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TMI Blog2021 (4) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... and (2) of section 232 of the Companies Act, 2013 has been complied with, and hence the Scheme of Amalgamation, as approved - the scheme is sanctioned. Application allowed. - C. P. (CAA) Nos. 14 and 15/BB/2020 - - - Dated:- 19-3-2021 - Rajeswara Rao Vittanala, Member (J) And Ashutosh Chandra, Member (T) For Appearing Parties : Megha Savannur, Adv., Prema Hatti, Standing Adv. and Ganesh R. Ghale, Adv. ORDER Ashutosh Chandra, Member (T) 1. These Company Petitions were separately filed by M/s. Soha Systems India Private Limited (hereinafter referred to as the 'Petitioner/Transferor Company') and M/s. Akamai Technologies Solutions (India) Private Limited under Sections 230 to 232 of the Companies Act, 2013, by inter alia seeking that the Scheme of Amalgamation between Petitioner Companies be sanctioned by this Tribunal with effect from the Appointed Date of the Scheme, so as to be binding on all the shareholders, creditors of the Petitioner Companies and all concerned without any further act, deed or thing, etc. 2. Brief facts of the case, as mentioned in the Company Petition, which are relevant to the issue in question, are as follows: (1) M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 60071. Its Authorised Share Capital is ₹ 5,00,000/- divided into 5,00,000 Equity Shares of ₹ 1/- each and the Issued, Subscribed Paid-up Share Capital is ₹ 1,00,000/- divided into 1,00,000 Equity Shares of ₹ 1/- each fully paid up. The Company is carrying on the business of providing utility computing and secured content delivery network services that allow customers to shift their bandwidth processing and storage requirements by using a distributed network of servers that can be shared by customers worldwide as outsourced services and expand their presence on the web, etc. (4) The Board of Directors of the Transferor Company at its meeting held on 14.11.2018 have approved the Scheme of Amalgamation and inter alia resolved as under: RESOLVED THAT pursuant to the provisions of Sections 230 to 232 and other applicable provisions, if any of the Companies Act, 2013, and subject to the approval of the National Company Law Tribunal at Bangalore, the Company Soha Systems India Private Limited do merge with and into Akamai Technologies Solutions (India) Private Limited as detailed in the Scheme of Amalgamation placed before the Board of Directors. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 10/- each in the Transferee Company in lieu of every 875 equity shares of Re. 1/- each held by them in the Transferor Company. (9) With effect from the Appointed Date and upon the Scheme of Amalgamation becoming effective, the authorized capital of the Transferor Company shall stand combined with the authorized capital of the Transferee Company, such that authorized capital of the Transferee Company reflects the overall increased and modified authorized capital, as contained in Clause 16 of the Scheme of Amalgamation. Further, with effect from the Appointed Date and upon the Scheme of Amalgamation becoming effective and necessary approvals and filings being completed with the ROC, the authorized share capital of the Transferee Company shall automatically stand increased by the authorised share capital of the Petitioner/Transferor Company and shall be ₹ 15,00,000/- comprised of 1,50,000 equity shares of ₹ 10/- each, without any further act or deed on the part of the Transferee Company. The Transferee Company's shareholding held in the Petitioner/Transferor Company shall stand cancelled post approval of the Scheme of Amalgamation. The Transferee Company shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Unsecured Creditors of the Applicant Company be held on such date and time. The Tribunal vide its Order dated 31.05.2019 has directed to convene and hold the meeting of the Unsecured Trade Creditors of the Transferee Company. 5. The Tribunal vide its Order dated 17.02.2020 directed the Petitioner Companies to issue notice prepared by the Registry to the Regional Director (SER), Hyderabad, Registrar of Companies, Karnataka, the Office of Official Liquidator, the Office of the Principal Chief Commissioner of Income Tax, Karnataka, and to the Secretary, Competition Commission of India and further directed them to make a paper publication duly filing I.A. and to file proof of the same. In this regard the Petitioner Companies Vide M.A No. 02 03 dated 18.02.2021 it is affirmed that the Petitioner has caused paper publication in The Indian Express' and in 'Kannada Prabha' on 21.02.2021 in the above said papers. 