2020 (10) TMI 701 - Tri - Companies Law

Tribunal approves Amalgamation Scheme under Companies Act, 2013

Swati Commercial Private Limited Versus Vyanktesh Securities Private Limited

The Tribunal sanctioned the Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013, transferring assets, liabilities, rights, and ... Sanction of a Scheme of Amalgamation - section 230 to 232 of the Companies Act, 2013 - HELD THAT:- On perusal of the documents produced on record, it appears that provisions of Section 230-232 of the Companies Act, 2013 are satisfied. This Tribunal finds that in the Scheme of amalgamation the Petitioner Transferor Company's entire business including assets, liabilities, rights, obligation get transferred and get merged with the Petitioner Transferee Company and the Petitioner Transferor Company shall get dissolved without winding up and hence the revenue's interest is duly protected and the apprehension of the Official Liquidator about the revenue's interest shall get adversely affected, is without merits as the liabilities, obligations if any of the Petitioner Transferor Company does not get diluted even remotely and become the liabilities and obligations of the Petitioner Transferee Company and further this Tribunal directs that Petitioner Companies shall co-operate with the authorities in the pending proceedings and shall undertake to discharge the liabilities, obligations if any arises and accrues in future upon crystallization of the liabilities and / or obligations. Thus, this Tribunal sanctions the Scheme and allows the prayer and the Scheme is hereby sanctioned and shall be binding on respective shareholders and creditors. Petition allowed. Issues Involved:1. Sanction of the Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013.2. Dispensation of meetings of Equity Shareholders.3. Compliance with statutory notices and responses from authorities.4. Queries and objections raised by the Official Liquidator.5. Queries and objections raised by the Regional Director.6. Preservation of books and compliance with statutory liabilities.Issue-wise Detailed Analysis:1. Sanction of the Scheme of Amalgamation:The Petitioner Companies filed a joint petition under Sections 230 to 232 of the Companies Act, 2013, seeking the sanction of a Scheme of Amalgamation. The Scheme involves the transfer of all assets, liabilities, rights, and obligations from Swati Commercial Private Limited (Transferor Company) to Vyanktesh Securities Pvt. Limited (Transferee Company). The Tribunal found that the provisions of Section 230-232 were satisfied, and the Scheme was sanctioned, resulting in the dissolution of the Transferor Company without winding up. The Tribunal emphasized that the liabilities and obligations of the Transferor Company would not be diluted and would become the responsibilities of the Transferee Company.2. Dispensation of Meetings of Equity Shareholders:The Petitioner Companies sought the dispensation of meetings of Equity Shareholders, stating that they had no creditors, either secured or unsecured. The Tribunal dispensed with the meetings based on consent affidavits from the Equity Shareholders and directed the Companies to send a common notice in Form No. CAA. 3 to various statutory authorities.3. Compliance with Statutory Notices and Responses from Authorities:The Petitioner Companies served notices to statutory authorities, including the Central Government, Registrar of Companies, Income Tax Authorities, and the Official Liquidator. The authorities were called to submit their comments and observations on the Scheme. The Regional Director and Official Liquidator filed their representations and reports, respectively. The Tribunal directed the Companies to publish a common notice of hearing in newspapers and issue individual notices to the statutory authorities, calling for objections.4. Queries and Objections Raised by the Official Liquidator:The Official Liquidator raised several queries, including the impact of employee benefits on profits and losses, corporate guarantees, and pending assessment proceedings. The Petitioner Companies responded with detailed explanations, including compliance with AS-15, the status of corporate guarantees, and the handling of pending tax assessments. The Tribunal found that the objections were addressed satisfactorily and that the revenue's interest was protected.5. Queries and Objections Raised by the Regional Director:The Regional Director raised queries regarding the payment of enhanced fees on authorized capital, issuance of shares, filing of annual returns, and service of notices to the Income Tax Department. The Petitioner Companies provided responses, including compliance with relevant provisions, submission of necessary documents, and undertakings to comply with statutory requirements. The Tribunal found the responses satisfactory and noted that there were no complaints against the Scheme.6. Preservation of Books and Compliance with Statutory Liabilities:The Tribunal directed the Transferee Company to preserve the books of accounts, papers, and records of the Transferor Company and not to dispose of them without prior permission from the Central Government. It was made clear that the Transferor Company would not be absolved from any statutory liabilities even after the Scheme's sanction. The Tribunal also quantified the costs to be paid to the Official Liquidator and the Regional Director for legal fees and expenses.Conclusion:The Tribunal sanctioned the Scheme of Amalgamation, making it binding on the respective shareholders and creditors. The Transferor Company was dissolved without winding up, and the Transferee Company was directed to comply with various statutory requirements, including the preservation of records and payment of costs. The Tribunal found that the Scheme protected the revenue's interest and addressed all objections satisfactorily.