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TMI Blog2023 (5) TMI 1423X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. The Bench convened through videoconferencing. 2. Heard Learned Counsel for the Petitioner Companies. No objector has come before the Tribunal to oppose the Company Scheme Petition and nor has any party controverted any averments made in the Company Scheme Petition. 3. The sanction of this Tribunal is sought under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 ("Act") to the Composite Scheme of Amalgamation of Reliance Infratel Limited and Reliance SMSL Limited with Reliance Projects & Property Management Services Limited and their respective shareholders and creditors ("Scheme"). 4. The First Petitioner Company builds, owns and operates telecommunication towers, optic fibre cable and other assets and provide these passive telecommunication infrastructure assets on a shared basis to wireless service providers and other telecommunication service providers under long term contracts. The Second Petitioner Company is engaged in the business of providing integrated manpower solutions including sourcing, recruitment, training, engagement and staffing services to other companies. 5. The registered office of Reliance Projects & Property Management S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Amalgamated Company; and (e) To provide a strong financial structure to all stakeholders of the Amalgamating Companies. The Scheme is in the interest of the Amalgamating Companies, the Amalgamated Company and their respective stakeholders." 7. Learned Counsel for the Petitioner Companies submits that the Company Scheme Petition No. C.P.(CAA)/46/MB/2023 was filed in consonance with the Order dated 9th February 2023 passed by this Tribunal in the Company Scheme Application No. C.A.(CAA)/16/MB/2023 ("said Order"). 8. Learned Counsel for the Petitioner Companies submits that vide the said Order, the Company Scheme Application was admitted and the meetings of the equity shareholders and unsecured creditors of the Petitioner Companies were dispensed with in view of consent affidavits provided by the all the equity shareholders and unsecured creditors representing more than 90% in value of the respective Petitioner Companies. Since the Petitioner Companies did not have any preference shareholders and secured creditors, the question of convening and holding meetings of the secured creditors and preference shareholders of the Petitioner Companies did not arise. 9. Learned Coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompanies have complied with all the requirements as per the directions of this Tribunal. 13. The Petitioner Companies have placed on record an Affidavit dated 16th March 2023, in connection with change in the Appointed Date 1 of the Scheme from 'opening business hours of January 01, 2023 or such other date as may be approved by the Board of the Amalgamating Company 1 and the Amalgamated Company' to 'December 22, 2022'. 14. The Central Government through the Regional Director, Western Region, Ministry of Corporate Affairs ("Regional Director") has filed its report dated April 19, 2023 ("Report") and has presented certain information derived from the records of the case and has prayed for kind consideration and disposal of the case as the Hon'ble Tribunal may deem fit and proper. The observations of the Regional Director and the reply of the Petitioner Companies are set out in tabular format below: Sr. No. of Paragraph 2 Observations in Report filed by the Regional Director Reply of Petitioner Companies a) That on examination of the report of the Registrar of Companies, Mumbai dated 24 March 2023 for Petitioner Companies (Annexed as Annexure A-1) that the Petitioner Companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd March 2022. g. Interest of creditors should be protected. As far as the observation made in Paragraph 2(a)(ii)(a) of the Report of the Regional Director is concerned, the Petitioner Companies state that, the Petitioner Companies have filed Forms MGT-14 with respect to approval of the Scheme with the Registrar of Companies vide SRN AA1254620 (in case of Transferor Company No. 1) and SRN AA1251519 (in case of Transferor Company No. 2) in connection with the Scheme. As far as the observation made in Paragraph 2(a)(ii)(b) of the Report of the Regional Director is concerned, the Petitioner Companies state that, the registered office of Reliance Projects & Property Management Services Limited ("Amalgamated Company" or "RPPMSL") is situated in the State of Gujarat, therefore, the Amalgamated Company has filed Company Petition No. C.P.(CAA)/5(AHM)2023) for seeking approval of the Hon'ble National Company Law Tribunal, Ahmedabad Bench to the Scheme. As far as the observation made in Paragraph 2(a)(ii)(c) of the Report of the Regional Director is concerned, the Petitioner Companies state that, one of vendors of the Transferor Company No. 1, Erics ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of the Transferor Company No. 1 in terms of the Resolution Plan. The Hon'ble Tribunal vide its order dated November 21, 2022 read with order dated December 3, 2022 ("Plan Implementation Orders") passed directions for deposit of monies in the escrow account and implementation of the Resolution Plan. A copy of the Plan Implementation Orders are annexed herewith as Annexure 1. The Hon'ble Tribunal in its Plan Implementation Orders mentioned that the creditors will issue No Dues Certificate upon distribution of monies from the escrow account in accordance with the order of the Hon'ble Supreme Court of India. In accordance with the Plan Implementation Orders, resolution amount was deposited in the escrow account on December 22, 2022 in full and final settlement of all claims in accordance with the Resolution Plan. Upon deposit of the resolution amount in the escrow account, all amounts due to the creditors stood discharged. The Transferor Company No. 1 is in the process of obtaining No Dues Certificate from all the lenders and upon amalgamation, the Amalgamated Company will complete the procedural act of filing requisite forms for removing the charge in due course once th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the provisions of Section 232(3)(i) of the Act to the extent applicable. In compliance of Accounting Standard14 or IND-AS 103, as may be applicable, the transferee company shall pass such accounting entries which are necessary in connection with the scheme to comply with other applicable Accounting Standards including AS-5 or IND AS-8 etc. The Petitioner Companies state that, the Amalgamated Company will pass necessary accounting entries as specified in the Scheme and comply with the accounting principles as prescribed under generally accepted