the prayers made therein. The scheme is approved - application allowed.

Issues Involved:
1. Approval and Rationale of the Scheme of Amalgamation
2. Compliance with Statutory Requirements
3. Observations and Reports from Statutory Authorities
4. Valuation Report and Accounting Treatment
5. Final Orders and Directions of the Tribunal

Detailed Analysis:

1. Approval and Rationale of the Scheme of Amalgamation:
The Transferor Company (TIL Nutraceuticals Private Limited) and the Transferee Company (Tablets (India) Limited) approved the Scheme of Amalgamation in their Board meetings held on 25th January 2020 and 28th January 2020, respectively. The Scheme aims to consolidate the businesses into one entity, facilitating operational efficiency, integration synergies, better supervision, and elimination of multiple entities within the group. The consolidation is expected to merge financial resources efficiently, leading to centralized management of funds, economies of scale, and reduction in administrative overheads. It also aims to improve internal controls and functional integration at various organizational levels.

2. Compliance with Statutory Requirements:
The Tribunal directed the Petitioner Companies to issue notices to statutory/regulatory authorities, including the Regional Director (Southern Region), RoC Chennai, Income Tax Department, and the Official Liquidator. Notices were published in "Business Standard" (All India Edition) and "Dina Mani" (Tamil Nadu Edition) on 20.10.2021. The Petitioner Companies filed an affidavit of service confirming compliance with these directions and provided proof of service to the relevant authorities. They also undertook that the Scheme does not fall under the threshold limits prescribed under Sections 5 and 6 of the Competition Act, 2002.

3. Observations and Reports from Statutory Authorities:
- Regional Director (RD): The RD raised concerns about the two appointed dates in the Scheme and requested the Tribunal to determine Appointment Date 2. The RD also noted that the Transferee Company's authorized share capital should be enhanced, and any difference fee should be remitted in accordance with Section 232(3)(i) of the Companies Act, 2013.
- Official Liquidator (OL): The OL appointed M/s. Gayathirri & Co., Chartered Accountants, to verify the affairs of the Transferor Company. The Chartered Accountants' report indicated no overdue amounts for PF and ESI, timely filing of returns with the Registrar of Companies, no pending cases or prosecutions, no public deposits, regular filing of income tax returns, and no declared dividends. The Transferor Company had taken a loan from the Transferee Company. The Tribunal directed the Transferor Company to pay ?50,000 to the OL for the Auditor's professional fees.
- Other Statutory Authorities: No objections were raised by other statutory authorities, including the Income Tax Department.

4. Valuation Report and Accounting Treatment:
The Valuation Report by Mr. Niranjan Kumar, Registered Valuer, recommended that 14 Equity Shares in Tablets (India) Limited be issued for every 600 Equity Shares in TIL Nutraceuticals Limited. The Statutory Auditors certified that the proposed Scheme's accounting treatment complies with applicable Indian Accounting Standards.

5. Final Orders and Directions of the Tribunal:
- The Tribunal found the Scheme beneficial to the Company and sanctioned it, noting the absence of objections and fulfillment of statutory compliances.
- The Tribunal clarified that the order does not exempt payment of stamp duty, taxes, or other charges due under the law.
- All properties, rights, liabilities, and obligations of the Transferor Company shall be transferred to the Transferee Company.
- The appointed dates for the Scheme are 01.04.2020 for Amalgamation and 31.03.2021 for Reduction of Share Capital.
- Pending proceedings by or against the Transferor Company shall continue against the Transferee Company.
- Employees of the Transferor Company shall become employees of the Transferee Company without any break in service.
- The Transferee Company must file revised Memorandum and Articles of Association with the Registrar of Companies, Chennai, and make requisite payments for enhanced authorized capital.
- The Transferor Company and the Transferee Company must deliver a certified copy of the order to the Registrar of Companies within thirty days, leading to the dissolution of the Transferor Company and consolidation of documents.
- Interested parties may apply to the Tribunal for necessary directions.

Conclusion:
The Tribunal allowed the Company Petition on the aforementioned terms, sanctioning the Scheme of Amalgamation between the Transferor and Transferee Companies.

← Previous Next →