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TMI Blog2017 (12) TMI 1538X X X X Extracts X X X X X X X X Extracts X X X X ..... permitting dispensation as per exigencies of the situation. The companies involved in the Scheme should not be denied with an opportunity to seek sanction of their Scheme and hence a recourse or fall back has been provided by virtue of sub-Section (14) of Section 233 of the Act. Hence the Applicants/Petitioners have to show the reasons as to what prevents them from approaching the named authority prescribed in Section 233 of the Act for the sanction of the Scheme between companies envisaged thereunder and instead take recourse to this Tribunal for sanction. As seen that no such reasons have been given in the instant application by the companies involved in the Scheme of Merger or Amalgamation. Once the applicant companies elect to approach this Tribunal instead of taking recourse to the provisions of Section 233 of the Act, it consciously subjects itself to the rigors of the provisions of Section 230 to 232 of the Act of 2013 read along with attendant rules framed thereunder. Even though in some instances this Tribunal had dispensed with meetings, however they are far and few and even in the said cases it has been dispensed with in view of they being private limited companie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inable in view of Rule 3(2) of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and it is also represented that the registered office of both the applicant companies are situated within the territorial jurisdiction of this Tribunal and falling within the purview of Registrar of Companies, NCT, New Delhi. The Transferor Company it is represented is the wholly owned subsidiary of the Transferee Company and that presently the Transferor Company is not carrying on any business. Both the transferor and transferee companies have annexed their charter documents as well as the audited financial statements for the year ended 31.03.2017 and in addition unaudited provisional accounts for the period ended 30.06.2017. It is also represented that the board of directors of both the transferor and transferee companies have unanimously approved the proposed Scheme on 07 July 2017. 3. In relation to Mega Airways Limited being the Transferor Company in the Scheme marked as Annexure- A-3 , it is represented that it is having 8 Equity Shareholders and that seven of them are nominees of the Transferee Company and all of them have given their consents by way of affidavit. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sanction of the Scheme of Amalgamation, as per their choice. 5. In relation to the territorial jurisdiction, Ld. Counsel for the applicant companies submit that since the registered office of the respective companies fall within the purview of Registrar of Companies, NCT, New Delhi, this Tribunal has the necessary territorial jurisdiction to entertain the joint application. 6. This Tribunal however is not convinced by the representation put forth on behalf of the Petitioners/applicants that in the cases where the relationship between the Transferor and Transferee Company is that of a wholly owned subsidiary and a holding Company and that in the absence of any share exchange contemplated, then meeting should be dispensed with as was done by the Courts earlier under the provisions of Companies Act,1956. It is pertinent to note that under the erstwhile provisions of Companies Act, 1956, provisions which are analogous to Section 233 of the Companies Act, 2013 were not available for the companies to avail of. Hence taking into consideration the facts and circumstances of the case, Courts were permitting dispensation as per exigencies of the situation. However, in order to obviate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estions, he may communicate the same in writing to the Central Government within a period of thirty days: Provided that if no such communication is made, it shall be presumed that he has no objection to the scheme. (5) If the Central Government after receiving the objections or suggestions or for any reason is of the opinion that such a scheme is not in public interest or in the interest of the creditors, it may file an application before the Tribunal within a period of sixty days of the receipt of the scheme under subsection (2) stating its objections and requesting that the Tribunal may consider the scheme under section 232. (6) On receipt of an application from the Central Government or from any person, if the Tribunal, for reasons to be recorded in writing, is of the opinion that the scheme should be considered as per the procedure laid down in section 232, the Tribunal may direct accordingly or it may confirm the scheme by passing such order as it deems fit: Provided that if the Central Government does not have any objection to the scheme or it does not file any application under this section before the Tribunal, it shall be deemed that it has no objection to the scheme, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrangement referred to in section 230 or division or transfer of a company referred to clause (b) of subsection (1) of section 232. (13) The Central Government may provide for the merger or amalgamation of companies in such manner as may be prescribed. (14) A company covered under this section may use the provisions of section 232 for the approval of any scheme for merger or amalgamation. 7. From a perusal of the above provisions of Section 233 of the 2013 Act, it is quite evident that the procedure prescribed thereunder is less cumbersome and hence much more speedier and cost efficient as compared to the procedure prescribed under Section 230-232 of the Act and the simplified procedure has been made applicable essentially in relation to two categories of schemes of merger or amalgamations namely:- (1) Between two or more small companies; or (2) Between a holding company and its wholly-owned subsidiary company. 8. Thus the intent of the legislature is quite clear in the sense that while on the one hand it wants to cut down on the formalities required for compliance in relation to small companies and companies having the relationship of holding and wholly owned sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of sub-Section (14) of Section 233 of the Act. Hence the Applicants/Petitioners have to show the reasons as to what prevents them from approaching the named authority prescribed in Section 233 of the Act for the sanction of the Scheme between companies envisaged thereunder and instead take recourse to this Tribunal for sanction. 10. However, it is seen that no such reasons have been given in the instant application by the companies involved in the Scheme of Merger or Amalgamation.Further it is also to be seen that once the applicant companies elect to approach this Tribunal instead of taking recourse to the provisions of Section 233 of the Act, it consciously subjects itself to the rigors of the provisions of Section 230 to 232 of the Act of 2013 read along with attendant rules framed thereunder. Even though in some instances this Tribunal had dispensed with meetings, however they are far and few and even in the said cases it has been dispensed with in view of they being private limited companies and also closely held having miniscule number of shareholders and consents having been also obtained and produced. 11. However, in the instant case the same is not the position and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany or if not convenient at a suitable place as may be chosen by the Applicants of which prior approval shall be sought from this Tribunal within a period of 7 days from the date of this order and prior to the issue of notices. (ii) (b) With respect to unsecured creditors: Meeting of the unsecured creditors of the Transferee Company is directed to be held at 12:00 Noon on 29th January, 2018 at the registered office of the Transferee Company or if not convenient at a suitable place as may be chosen by the Applicants of which prior approval shall be sought from this Tribunal within a period of 7 days from the date of this order prior to issue of notices. (iii) (c) With respect to Secured Creditors:- Meeting stands dispensed with in view of there being none as represented by the Applicant/Transferee Company. 14. The quorum for the meeting of the equity shareholders shall be 800 in Nos. or 20% in value terms and in relation to unsecured creditors shall be 10 In Nos or 25% in value terms. ii) In case the quorum as noted above for the above meetings of the Applicant/ Transferee Company is not present at the meeting, then the meeting shall be adjourned by half an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oresaid, to be published in the English Daily Business Standard in English, and Jansatta in Vernacular stating the copies of Scheme of Amalgamation, the Explanatory Statement required to be furnished pursuant to Section 230 of the Companies Act, 2013 and the form of proxy shall be provided free of charge at the registered office of Applicant/ Transferee Company. vii) Voting shall be allowed on the proposed Scheme by voting in person, by proxy, through postal ballot or through electronic means as may be applicable to the respective companies under the Act and rules framed there under. The Chairperson shall as aforestated be responsible to report the result of the meeting within two weeks of the conclusion of the meeting with details of voting on the proposed scheme. viii) The companies shall individually send notice to Central Government, the Income Tax Authorities, Registrar of Companies NCT Delhi Haryana, Official Liquidator and Regional Director, stock Exchanges in which the shares are listed, RBI as well as other sectoral regulators who may have significant bearing on the operation of the applicant companies or the Scheme per se along with copy of required documents and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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