accounting practices in India, provisions of the Act and accounting standards as notified by Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time. d) The Hon'ble Tribunal may kindly direct the Petitioner Companies to file an affidavit to the extent that the Scheme enclosed to the Company Application and Company Petition are one and same and there is no discrepancy, or no changes made. The Petitioner Companies state that, subsequent to filing of the Company Scheme Application with the Hon'ble Tribunal, the Board of Directors of the Petitioner Companies vide the respective resolutions dated March 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... definition of 'Appointed Date 1' means December 22, 2022. The definition of 'Appointed Date 2' means close of business hours of March 31, 2023 or such other date as may be approved by the Board of the Amalgamating Company 2 and the Amalgamated Company. The definition of 'Effective Date' means last of the dates on which the Tribunal approves the Scheme. The Petitioner Companies further state that, the Scheme is in compliance with the requirements of circular no. F. No. 7/12/2019/Cl-1 dated 21.08.2019 issued by the Ministry of Corporate Affairs. g) Scheme. The Petitioner Companies further state that, the Scheme is in compliance with the requirements of circular no. F. No. 7/12/2019/Cl-1 dated 21.08.2019 issued by the Ministry of Corporate Affairs. The Petitioner Companies states that, the Income Tax Authority concerned of the Transferor Company No. 1 and Transferor Company No. 2 have already filed their respective no-objection letters with the Hon'ble Tribunal. A copy of the said no-objection letters issued by the Income Tax Authority concerned is annexed hereto and marked as Annexure 3 Colly. In response to the said letter issued by the Income Tax Authority concerned of the Trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th requirements of provisions of CA, 2013, the Registration Act, 1908 and Stamp Act of the concerned state where lands are situated. The Petitioner Companies state that, the Amalgamated Company undertakes to complete the process of mutation of its immovable properties in the States where its immovable properties are located in accordance with applicable laws. m) In the Transferor Company No. 1 (Reliance Infratel Limited) the inspection under section 206(5) is under process and the same was ordered by the Ministry on 11.05.2022 on basis of reference received from CEIB for financial irregularities and bank default and siphoning of funds. Therefore, it is submitted that the Petitioner Companies, Directors, KMP and any other connected persons may be directed to undertake to comply with notice, order, prosecutions, adjudications which may be taken by the Ministry of Corporate Affairs as per law on submission of inspection report in the matter of subject company. The Petitioner Companies state that, inspection pertains to a period prior to the acquisition of the Transferor Company No. 1 by the Amalgamated Company through the IBC process. The current management of the Transferor Compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charges. 2. With respect to the Audit Qualification the company has replied that the resolution plan have already been implemented on December 22, 2022 and clarified that no other proceeding under IBC is pending against Transferor Company No. 1 before Hon'ble NCLT & NCLAT The aforesaid observation is factual in nature 3. From the reply of company it appears that Regional Director, Western Region, Ministry of Corporate Affairs, Mumbai has initiated Inspection under the provisions of Section 206 of Companies Act, 2013 in respect of Transferor Company No. 1 and the Tribunal may require to explain the company whether it shall impinge upon the approval of proposed scheme of merger of Transferor Companies with Transferee Company. It has further been observed that for the contravention of section 204 of Companies Act, 2013 relating to Secretarial Audit has been served upon the Transferor Company No. 2 to which company has replied and attributed the alleged violation to human error in filing e-form AOC-4 XBRL 2016-17, otherwise the company was in compliance with the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny No. 1 is in the process of responding to the inspection and after the amalgamation of Transferor Company No. 1, the same shall be dealt with by the Amalgamated Company in accordance with the provisions of the Resolution Plan and applicable law and the Amalgamated Company undertakes to co-operate by providing necessary information available with it. 19. The Income Tax Authority concerned of the Petitioner Companies have filed their no objection letters with the Hon'ble Tribunal. The Learned Counsel for the Petitioner Companies submits that, the Petitioner Companies undertake to comply with the directions of the Income Tax Authorities in accordance with applicable law. The First Petitioner Company has also filed an Affidavit dated April 19, 2023, placing on record the no objection letter issued by the Income Tax Authority concerned of the First Petitioner Company. 20. The Goods and Services Tax Authority of the First Petitioner Company vide its letter dated March 17, 2023 has intimated this Tribunal that, there are several tax demands of service tax/ CGST pending against the First Petitioner Company with different authorities as well as claims launched with the Resolution Profes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and is not violative of any provisions of law and is not contrary to public policy. 24. Since all the requisite statutory compliances have been fulfilled, the said Company Scheme Petition is made absolute in terms of the prayer clauses 25 (a) to 25 (f) thereof. 25. The Scheme is hereby sanctioned, with the Appointed Date 1 fixed as December 22, 2022 and the Appointed Date 2 fixed as close of business hours of March 31, 2023. 26. The First Petitioner Company and the Second Petitioner Company be dissolved without winding up. 27. The Petitioner Companies are directed to file a copy of this Order along with a copy of the Scheme with the concerned Registrar of Companies, electronically in E-form INC 28 within 30 (thirty) days from the date of receipt of the certified copy of this Order by the Petitioner Companies. 28. The Petitioner Companies to lodge a copy of this Order along with the Scheme duly authenticated/certified by the Deputy Director or the Assistant Registrar, National Company Law Tribunal, Mumbai Bench, with the concerned Superintendent of Stamps for the purpose of adjudication of stamp duty payable, if any, within 60 (sixty) days from the date of receipt of the certi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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