2022 (6) TMI 624 - Tri - Companies Law

Seeking approval of the Composite Scheme of Amalgamation - Section 230 to 232 and other applicable provisions of the Companies Act, 2013 read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT - This Tribunal is of the considered view that the scheme as contemplated amongst the petitioner companies seems to be prima facie in compliance with the provisions of the Companies Act, 2013. Further there seems to be no objection on the part of the shareholders that the Scheme is in no way detrimental to the interest of the shareholders of the Company. In view of 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 Amalgamation along with Company Petitions as well as the prayer made therein. The Learned Counsel for the Petitioner Companies submitted that no investigation proceedings are pending against the Transferor or Transferee Companies under the provisions of the Companies Act, 1956 or the Companies Act, 2013 and no proceedings against the petitioner companies for oppression or mismanagement have been filed before this Hon'ble Tribunal or erstwhile Company Law Board - Notwithstanding the above, if there is any deficiency found or, violation committed qua any enactment, statutory rule or regulation, the sanction granted by this Tribunal will not come in the way of action being taken, albeit, in accordance with law, against the persons concerned and also the directors and officials of the petitioners. The scheme is approved - company petition are allowed.

Issues Involved:

1. Approval of Composite Scheme of Amalgamation.
2. Dispensation of meetings of shareholders and creditors.
3. Compliance with statutory and regulatory requirements.
4. Rationale and benefits of the proposed amalgamation.
5. Observations and objections from statutory authorities.
6. Accounting treatment and compliance with accounting standards.
7. Final judgment and orders of the Tribunal.

Issue-wise Detailed Analysis:

1. Approval of Composite Scheme of Amalgamation:

The petitioners sought approval for the Composite Scheme of Amalgamation between M/s. Vaiduriya Hotels Private Limited (Transferor Company) and M/s. Ratnaa Lakshmi Hotels Private Limited (Transferee Company) under Sections 230 to 232 of the Companies Act, 2013.

2. Dispensation of Meetings of Shareholders and Creditors:

The petitioners filed the First Motion Application seeking directions for dispensation of the meetings of the Equity Shareholders, Secured, and Unsecured Creditors of both companies. The Tribunal, on 04.02.2021, dispensed with these meetings based on consent affidavits and directed the issuance of notices to statutory/regulatory authorities and publication in newspapers.

3. Compliance with Statutory and Regulatory Requirements:

The petitioners complied with the Tribunal's directions by issuing notices to authorities such as the Regional Director, RoC, Income Tax Department, and Official Liquidator, and published notices in specified newspapers. Affidavits of Service were filed to confirm compliance.

4. Rationale and Benefits of the Proposed Amalgamation:

The rationale for the scheme included:
- Synergies in operations due to identical business activities.
- Improved infrastructure, amenities, and expansion opportunities.
- Enhanced financial and managerial resources.
- Common ownership and control by the same group of persons.
- Economies of scale and better market positioning.
- No adverse financial impact on the Transferee Company.
- No prejudice to creditors' interests as liabilities would vest in the Transferee Company.

5. Observations and Objections from Statutory Authorities:

Regional Director (RD):
- The RD observed that the appointed date of 01.04.2019 was not acceptable as it was ante-dated beyond a year, contrary to Section 232(6) of the Companies Act, 2013. The petitioners clarified that the appointed date complied with General Circular No. 09/2019 and was filed within one year.

Official Liquidator (OL):
- The OL's report, based on a Chartered Accountant's examination, found no adverse issues affecting the Transferor Companies. The Tribunal directed a payment of Rs. 50,000/- to the OL for the auditor's fees.

Income Tax Department:
- No representation or report was filed by the Income Tax Department, leading the Tribunal to presume no objections.

Other Statutory Authorities:
- The petitioners stated that their equity shares were not listed, thus not requiring compliance with SEBI Rules/Regulations.

6. Accounting Treatment and Compliance with Accounting Standards:

The statutory auditors certified that the scheme complied with the Companies Act, 2013, and applicable Indian Accounting Standards. The petitioners filed the auditor's certificate confirming compliance.

7. Final Judgment and Orders of the Tribunal:

The Tribunal, after detailed analysis, found the scheme compliant with the Companies Act, 2013, and not detrimental to shareholders' interests. The Tribunal sanctioned the scheme, directing:
- Transfer of properties, rights, and liabilities to the Transferee Company.
- Continuation of pending proceedings against the Transferee Company.
- Employment continuity for Transferor Company employees.
- The appointed date as 01.04.2019 and effective date within 45 days.
- Filing of revised Memorandum and Articles of Association and payment of differential fees.
- Allotment of shares in the Transferee Company to Transferor Company members.
- Delivery of a certified copy of the order to the Registrar of Companies.
- Dissolution of the Transferor Company without winding up.

The Tribunal clarified that the order did not exempt payment of stamp duty, taxes, or other charges and allowed any interested person to apply for necessary directions.

Conclusion:

The Composite Scheme of Amalgamation was sanctioned, binding on members, creditors, and shareholders of both companies, and the petitions were disposed of accordingly.

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