2020 (11) TMI 57 - Tri - Companies Law

Tribunal approves merger of multiple companies under Companies Act, 2013

The Tribunal approved the Scheme of Merger under Sections 230-232 of the Companies Act, 2013, involving multiple companies, including Beautifulstone Real ... Approval of Scheme of Merger by Absorption - Sections 230 to 232 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013 and the rules framed there under - HELD THAT:- In response to the observations made by the Regional Director, the Petitioner Companies clarifying as that so far as the observation in paragraph II of the Report of the Regional Director is concerned, the Petitioner Companies submitted that the amalgamation will enable the Transferee Company to consolidate the businesses and lead to synergies in operation and create a stronger financial base and that it would be advantageous to combine the activities and operations of all companies into a single Company for synergistic linkages and the benefit of combined financial resources. This will be reflected in the profitability of the Transferee Company - From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy. Scheme sanctioned. Issues:Approval of Scheme of Merger under Sections 230-232 of Companies Act, 2013Detailed Analysis:The judgment pertains to the approval sought under Sections 230-232 of the Companies Act, 2013 for a Scheme of Merger by Absorption involving multiple companies. The Petitioner Companies, including Beautifulstone Real Estate Private Limited, Bhola Commodeal Private Limited, Gagan Management Consultants Private Limited, Komal Dealtrade Private Limited, Spycade Reality Private Limited, and Snehal Multitrade Private Limited, sought amalgamation with Industrial Basket E-Commerce Private Limited as the Transferee Company. The Petitioner Companies had passed Board Resolutions approving the Scheme on 20th February 2018, in compliance with previous Tribunal orders.The rationale behind the merger was presented by the Learned Counsel, emphasizing the synergies of operations and various benefits such as consolidation of businesses, creation of a stronger financial base, cost savings, and stability of operations. The merger aimed to combine activities and operations into a single company for synergistic linkages and leverage combined assets to build a sustainable business with optimal resource utilization.The Regional Director's Report raised concerns regarding the financial performance of some Transferor Companies, specifically noting negative net worth and lack of revenue in the past years. However, the Petitioner Companies provided clarifications addressing these concerns, which were accepted by the Tribunal. The Official Liquidator also submitted a favorable report, stating that the affairs of the Transferor Companies were conducted properly and not prejudicial to shareholders' interests.Upon review, the Tribunal found the Scheme to be fair, reasonable, compliant with legal provisions, and not against public policy. Consequently, the Tribunal sanctioned the Scheme with an Appointed Date of 31st December 2017, directing the dissolution of Transferor Companies without the process of winding up. The Petitioner Companies were instructed to fulfill statutory compliances, including filing the Order and Scheme with relevant authorities within specified timelines.In conclusion, the Tribunal approved the Scheme of Merger by Absorption, ensuring compliance with legal requirements and directing necessary actions for the implementation of the merger while safeguarding the interests of all parties involved.