2021 (4) TMI 631 - Tri - Companies Law

Tribunal Approves Composite Scheme of Arrangement for Demerger and Amalgamation

The Tribunal sanctioned a Composite Scheme of Arrangement under Sections 230-232 of the Companies Act, 2013, involving the demerger and amalgamation of ... Approval of scheme of arrangement - Sections 230-232 of the Companies Act, 2013 - HELD THAT:- Considering the entire facts and circumstances of the case and on perusal of the Scheme, the documents produced on record, the representation made by the Regional Director, Registrar of Companies, Official Liquidator and Income Tax Authority and the reply thereof by the petitioner companies, this Tribunal is of the opinion that the requirements of the provisions of Sections 230 and 232 of the Companies Act, 2013 are satisfied. The reply given by the petitioner companies to the representation of the Regional Director, Registrar of Companies, Official Liquidator and Income Tax Authorities satisfies the observations of the Regional Director, Registrar of Companies, Official Liquidator and Income Tax Authorities. The Scheme appears to be genuine and bona fide and in the interest of the shareholders and creditors. The scheme of arrangement sanctioned - Application allowed. Issues Involved:1. Sanction of Composite Scheme of Arrangement under Sections 230-232 of the Companies Act, 2013.2. Dispensation and convening of meetings of shareholders and creditors.3. Compliance with statutory requirements and observations from authorities.4. Payment of legal fees and expenses.Detailed Analysis:1. Sanction of Composite Scheme of Arrangement:The petition was filed under Sections 230-232 of the Companies Act, 2013, seeking sanction of a Composite Scheme of Arrangement. This scheme included the demerger of the Digital Cable TV Business Undertaking of several companies and their amalgamation with GTPL Hathway Limited on a going concern basis. Additionally, it involved the amalgamation of GTPL City Channel Private Limited and GTPL Shivshakti Network Private Limited with GTPL Hathway Limited on a going concern basis.2. Dispensation and Convening of Meetings:The petitioners sought dispensation of meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors for various petitioner companies. The Tribunal's order dated 13.11.2020 dispensed with these meetings for certain companies and directed the holding and convening of meetings for others. The meetings were held through video conferencing, and reports were filed by the Chairperson of the meetings. The approval of the scheme was obtained with the requisite majority from the unsecured creditors.3. Compliance with Statutory Requirements and Observations from Authorities:- Regional Director's Observations: The Regional Director made several observations, including compliance with Section 232(3)(i) of the Act, consolidation of authorized capital, compliance with Section 2(19AA) of the Income Tax Act, and disclosure of assets and liabilities. The petitioner companies provided undertakings and responses to address these observations, citing precedents from the Hon'ble Gujarat High Court and the Tribunal.- Official Liquidator's Observations: The Official Liquidator made observations regarding the dissolution of Transferor Companies without winding up, preservation of books and records, statutory compliance, and payment of fees. The petitioner companies undertook to comply with these requirements.- Income Tax Authority's Observation: The Income Tax Authority noted an outstanding debt of Rs. 10,87,09,230/- of GTPL Hathway Limited. The petitioners stated that the tax liability would be dealt with as per the Income Tax Act, 1961.- No Other Representations: No other representations were received from statutory authorities.4. Payment of Legal Fees and Expenses:The Tribunal quantified the legal fees/expenses of the Regional Director at Rs. 50,000/- and the Official Liquidator at Rs. 20,000/-. These fees were to be paid by Petitioner Company 1.Judgment:The Tribunal, after considering the entire facts and circumstances, the Scheme, and the representations and replies, concluded that the requirements of Sections 230 and 232 of the Companies Act, 2013 were satisfied. The Scheme was deemed genuine, bona fide, and in the interest of shareholders and creditors. The petition was allowed, and the Scheme of Arrangement was sanctioned, binding the petitioner companies and their respective shareholders and creditors. The Tribunal directed the petitioner companies to file a copy of the order and the Scheme with the concerned Registrar of Companies and to pay the quantified legal fees.Conclusion:The Company Petition was disposed of with the sanction of the Composite Scheme of Arrangement, compliance with statutory requirements, and payment of legal fees and expenses.