6. The Authorised representative of Petitioner Companies have filed their respective Affidavits dated 15.03.2020 and stated that Petitioner Companies do not come under the purview of jurisdiction of the Competition Commission of India (CCI) as it is beyond the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 respectively But the Company has not spent any amount for the financial year 2017-18 and spent ₹ 10,00,000/- only for the financial year 2018-19. Transferor Company has not given reasons for not spending due CSR in the financial statement. As the Company can transfer CSR amount to the Prime Minister Cares Fund to meet COVID related matter, the company may be directed to transfer the due amount to the Fund. Hence the transferee company may be directed to give reasons for the unspent amount to comply with Section 135 of the Companies Act, 2013 for examination by the ROC. (5) Both the Transferor and the Transferee Company have related party transactions during the year 2017-18 and 2018-19. Necessary compliance under Section 188 of the Companies Act, 2013 may be submitted to the satisfaction of the ROC. (6) There are no prosecutions, complaints, technical scrutiny/inspections pending in this office against the petitioner Companies. The petition may be decided on merits. 8. In response to the aforesaid RD/ROC observations the Petitioner herein vide Reply Affidavit dated 01.12.2020, inter alia stated as follows: (1) Regarding the Observation No. 1 made by ROC RD, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 135 of the Companies Act, 2013 and hence we assume that there is no violation under the Companies Act, 2013 in this regard and if any notices have been served on the Company by the ROC the same shall be responded appropriately in accordance with the provisions of the Companies Act, 2013. (6) Regarding the observation No. 5 made by ROC RD, it is stated that the Petitioner Company is a Private Limited Company and therefore the provisions of Section 188 of the Act are not applicable to the Company. He further states that the transactions as disclosed on the notes to accounts are as per the requirement of AS-18 under accounting standards and were undertaken in the ordinary course of business at arm's length basis and thus, provisions of sub-section (1) of Section 188 of the Act were not applicable. 9. In response to the aforesaid Petitioner's Reply Affidavit dated 01.12.2020, the ROC and RD filed a Rejoinder dated 22.02.2021 inter alia stated as follows: (1) The Company has stated that all the requirements of FEMA/RBI has been complied with and the Transferee Company shall comply with all post approval of the Scheme as per requirements of the law. (2) The Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t been conducted in a manner prejudicial to the interest of the members of the company or public interest under section 230 to 232 of the Companies Act, 2013. Therefore, the Official Liquidator prays that suitable order(s) may be passed on the merits of the case. 12. Intimation of the Scheme of Amalgamation was sent to all relevant Statutory Authorities/Regulators. Wherever no response has been received from the said Authorities/Regulators, it is deemed that they have no objection to the proposed Scheme. 13. Heard Ms. Megha Savannur, learned Counsel for the Petitioner Companies and Mrs. Prema Hatti, learned Standing Counsel for ROC RD, Mr. Ganesh R. Ghale, learned Standing Counsel for the Income Tax, through Video Conference. We have carefully perused the pleadings of the Parties and the extant Provisions of the Companies Act and various Rules made thereunder and the Law on the issue. 14. We have considered the facts of the case as mentioned in the Petition, the reports of the Regional Director, MCA, the ROC as well as the comments offered by the Official Liquidator, RBI and the relevant provisions contained in the Companies Act, 2013 and other related Acts and Rules. Wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny, and duties of the Transferor Companies be transferred without further act or deed to the Transferee Company and accordingly the same shall, pursuant to section 232 of the Companies Act, 2013, be transferred to and become the liabilities and duties of the Transferee Company; and (5) The tax implications, if any, arising out of the Scheme are subject to final decision of Concerned Income Tax Authorities and the decision of the Concerned Tax Authorities shall be binding on the Transferee Company; and (6) All the proceedings now pending by or against the Transferor Company be continued by or against the Transferee Company, if any; and (7) The Transferor/Transferee Companies shall strictly comply with the provisions of the FEMA and RBI Regulations; and (8) The Transferor/Transferee Companies shall strictly comply with the RBI Regulations with regard to over dues towards ESOP, RSU and ESPP; and (9) Any liability, arising from non-compliance to the provisions contained in section 135, shall stand transferred to and be the liability of the Transferee Company, and further the Transferee Company shall submit details of compliance before the ROC within a period 30 days from ..... 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