2021 (12) TMI 1438 - Tri - Companies Law

Approval of Amalgamation Scheme under Companies Act, 2013

ERP Infrastructures Projects Private Limited Versus New Age Buildtech Private Limited

The Scheme of Amalgamation between ERP Infrastructures Projects Private Limited and New Age Buildtech Private Limited was sanctioned under Sections 230 to ... Sanction of Scheme of Amalgamation - Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 - HELD THAT:- From the material on record, the Scheme appears to be fair and reasonable and does not violate of any provisions of law and is not contrary to public policy. Since all the requisite statutory compliances have been fulfilled, the CP(CAA) No.171/MB-V/2021 is made absolute in terms of prayer made in the Company Scheme Petition - Scheme is hereby sanctioned with the Appointed Date of 1st April 2021. Application disposed off. Issues Involved:1. Compliance with Sections 230 to 232 of the Companies Act, 2013.2. Rationale and benefits of the Scheme of Amalgamation.3. Approval and compliance of the Scheme by the Petitioner Companies.4. Observations and compliance with the Regional Director's report.5. Compliance with the provisions of the Income Tax Act, 1961.6. Effectiveness and implementation of the Scheme.Issue-wise Detailed Analysis:1. Compliance with Sections 230 to 232 of the Companies Act, 2013:The Tribunal was convened by videoconference, and no objections were raised against the petition. The sanction of the Tribunal was sought under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013, for the Scheme of Amalgamation of ERP Infrastructures Projects Private Limited (Transferor Company) with New Age Buildtech Private Limited (Transferee Company) and their respective shareholders.2. Rationale and Benefits of the Scheme of Amalgamation:The Counsel for the Petitioner Companies submitted that both companies are engaged in similar business activities, and the amalgamation would enable pooling of resources, elimination of duplicate work, reduction in overheads, better utilization of resources, and enhancement of overall business efficiency. The Scheme would also help in combining managerial and operational strengths, building a wider capital base, and promoting overall business growth.3. Approval and Compliance of the Scheme by the Petitioner Companies:The Petitioner Companies approved the Scheme through their respective Board Resolutions dated August 11, 2021, and approached the Tribunal for sanction. The petition was filed in consonance with sections 230 to 232 of the Act, and the companies complied with all the requirements as per the Tribunal's directions. The shares of the Petitioner Companies are not listed on any stock exchanges.4. Observations and Compliance with the Regional Director's Report:The Regional Director filed a report with observations that were addressed by the Petitioner Companies through necessary clarifications and undertakings. The Tribunal accepted these clarifications and undertakings. Key observations included compliance with accounting standards, affirmation of the appointed date, compliance with Section 232(3)(i) of the Companies Act, 2013, approval by requisite majority of members and creditors, treatment of capital reserve, compliance with the Income Tax Act, and non-applicability of RERA provisions.5. Compliance with the Provisions of the Income Tax Act, 1961:The Petitioner Companies undertook to ensure compliance with all provisions of the Income Tax Act, 1961, read with Income Tax Rules, 1962, pursuant to the Scheme.6. Effectiveness and Implementation of the Scheme:The Tribunal found the Scheme to be fair, reasonable, and not in violation of any law or public policy. Upon the Scheme's effect, the Transferee Company would issue and allot fully paid-up shares to the members of the Transferor Company in the proportion of 1:1. The Scheme was sanctioned with the appointed date of April 1, 2021. The Petitioner Companies were directed to file copies of the Order and Scheme with the Registrar of Companies within 30 days, and the Scheme would become effective upon such filing. The Transferee Company was also directed to lodge a copy of the Order with the Superintendent of Stamps for adjudication of stamp duty within 60 days.Conclusion:The CP(CAA) No.171/MB-V/2021 was made absolute in terms of the prayer made in the Company Scheme Petition. The Scheme was sanctioned, and all concerned regulatory authorities were directed to act on the certified copy of the Order along with the Scheme. The Tribunal provided liberty for any person or concerned authorities to approach it for further directions or clarifications if necessary. The Order was accordingly passed.