2018 (4) TMI 1877 - Tri - Companies Law

Approval of Real Estate Amalgamation Scheme by Tribunal under Companies Act, 2013

The National Company Law Tribunal, Mumbai Bench, approved the Scheme of Amalgamation between a Transferor Company and a Transferee Company engaged in real ... Scheme of Amalgamation - sanction under Sections 230 to 232 of the Companies Act, 2013 - Appointed Date - fair and reasonable and not contrary to public interest - acceptance of undertakings and compliance with applicable Accounting Standards - filing of order and Scheme with Registrar of Companies by e-Form INC-28 - lodging order and Scheme for stamp duty adjudication - payment of costs to the Regional DirectorScheme of Amalgamation - sanction under Sections 230 to 232 of the Companies Act, 2013 - fair and reasonable and not contrary to public interest - Sanction of the Scheme of Amalgamation between Godrej Real Estate Private Limited (Transferor) and Godrej Properties Limited (Transferee). - HELD THAT: - The Tribunal considered the Petition under Sections 230 to 232 of the Companies Act, 2013 and the material on record, including that no objector appeared to oppose the Scheme. The Scheme, as presented, was found to be fair and reasonable and not contrary to public interest. The Tribunal noted that the entire issued, subscribed and paid-up share capital of the Transferor was held by the Transferee and that no shares of the Transferee would be allotted on amalgamation. Having regard to the filings, reports and undertakings accepted by the Tribunal, the petition was made absolute and the Scheme sanctioned in terms prayed. [Paras 2, 4, 15, 18, 19]Company Scheme Petition No. 89 of 2018 is made absolute and the Scheme of Amalgamation is sanctioned.Appointed Date - Fixation of the Appointed Date for the Scheme. - HELD THAT: - The Scheme as approved by the boards of the companies specified the Appointed Date as 1st April, 2017. The Tribunal recorded that the Scheme is made absolute in terms of the petition and fixed the Appointed Date accordingly. [Paras 4, 19]Appointed Date fixed as 1st April, 2017.Acceptance of undertakings and compliance with applicable Accounting Standards - service of notices under section 230(5) - Acceptance of clarifications and undertakings given by the Petitioner Companies in response to the Regional Director's report. - HELD THAT: - The Regional Director's report raised matters concerning service of notices under section 230(5), compliance with accounting standards (AS-14/IND AS-103 and other applicable standards), production of minutes of order for admission, confirmation that the Scheme versions are identical, and filing of annual returns and financial statements for the year ended 31.03.2017. The Petitioners filed affidavits of service, undertook to comply with the accounting standards, to submit the minutes of admission, confirmed there was no discrepancy between schemes, and undertook to file the requisite financial statements by the stated due date. The Tribunal accepted these clarifications and undertakings. [Paras 10, 11, 12, 13, 14]Clarifications and undertakings in response to the Regional Director's observations are accepted by the Tribunal.Official Liquidator's report - acceptance of Chartered Accountant's report regarding conduct of affairs - Consideration of the Official Liquidator's report and acceptance of the Transferor Company's explanations concerning observations raised. - HELD THAT: - The Official Liquidator's report noted that affairs of the Transferor Company were conducted properly except for certain observations; the Chartered Accountant's report appended to that enquiry stated that acts and transactions were within the objects of the Memorandum and not prejudicial to members or public interest. The Transferor Company explained that related transactions (apportionment of expenses) were at arm's length and relied on the Chartered Accountant's conclusion. The Tribunal accepted these explanations and the extract of the Chartered Accountant's report, treating the matters as addressed. [Paras 16, 17, 18]Observations of the Official Liquidator and the Chartered Accountant's findings are noted and the Transferor Company's explanations are accepted.Filing of order and Scheme with Registrar of Companies by e-Form INC-28 - lodging order and Scheme for stamp duty adjudication - payment of costs to the Regional Director - Directions as to post-sanction compliance, stamping and payment of costs. - HELD THAT: - The Tribunal directed the Petitioner Companies to file a certified copy of the order with the Registrar of Companies electronically using e-Form INC-28 and to lodge the certified order and Scheme with the Superintendent of Stamps for adjudication within specified timelines. Additionally, each Petitioner Company was directed to pay costs to the Regional Director within four weeks from receipt of the certified copy of the order. Authorities were directed to act on the certified copies. [Paras 20, 21, 22, 23]Petitioner Companies to file certified copies with ROC by e-Form INC-28, lodge for stamp duty adjudication, pay costs to the Regional Director, and serve certified copies to concerned authorities as directed.Final Conclusion: The Tribunal sanctioned the Scheme of Amalgamation between Godrej Real Estate Private Limited and Godrej Properties Limited as fair and not contrary to public interest, fixed the Appointed Date as 1st April, 2017, accepted the Petitioners' clarifications and undertakings vis-a -vis the Regional Director and Official Liquidator's observations, and directed the usual post-sanction filings, stamp duty lodgement and payment of costs to the Regional Director. Issues:1. Sanction of Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013.2. Compliance with statutory requirements and directions of the Tribunal.3. Observations and reports by the Regional Director and Official Liquidator.4. Fairness, reasonableness, and compliance of the Scheme.5. Filing of necessary documents and payment of costs.Analysis:Issue 1: The Tribunal was approached for the sanction of a Scheme of Amalgamation between a Transferor Company and a Transferee Company engaged in real estate development, seeking approval under Sections 230 to 232 of the Companies Act, 2013.Issue 2: The Petitioner Companies had complied with the Tribunal's directions and statutory requirements, serving notices to relevant regulatory authorities and filing necessary Affidavits of compliance. Undertakings were given to address any issues arising from the Scheme in accordance with the law.Issue 3: The Regional Director's report highlighted certain observations, including the need for compliance with accounting standards, submission of required documents, and filing of financial statements. The Petitioner Companies provided clarifications and undertakings to address these observations.Issue 4: The Official Liquidator's report raised concerns regarding the conduct of the Transferor Company's affairs, which were addressed by confirming the arm's length basis of transactions and providing relevant extracts from the Chartered Accountant's report to demonstrate compliance with the Companies Act, 2013.Issue 5: The Tribunal found the Scheme to be fair, reasonable, and not contrary to public interest, leading to the approval of the Company Scheme Petition and fixing the Appointed date. Directions were given for filing necessary documents with the Registrar of Companies, payment of costs, and compliance with stamp duty requirements.This comprehensive analysis covers the key legal aspects and procedural steps involved in the judgment delivered by the National Company Law Tribunal, Mumbai Bench, regarding the Scheme of Amalgamation between the two real estate companies.