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TMI Blog2020 (9) TMI 1086X X X X Extracts X X X X X X X X Extracts X X X X ..... ed ("Transferee Company"). The joint petition is maintainable in terms of Rule 3 (2) of the Rules. 2. The Petitioner Company filed First Motion Application bearing CA (CAA) No. 4/Chd/Pb/2019 ("First Motion Application") before this Tribunal for seeking directions to convene the meetings of equity shareholders and the unsecured creditors of Transferor Company as well as for seeking dispensation of the meetings of secured creditors in Transferor Company. 3. The First Motion Application was disposed of vide order dated 12.04.2019 with direction to hold the meetings of equity shareholders and unsecured creditors of Transferor Company. Further, meeting of secured creditors in Transferor Company was dispensed with as mentioned in the order dated 12.04.2019 attached at Annexure A-28 of the petition. 4. The affidavits dated 21.05.2019 of the authorized representative of the petitioner company with regard to the compliance of all the directions given in the order dated 12.04.2019 was filed vide Diary No. 2608 dated 22.05.2019. 5. The report dated 06.06.2019 of the Chairperson alongwith the report of the Scrutinizer in respect of the meetings of the equity shareholders and unsecured cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . LLP dated 02.12.2018 (Annexure A-23 of the petition). The Share Exchange Ratio is as follows:- "439 (four hundred and thirty nine) equity shares of HUL (of INR 1/- each fully paid up) for 100 (hundred) equity shares held in GSK CH (of INR 10/- each fully paid up)." 12. When the petition was listed on 09.12.2019, the following directions were issued:- "8. The petition be listed for hearing on 16.01.2020. Notice of hearing be advertised in the same newspapers as in the first motion petition i.e. 'Financial Express' (English) Punjab Edition and 'Punjabi Tribune' (Punjabi), Chandigarh Edition not less than 10 days before the aforesaid date fixed for hearing. 9. Notice be also served upon the Objector(s) or their representatives as contemplated under sub-section (4) of Section 230 of the Act who may have made representation and who have desired to be heard in their representation along with a copy of the petition and the annexures filed therewith at least 15 days before the date fixed for hearing. It be specified in the notices that the objections, if any, to the Scheme contemplated by the authorities to whom notice has been given on or before the date of hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany through courier to all the above mentioned statutory authorities are also a part of Diary No. 255. 14. It is also submitted in this affidavit that as on the date of affidavit, the petitioner company has not received any representations from any objectors, expressing their desire to be heard by this Tribunal in relation to the Scheme. As per the report dated 10.01.2020, the Registry has reported that no objections have been received as per order dated 09.12.2019 in relation to the present Scheme of amalgamation between the Transferor and Transferee Company. 15. It is deposed that there are no other statutory authorities/sectoral regulators governing the business of the petitioner company. It is further submitted that apart from the statutory authorities/sectoral regulators as mentioned in Annexure-18 of the First Motion Application, there are no statutory authorities/sectoral regulators available for the purposes of issuance of notice. It is also submitted that no objections to the Scheme have been received by the petitioner company from any of the sectoral regulators/statutory authorities or from any other person. The affidavit in this regard is a part of Diary No. 256 date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Official Liquidator (OL) has submitted that they have filed their report vide Diary No. 6000 dated 31.10.2019 and the same may be considered as report to this Second Motion Petition as well. In its report, the OL has largely touched upon the contents of the petition and has prayed that this matter may be decided on merits of the case. 20. Learned counsel for the Income Tax Department submitted that the department has filed reports vide Diary No. 442 dated 17.01.2020 and Diary No. 851 dated 31.01.2020(in respect of Transferee Company). It is submitted that all the assessment proceedings in respect of the Assessment Years, which were barred by limitation as on 31.12.2019 have been completed and the draft assessment orders have been passed for Assessment Years 2011-12, 20112-13 and 2016-17. It is also submitted that the final order has been passed for the Assessment Years 2015-16 and the assessee has filed objections against the draft order passed for Assessment Years 2011-12 and 2012-13 before DRP and it is most likely that the assessee will not accept the draft assessment order for the Assessment Years 2016-17. It is also submitted that all these cases will be referred to DRP and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , submitted by the company, after filing the Scheme with Stock Exchange and from the date of receipt of this letter is displayed on the website of the listed company. It is also stated that the company shall duly comply with various provisions of SEBI Circular No. CFD/DIL3-CIR/2017/20 dated March 10,2017. It is also stated that the petitions are filed by the company before NCLT after processing and communication of comments/observations on draft scheme by SEBI/Stock Exchange, therefore, the company is not required to send notice for representation as mandated under Section 230(5) of the Companies Act, 2013 to SEBI again for its comments/representations. It is further submitted that NSE has granted no objection in terms of Regulation 94 of SEBI (LODR) Regulation, 2015 for the present Scheme of Amalgamation. 25. BSE Limited has forwarded a letter dated 15.02.2019 (Annexure A12 of petition) wherein the same observations as of NSE have been reiterated. 