2020 (12) TMI 37 - Tri - Companies Law

Approval of Amalgamation Scheme under Companies Act, 2013 for Companies A, B, and C

The Tribunal approved the Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013, involving Transferor Companies A and B with ... Scheme of Amalgamation - sanction under Sections 230 to 232 of the Companies Act, 2013 - appointed date - compliance with Regional Director's observations - report of the Official Liquidator - filing with Registrar of Companies (E-Form INC-28) - publication and disclosure to stakeholders - lodging order for adjudication of stamp duty - payment of costs to statutory authoritiesScheme of Amalgamation - sanction under Sections 230 to 232 of the Companies Act, 2013 - Sanction of the Scheme of Amalgamation between the two Transferor Companies and the Transferee Company - HELD THAT: - The Tribunal considered the petitions, the material on record, the absence of any objector and the statutory compliance asserted by the petitioners. The Tribunal recorded that the Scheme appears fair and reasonable, not violative of law and not contrary to public policy. Having accepted the explanations and undertakings furnished and noting that requisite statutory compliances have been fulfilled, the Tribunal made the consolidated Company Scheme Petition absolute in terms of clauses (a) to (c). [Paras 4, 6, 19, 21, 22]The Scheme of Amalgamation is sanctioned and the Company Scheme Petition is made absolute.Compliance with Regional Director's observations - undertakings by petitioners - Acceptance of clarifications and undertakings given by the petitioners in respect of the Regional Director's report - HELD THAT: - The Regional Director raised observations regarding accounting entries and compliance with appointment and effective date formalities, approvals by requisite majorities, set-off of fees paid on authorised capital, filing consistency of the scheme, notices to authorities, alteration of objects and related ROC filings, and protection of creditors' interests. The petitioners furnished explanations and undertakings addressing each observation (paras 10-18). The Tribunal accepted those clarifications and undertakings and recorded compliance with the material requirements. [Paras 15, 16, 17, 18, 19]The Tribunal accepted the petitioners' clarifications and undertakings in respect of the Regional Director's report and treated the observations as addressed.Report of the Official Liquidator - dissolution of transferor companies - Finding on conduct of affairs of the Transferor Companies and order for dissolution - HELD THAT: - The Official Liquidator reported that the affairs of the Transferor Companies were conducted properly and not prejudicial to shareholders, recommending that the Transferor Companies may be ordered to be dissolved. The Tribunal, having considered the Official Liquidator's report and other material, proceeded to sanction the Scheme which contemplates dissolution of the Transferor Companies consequent to amalgamation. [Paras 20, 22]The Tribunal recorded the Official Liquidator's favourable report and, consequent to sanctioning the Scheme, ordered dissolution of the Transferor Companies as envisaged by the Scheme.Appointed date - Fixation of the Appointed Date for the Scheme - HELD THAT: - The petitioners stated that the Appointed Date is the opening hours of business on 1st April, 2019 and the Scheme would be effective from that date. The Tribunal considered the point raised by the Regional Director about the requirement that the scheme indicate an appointed date and accepted the petitioners' assertion. [Paras 11, 28]The Appointed Date for the Scheme is fixed as 1st April, 2019.Filing with Registrar of Companies (E-Form INC-28) - publication and disclosure to stakeholders - lodging order for adjudication of stamp duty - payment of costs to statutory authorities - Ancillary directions consequent to sanction: statutory filings, publication, stamp duty adjudication and payment of costs - HELD THAT: - Upon sanctioning the Scheme, the Tribunal directed compliance with consequential procedural steps: filing a copy of the Order and the Scheme with the ROC electronically via E-Form INC-28 and in physical form within 30 days; publication of the approval in the same newspapers previously used and hosting the Order on petitioners' websites for disclosure; lodging a certified copy with the Superintendent of Stamps for adjudication of stamp duty within 60 days; and payment of specified costs to the Regional Director and the Official Liquidator within four weeks. The Tribunal also directed that authorities act on authenticated copies of the Order. [Paras 23, 24, 25, 26, 27]The petitioners are directed to effect the enumerated filings, publications, lodging for stamp duty adjudication and to pay the costs as ordered.Final Conclusion: The National Company Law Tribunal, Mumbai Bench, after considering the petitions, the Regional Director's report, the Official Liquidator's report and the petitioners' undertakings, sanctioned the Scheme of Amalgamation, fixed the Appointed Date as 1st April, 2019, accepted the clarifications and undertakings given, ordered dissolution of the Transferor Companies in terms of the Scheme, and directed the petitioners to complete consequential filings, publications, stamp duty lodgement and payment of costs. Issues Involved:1. Approval and compliance with the Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013.2. Observations and compliance requirements raised by the Regional Director.3. Confirmation of the appointed date and effectiveness of the Scheme.4. Compliance with statutory requirements and filing obligations post-approval.Issue-wise Detailed Analysis:1. Approval and Compliance with the Scheme of Amalgamation:The Tribunal convened via videoconference and heard the Learned Counsel for the Petitioner Companies. No objections were raised against the Scheme. The Petitioner Companies sought the Tribunal's sanction for the Scheme of Amalgamation involving Aroma Chemical Agencies (India) Private Limited and Alchemie Agencies Private Limited as Transferor Companies with IMCD India Private Limited as the Transferee Company. The Scheme was approved by the Board Resolutions dated 21st June 2019 and filed in accordance with the Tribunal's previous orders. The Companies complied with all the requirements and filed necessary affidavits of compliance.2. Observations and Compliance Requirements Raised by the Regional Director:The Regional Director's report dated 24th August 2020 highlighted several observations:- Compliance with AS-14 and other applicable Accounting Standards.- Clarification on the 'Appointed Date' and 'Effective Date' as per Section 232(6) of the Companies Act, 2013.- The Scheme's approval by the requisite majority of members and creditors.- Setting off fees paid by the Transferor Companies against fees payable by the Transferee Company as per Section 232(3)(i).- Affidavit confirming no discrepancies between the Scheme enclosed to the Company Application and Petition.- Notices to concerned authorities and their binding decisions.- Compliance with Section 13 for changes in the Object Clause of the Transferee Company.- Protection of creditors' interests.The Petitioner Companies provided explanations and undertakings addressing these observations, which were accepted by the Tribunal.3. Confirmation of the Appointed Date and Effectiveness of the Scheme:The Appointed Date for the Scheme was fixed as 1st April 2019. The Scheme was deemed effective from this date, ensuring compliance with Section 232(6) of the Companies Act, 2013.4. Compliance with Statutory Requirements and Filing Obligations Post-Approval:The Tribunal found the Scheme fair, reasonable, and compliant with legal provisions and public policy. The Company Scheme Petition No. 952 of 2020 was made absolute in terms of clauses (a) to (c). The Petitioner Companies were directed to:- File a copy of the Order and Scheme with the Registrar of Companies electronically and physically within 30 days.- Publish the Tribunal's approval in the same newspapers where previous publications were made and host the Order on their websites.- Lodge a copy of the Order with the Superintendent of Stamps for stamp duty adjudication within 60 days.- Pay costs of Rs. 25,000 each to the Regional Director and the Official Liquidator within four weeks.All authorities were instructed to act on the authenticated copy of the Order and Scheme.Conclusion:The Tribunal approved the Scheme of Amalgamation, confirming compliance with all statutory requirements and addressing the observations raised by the Regional Director. The Appointed Date was set as 1st April 2019, and the Petitioner Companies were directed to fulfill post-approval filing and publication obligations.