Tribunal approves amalgamation scheme under Companies Act, 2013

The Tribunal granted sanction to the scheme of amalgamation under sections 230 to 232 of the Companies Act, 2013. The transferor company would be dissolved without winding up, and its assets, rights, and liabilities would be transferred to the transferee company. Compliance with statutory requirements was mandated, and the companies were not exempted from tax obligations. The petitioners were instructed to provide a certified copy of the order to the Registrar of Companies for registration, concluding the matter.

---

---

Issues Involved:
1. Approval of the scheme of amalgamation under sections 230 to 232 of the Companies Act, 2013.
2. Compliance with procedural requirements for the amalgamation.
3. Objections raised by the Regional Director.
4. Objections raised by the Official Liquidator.
5. Objections raised by the Income-tax Department.
6. Compliance with statutory and regulatory requirements.
7. Protection of public interest and prevention of tax evasion.

Issue-wise Detailed Analysis:

1. Approval of the Scheme of Amalgamation:
The petitioner-companies filed a joint application under sections 230 to 232 of the Companies Act, 2013, seeking approval for the scheme of amalgamation of the transferor company into the transferee company. The scheme was placed on record, and the procedural requirements, including publication of notices and serving notices to relevant authorities, were complied with.

2. Compliance with Procedural Requirements:
The petitioners filed affidavits confirming compliance with the Tribunal's directions for publication in newspapers and serving notices to relevant authorities. No objections were received against the scheme from the shareholders, secured creditors, or unsecured creditors of both companies.

3. Objections Raised by the Regional Director:
The Regional Director submitted that the authorized capital of the transferor company should be added to that of the transferee company, and the petitioner-companies should furnish a verified statement regarding fee payables. The petitioners undertook to pay the fees to the Registrar of Companies for the addition of the authorized share capital. Additionally, the Regional Director raised concerns about fractional shares and disputed statutory dues, which the petitioners addressed by stating that fractional shares would be settled in cash and disputed dues were pending as per the audit report.

4. Objections Raised by the Official Liquidator:
The Official Liquidator noted that the transferor company had acquired land at Sonepat, which was not reflected in the balance sheet from 2014 onwards due to a forfeited advance. The petitioners explained that the land's value was reduced to nil due to the forfeiture, and the applicability of income tax and stamp duty would be addressed by the relevant authorities. The Official Liquidator did not raise any other material objections and confirmed that the affairs of the transferor company were not conducted prejudicially.

5. Objections Raised by the Income-tax Department:
The Income-tax Department raised concerns that the scheme might be designed to avoid taxes, as the transferor company had significant losses that could be adjusted against the transferee company's income. The petitioners responded that any liabilities would be paid by the transferee company as per the Income-tax Act, 1961, and the scheme's approval would not affect tax treatments. The Tribunal clarified that the scheme should not be used to evade taxes and the Income-tax Department could proceed against the transferee company if tax evasion occurred.

6. Compliance with Statutory and Regulatory Requirements:
The petitioners affirmed that no proceedings under sections 206 to 229 or Chapter XIV of the Companies Act, 2013, were pending against them. Certificates from statutory auditors confirmed that the scheme's accounting treatment conformed with the Accounting Standards. The share exchange ratio was provided, and the valuation report was placed on record.

7. Protection of Public Interest and Prevention of Tax Evasion:
The Tribunal emphasized that the scheme should not be a device to evade law or promote tax evasion. The scheme's approval would not exempt the companies from paying stamp duty, taxes, or other charges. The Tribunal retained the power to take action if any violation of law was found.

Judgment:
The Tribunal granted sanction to the scheme under sections 230 to 232 of the Companies Act, 2013, subject to compliance with statutory requirements. The transferor company would be dissolved without winding up, and all its property, rights, and liabilities would be transferred to the transferee company. The order did not exempt the companies from paying applicable taxes and charges. The petitioners were directed to deliver a certified copy of the order to the Registrar of Companies for registration. The petition was disposed of accordingly.

---