26. The Petitioner Company has filed affidavit dated 10.01.2020 in relation to compliance with the observations of NSE and BSE, vide Diary No. 257 dated 10.01.2020 wherein the Petitioner Company has confirmed that it has complied with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the competent Labour Commissioner at SAS Nagar, Mohali, Punjab and the said fact was not only concealed in the Scheme but also not explained how the same will be dealt with after the Transferor Company amalgamates with the Transferee Company. (iii) The Workers Union want that an undertaking be filed by the Transferor Company that its employees, after the merger with the Transferee Company shall not be terminated and that they will be continued, with the same benefits, terms and conditions. (iv) Reliance was placed on a decision of the Hon'ble Bombay High Court in Air India Employee's Union & others Vs. Air India Limited & others, 2014(1) LLN 364. (b)(i) Mr. Sanjeev Puri, the learned Senior Counsel appearing for the applicant companies while drawing our attention to Para 14(i) of the Scheme of Amalgamation submits that as long as the service conditions of the employees of the Transferor Company are not changed in any manner, even after amalgamation with the Transferee Company, the Employees/Workers cannot have any objection for the Scheme. The learned Senior Counsel placed reliance on the decision of the Hon'ble Apex Court in Hindustan Lever Employees' Uni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dues of the Transferor Company Employees would be continued to be deposited in the existing Employee Benefit Funds of the Transferor Company. It is clarified that upon transfer of the aforesaid funds to the respective funds of the Transferee Company, the existing trusts created for such funds by the Transferor Company shall stand dissolved. (v) Notwithstanding the aforesaid, the Board of the Transferee Company, if it deems fit and subject to Applicable Law, shall be entitled to: (a) retain separate trusts or funds within the Transferee Company for the erstwhile fund(s) of the Transferor Company; or (b) merge the pre-existing funds of the Transferor Company with other similar funds of the Transferee Company." (d) A bare perusal of the above paragraph clearly shows that the Scheme does not propose any change of any service condition of the employees of the Transferor Company, after its merger with the Transferee Company. Hence, the employees of the Transferor Company cannot have any objection for the Scheme as no change in their service conditions is proposed in the Scheme. (e) Since it is also provided under the Scheme that all the proceedings now pending by or against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and conditions, will continue to enjoy their old service conditions under the new management. Xxx xxx xxx xxx 83. No one can envisage what will happen in the long run. But on this hypothetical question, the Scheme cannot be rejected. As of now, it has not been shown how the workers are prejudiced by the Scheme." (g) The Hon'ble High Court of Gujarat in Gujarat Nylons Ltd. (Supra), held as under:- "27. I have heard Mr. K.S. Zaveri, the learned counsel appearing for the employees of the transferor Company at length. However, I do not find any substance in any of the contentions raised by him. In my opinion, conjoint reading of Sections 391 and 394 of the Act make it amply clear that the workmen of the Transferor Company have no legal or statutory right of holding meeting and to express their opinion on the question of amalgamation. There is statutory provision to that effect. No judgment has been shown to me wherein such a view has been taken by the court that a meeting of the workmen is a condition precedent in the proceeding of amalgamation of scheme under Section 394 of the Act. Xxx xxxx xxxx xxx 36. Mr. Zaveri further contended that if there is amalgamation of tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions will be decided in those proceedings. Granting of sanction of amalgamation of companies by this court would not come in the way of workmen, while deciding the question which may be raised in those proceedings. Even though this legal position is abundantly clear, Mr. Raval stated that if the employees of the transferee company feel aggrieved, they can approach an appropriate forum if so advised and those proceedings will be disposed of in accordance with law by appropriate authorities under the relevant statutes." (h) In view of the various provisions of law governing the Scheme of Amalgamation of companies and the above referred decision of the Hon'ble Supreme Court of India and Hon'ble Gujarat High Court, the various grounds raised on behalf of the Workers Union are rejected. The facts in Air India Employee's Union & others (supra) are not applicable to the present case and does not support the submissions made on behalf of the Workers Union. 31. In view of the above discussion, we conclude that the objections/observations to the Scheme received from RD, RoC, OL, BSE, NSE, IT Department and the Workers Union have been adequately replied by the Petitioner Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;; and vii) That the Petitioner Company do, within 30 days after the date of receipt of the order of this Tribunal, cause a certified copy of this order to be delivered to the Registrar of Companies for registration and on such certified copy being so delivered, the Transferor Company shall be dissolved without undergoing the process of winding up and the concerned Registrar of Companies shall place all documents relating to the Transferor Company and registered with him on the file kept in relation to the Transferee Company and the files relating to the said Transferor and Transferee Companies shall be consolidated accordingly, as the case may be; and viii) That the Transferor Company shall deposit an amount of Rs. 1,00,000/- (Rupees One Lac only) with the Pay & Accounts Officer in respect of the Regional Director, Northern Region, Ministry of Corporate Affairs within a period of three weeks from the receipt of the certified copy of this order. ix) That any person interested shall be at liberty to apply to the Tribunal in the above matter for any directions that may be necessary, and x) The approval / sanctioning of the scheme shall not be construed as an exemption from any ..... 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