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TMI Blog2021 (1) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Arrangement, annexed at pages 312 to 348 of the typed set filed along with the Company Petitions as well as the prayer made therein - the scheme is sanctioned - application allowed. - CP/1399/CAA/2019 in CA/921/CAA/2019 - - - Dated:- 5-5-2020 - R. Varadharajan, Member (J) And Anil Kumar B., Member (T) For the Appellant : T.K. Bhaskar, Bhagavath Krishnan, Vikram Jain For the Respondent : Aadil Currimbhoy, Advocates and B. Palani, Authorized Representative ORDER Anil Kumar B., Member (T) This Joint Company Petition has been filed by the Companies above named for the purpose of the approval of the Scheme of Arrangement (hereinafter referred to as Scheme , as contemplated between the companies, viz. M/s. KSS Abhishek Safety Systems Private Limited (hereinafter referred to as the Transferor Company ) and M/s. Takata India Private Limited (hereinafter referred to as the Transferee Company ) under Section 230 to 232 and other applicable provisions of the Companies Act, 2013(for brevity 'the Act') read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (for brevity 'the Rules') and the said Scheme is also annexed at Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been served to (i) The Regional Director, Chennai, on 12.02.2020 (ii) Registrar of Companies Chennai, on 12.02.2020, (iii) Official Liquidator, on 12.02.2020 (iv) Reserve Bank of India, on 12.02.2020, in compliance with the directions passed by this Tribunal and in proof of the same acknowledgements/receipts have also been enclosed. In relation to notice issued to the Income Tax Authorities, it has been stated that the same has been returned with an endorsement refused . However, it has been represented that the notice to the Income Tax Authorities have been sent by the Petitioner Companies in the first motion stage itself and the same was delivered and the Income Tax Authorities have also raised their memo of objections, which is dealt with in the later part of the order. 6. The Regional Director, (for brevity 'RD') Chennai to whom the notice was issued in the First Motion itself, has filed his Report on 17.01.2020 before this Tribunal and has stated that clause 6.6 of Part IV of the Scheme of Arrangement provides for the protection of the interest of the staff, workmen and other employees of the Transferor Company. It was also stated that as per the report of Registr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had engaged M/s. Madhavi Takiar Sehgal, Registered Valuer, IBBI to carry out the valuation of both the companies and to determine the swap ratio. The said firm had carried out the valuation and provided their report dated 16.05.2019 based on which the swap ratio stated is taken. Based on this financial year reported submitted to the Chartered Accountants, they confirm that the company has not declared any dividend to its shareholders for the preceding three financial years. The Accounting Policies have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. The fixed assets are valued at historical cost. The Transferor Company has provided the depreciation as per Companies Act. Expenditure is recognized on accrual basis. The following contingent liabilities on the company were not provided for as on 31.03.2019. Description Amount (in Lakhs) Sales Tax demands 55.65 Pending C Form 1.50 Contingent liabilities aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19, and the reply given by the Petitioner Companies are tabulated hereunder; 12. Further, it is also relevant to refer to the Judgment of the Hon'ble NCLAT in Joint Commissioner of Income Tax (OSD), Circle (3)(3) - 1, Mumbai -Vs- Reliance Jio Infocomm Ltd. in Company Appeal (AT) Nos. 113 and 114 of 2019, wherein the Hon'ble NCLAT has held that in view of the decision of the Hon'ble Supreme Court in Department of Income Tax -Vs-Vodafone Essar Gujarat Ltd. (2015) 16 SCC 629 wherein liberty was given to the Income tax Department to take out appropriate proceedings for recovery of any tax statutorily due from transferor or transferee company or any other person liable to pay such tax due, the scheme of arrangement as approved by NCLT was not be interfered with. 13. In Company Petition CAA-284/ND/2018 vide Order dated 12.11.2018, the NCLT New Delhi has made the following observations with regard to the right of the IT Department in the Scheme of Amalgamation, taking into consideration the clauses contained in the Scheme in relation to liability to tax and also as insisted upon by the Income Tax and in terms of the decision in RE: Vodafone Essar Gujarat L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from payment of stamp duty, taxes or any other charges, if any payment is due or required in accordance with law or in respect to any permission/compliance with any other requirement which may be specifically required under any law. THIS TRIBUNAL DO FURTHER ORDER: (i) That the Equity share capital of the Transferee Company shall be reduced from ₹ 174,40,00,000/- (Rupees One hundred and seventy four crores and forty lakhs only) divided into 17,44,00,000 (Seventeen crores and forty four lakhs) equity shares of ₹ 10/- (Rupees Ten Only) each to ₹ 40,40,00,000/- (Rupees Forty Crores and Forty Lakhs only) divided into 4,04,00,000 (Four crores and four lakhs) equity shares of ₹ 10/- (Rupees Ten Only) each by cancelling and extinguishing the paid up share capital to the extent of ₹ 134,00,00,000/- (Rupees One Hundred and Thirty Four Crores only) divided into 13,40,00,000 (Thirteen Crore and Forty Lakh only) equity shares of ₹ 10/- (Rupees Ten Only) each (ii) Consequent to the Reduction of the share capital, the Transferee Company shall pass accounting entries for cancellation of 13,40,00,000/- (Thirteen Crore and Forty Lakhs Only) issued, s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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