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TMI Blog2021 (8) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... 56 bearing CIN: U72200KA2010PTC054447. Its Authorised Share Capital is Rs. 33,00,000 divided into 20,00,000 Equity Shares of Re. 1/- each; 1,000 Series A Equity Shares of Re. 1/- each; 3,00,000 Series A Preference Shares of Re. 1/- each; 8,49,000/- Series B Preference Shares of Re. 1/- each; 1,50,000 Series C Preference Shares of Re. 1/- each and Issued, Subscribed and Paid-up Share Capital is Rs. 19,16,865/- divided into 19,16,865 Equity Shares of Re. 1/- each. Its main objects inter alia, are to develop, test, market, distribute, purchase, license, sell, import, export software products, software programs, multimedia content, hardware devices, and equipment and necessary services to education industry in India and abroad, consisting of all schools, colleges, universities, corporate, and for any other (2) M/s. Indiavidual Learning Limited (hereinafter referred to as Petitioner Company No. 2/Transferee Company) was incorporated on 28.08.2012 with CIN No. U80301HR2012PTC046937 under the provisions of the Companies Act, 1956 under the name and style of "Indiavidual Learning Private Limited" in Panchkula with Registrar of Companies, National Capital Territory of Delhi and Haryana. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Scheme provides for the amalgamation of the Transferor Company with the Transferee Company and will streamlining of the corporate structure, leading to greater synergies; attaining consolidation of all assets including intellectual property rights amongst the Transferor Company and Transferee Company; Cost Savings through legal entity rationalization; and reducing administrative costs and regulatory compliances thereof. (6) The Petitioner Company Nos. 1 & 2 has related party transactions and the same are disclosed in the audited financial statements for the Financial Year ended March 31, 2020. The Petitioner Companies are not required to spend CSR amount, since it does not fall under the ambit of Section 135 of Companies Act, 2013. (7) Upon this Scheme becoming effective, entire investment of the Petitioner Company No. 2 in the Petitioner Company No. 1 shall stand cancelled without any further Application, act or deed by any person or authority. (8) The Petitioner Companies have filed C.A.(CAA) No. 30/BB/2020 before this Tribunal and the Tribunal, vide its Order dated 16.09.2020 dispensed with the meetings of the Petitioner Companies for the purpose of considering, and appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny is merging with a public limited Company. Both the transferor and the Transferee Companies are loss making Companies. (3) Clause 15 of Part III of the scheme provides for Clubbing of Authorized Capital. However, as per the Clause, the authorized share capital of the Transferee Company shall automatically stand increased without any further fees payable to the Registrar of Companies. This term in the Scheme is not in line with the provisions of Section 232 (3) (i) of the Companies Act, 2013. In this regard, the Transferee Company shall comply with provisions of the aforementioned section and pay the difference fee, after setting off the fee already paid by the Transferor Company on its respective capital. In case the Transferee Company intend to club the Authorized Capital of Transferor Company, a separate application to be made to ROC for clubbing within one month from the order or else interest will be levied as per the provisions of Section 403 of the Companies Act, 2013. (4) As per the Balance Sheet attached to the petition as at 30.09.2020 of Transferee Company, non-current borrowing by issue of 399997 cumulative CCPs for an amount of Rs. 578.35 Crores has been shown. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,62,720/- (divided into 53,62,720 Equity Shares of Re. 1/- each) by cancelling and extinguishing 8,427 0.001% Non-Cumulative Convertible Preference Shares of Re. 1/- each. (11) There are no prosecutions, complaints, technical scrutiny/inspections pending in this office against the Petitioner Companies. (12) The Petition may be decided on merits. 5. In pursuant to the above observations made by the ROC and RD, the Petitioner Company has filed an affidavit dated 13.03.2021, by inter alia explaining as below: (1) It is submitted that on 16.12.2019, the Transferee Company acquired 17,34,060 equity shares of Re. 1/- each in the Transferor Company (including 5 Shares held through nominees of the Transferee Company), tantamounting to 90.46% of the paid-up share capital of the Transferor Company. On 24.06.2020, the Transferee Company further acquired 1,82,805 equity shares of Re. 1/- each in the Transferor Company, which resulted in the Transferor Company becoming a wholly owned subsidiary of the Transferee Company. (2) It is submitted that the Petitioner Companies did not have any creditors at the time of filing of the Company Application with the NCLT as all the creditors were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Subsequently, the Transferee Company had issued and allotted further 6,99,999 CCPS on rights basis. As on 24.06.2020, the total CCPS issued and allotted by the Transferee Company is 34,69,197 CCPS of Re. 1/- each. Necessary information had been filed with ROC in Form PAS-3 on 27.06.2020 vide SRN R43523570 and records of the Transferee Company were duly updated. (5) The Transferee Company had issued and allotted 8427, 0.001% Non-Cumulative Compulsorily Convertible Preference Shares of Re. 1/- each at premium of Rs. 135.92/- aggregating to Rs. 11,53,846.15/- to Spruce Street Investments (SSI), a foreign entity on 13.02.2014. However, the consideration for the said preference shares was paid by Mr. Sunny B Rao from his Indian Rupee account. Mr. Sunny B Rao was at the relevant time, a shareholder of SSI. Due to the aforesaid error in allotment, the Transferee Company had filed an Application with this Tribunal for reduction of aforesaid preference shares, which was approved vide Order dated 07.02.2020. As per the direction of this Tribunal in the said Order, the Transferee Company filed the Order with the Registrar of Companies, Bangalore on 20.07.2020 and received the certificates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of scrutiny of books and papers of Transferor Company. b. In our opinion proper books of accounts, papers, statutory registers and other related records as required by Law have been kept by the Transferor Company as far as it appears from our examinations. c. On scrutiny of books of accounts, papers, statutory registers and other related records of the Company, we are of the opinion that the affairs of the Company have not been conducted in a manner prejudicial to the interests of the members of the Company or public interest as per Section 232 of the Companies Act, 2013." 7. The Principle Commissioner of Income Tax, Bengaluru vide letters dated 09.02.2021 & 19.04.2021, File Nos. NCLT/Edreams Edusoft/Pr. CIT-2/2020-21 & NCLT/Report/Pr. CIT-2/2021-22, inter alia, stated that the Assessee M/s. Edreams Edusoft Private Limited with PAN AACCE4849E has no outstanding Demand and no pending scrutiny as per AO work list. 8. Heard Shri. Saji. P. John, Learned Counsel for the Petitioner Company and Shri Hemanth Rao, learned Counsel for the ROC and RD, through Vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant provisions of Companies Act and to make them to comply all terms and conditions as mentioned in the proposed Scheme in question, and other consequential actions, after sanction of the Scheme. 12. By perusal of Scheme in question, we are of considered opinion that the Scheme in question is a comprehensive one, complying with the provisions of Sections 230 to 232 of the Companies Act, 2013 and the Rules made thereunder and the Petition/Application is filed in accordance with law. It covers all the issues relating to legal proceedings, continuation of contracts, deeds, therefore, the Scheme in question is prima facie eligible to be sanctioned, however, subject to compliance of various undertakings as mentioned in the Scheme and to follow/comply with various observations made by the Statutory Authorities as detailed supra. It also appears to be fair, reasonable and it is not detrimental against the Members or Creditors or contrary to public policy. Therefore, we are inclined to sanction the scheme, however, subject to complying with various conditions/undertakings, post sanctioning the Scheme. 13. In view of the above facts and circumstances of the case, C.P. (CAA) No. 48/BB/2020 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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