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2022 (2) TMI 677 - Tri - Companies LawSanction of Scheme of Amalgamation - Sections 230-232 of the Companies Act, 2013 - HELD THAT - All statutory requirements of the provisions of Sections 230-232 of the Act are satisfied. The present company scheme appears to be genuine and bona fide and it appears to be in the interest of its shareholders and creditors. There are no merits in the contentions of the Transferor Company that the Building is given on lease to the Transferee Company, hence depreciation is not required to be provided. The other submissions from the Petitioner are that no lease rent has been charged as it does not have any income; the ultimate object of the lease is only for the satisfaction of the banker. The company will be merged so no lease rent has been charged - the Transferor Company is hereby directed to show the Lease Rental as Income, Provide Depreciation of the Building, pay building taxes etc., dues if any, prepare cash flow statement from 2016-2017 to 2019-2020 and file revised Balance Sheet as on 31/03/2020 with the Registry and RoC within 45 days from today. The present Company Scheme Petition deserves to be allowed - Application allowed.
Issues Involved:
1. Sanction of Scheme of Amalgamation. 2. Compliance with statutory requirements. 3. Observations and objections by Regional Director. 4. Clarifications and responses by Petitioners. 5. Directions for revised financial statements. 6. Approval and conditions for the Scheme of Amalgamation. Issue-Wise Detailed Analysis: 1. Sanction of Scheme of Amalgamation: The Petitioner Companies sought approval under Sections 230-232 of the Companies Act, 2013 for a Scheme of Amalgamation between M/S. Luit Valley Enterprises Private Limited (Transferor Company) and M/S. Nemcare Hospital Tezpur Private Limited (Transferee Company). The Scheme aimed to transfer the entire undertakings of the Transferor Company to the Transferee Company, including all assets and liabilities. 2. Compliance with Statutory Requirements: The Bench had previously disposed of the First Motion petition with directions for compliance. The Petitioners were required to file an affidavit of compliance and address any clarifications sought by the Regional Director (RD). The RD's observations included issues related to the financial statements of the Transferor Company, such as the non-charging of depreciation, classification of borrowings, and the absence of a cash flow statement. 3. Observations and Objections by Regional Director: The RD's representation highlighted several deficiencies: - Non-charging of depreciation on the building for FY 2019-20. - Non-specification of dues of micro and small enterprises. - Misclassification of long-term borrowings. - Absence of lease rent or rental income in the financial statements. - Non-preparation of cash flow statements for several years. - Requirement for the Transferee Company to comply with Section 232(3)(i) and pay applicable stamp duty. 4. Clarifications and Responses by Petitioners: The Petitioners provided detailed clarifications: - The building was leased to the Transferee Company as mandated by the banker, and depreciation would be provided once the building was put to use. - The Transferor Company had no business operations, and the unsecured loan was from the Director. - No pending tax liabilities, and the Transferee Company undertook to settle any future claims. - Compliance with accounting standards and statutory requirements was assured. 5. Directions for Revised Financial Statements: The Tribunal directed the Transferor Company to: - Show lease rental as income. - Provide depreciation for the building. - Pay building taxes and prepare cash flow statements from 2016-2017 to 2019-2020. - File revised Balance Sheet as on 31/03/2020 with the Registry and RoC within 45 days. The Transferee Company was directed to incorporate these figures in the consolidated Balance Sheet as on the appointed date, 01/04/2020. 6. Approval and Conditions for the Scheme of Amalgamation: The Tribunal found the Scheme to be genuine, bona fide, and in the interest of shareholders and creditors. The Scheme was approved with the following conditions: - No exemption from payment of stamp duty, taxes, or other charges. - Transfer of all properties, rights, and liabilities of the Transferor Company to the Transferee Company. - Continuation of all pending proceedings by or against the Transferee Company. - All employees of the Transferor Company to become employees of the Transferee Company without interruption. - Payment of legal fees to the Official Liquidator and Regional Director. - Filing of the order and Scheme with the concerned authorities and Registrar of Companies. The joint Company Petition was allowed, and the Scheme of Amalgamation was sanctioned with the specified terms and conditions.
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