2021 (8) TMI 540 - Tri - Companies Law

Approval Granted for Companies' Amalgamation Scheme

The Tribunal sanctioned the proposed Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013, filed by ACME Cleantech Infraventure ... Scheme of Amalgamation - dispensation from convening meetings of shareholders and creditors - convening of meetings by video conferencing - quorum for meetings of unsecured creditors - adjournment and deeming of quorum where quorum deficient - voting through electronic means - appointment of Chairperson, Alternate Chairperson and Scrutinizer and payment of their fees - publication and dispatch of notices, explanatory statement and circulation of financial statements - notice to Central Government, Registrar of Companies, Official Liquidator and Income tax authorities under section 230(5) of the Companies Act, 2013 read with Rule 8 - statutory auditor's certificate and conformity of accounting treatment with applicable Accounting StandardsDispensation from convening meetings of shareholders and creditors - Dispensation granted from convening meetings of equity shareholders (all three Applicant Companies), preference shareholder (Applicant Company No. III) and unsecured creditors (Applicant Company No. II) as per the consents filed. - HELD THAT: - The Tribunal, after perusal of the consent affidavits of the respective equity and preference shareholders and of the unsecured creditors of Applicant Company No. II placed on record, dispensed with calling the meetings of those classes where unanimous consents were filed. The order records that where no secured creditors exist, no meetings of secured creditors need be convened. The dispensation is granted subject to compliance with other statutory requirements and filings. [Paras 21, 22, 23, 24, 32]Meetings dispensed with as to the specified classes where consents are on record; no meetings for secured creditors where none exist.Convening of meetings by video conferencing - quorum for meetings of unsecured creditors - adjournment and deeming of quorum where quorum deficient - voting through electronic means - publication and dispatch of notices, explanatory statement and circulation of financial statements - Directions issued for convening meetings of unsecured creditors of Applicant/Transferor Company 1 and Transferee Company by video conferencing, including quorum, adjournment procedure, voting, notice, publication and circulation of financial statements. - HELD THAT: - The Tribunal fixed the meetings of unsecured creditors of Transferor Company 1 and Transferee Company to be held by video conferencing on the specified date and times, subject to issuance of notices. The quorum for each meeting was specified (numerical quorum and 40% of value) and the meetings are to be adjourned by 30 minutes if the required quorum is not present, after which those present shall constitute the quorum. Voting was permitted through electronic means in accordance with the Act, Rules and applicable Ministry of Corporate Affairs guidelines. The companies were directed to send individual notices in the prescribed form together with the Scheme, explanatory statement and required documents, to publish advertisements in the specified newspapers, make the Scheme available free of charge on requisition and circulate audited balance sheet and supplementary accounting statement as required by law. The Chairperson is to report the results in Form CAA 4 within seven days of the meeting. [Paras 32, 33]Meetings of unsecured creditors of Applicant/Transferor Company 1 and Transferee Company to be convened by VC with specified quorum, adjournment, electronic voting, notice, publication and circulation requirements; results to be reported in Form CAA 4.Appointment of Chairperson, Alternate Chairperson and Scrutinizer and payment of their fees - Appointment of Chairperson, Alternate Chairperson and Scrutinizer for the creditor meetings and direction that their fees and expenses be borne by Applicant Companies I and III. - HELD THAT: - The Tribunal appointed named persons as Chairperson, Alternate Chairperson and Scrutinizer for the meetings and fixed their remuneration. It further directed that their fees, travelling and out of pocket expenses shall be borne by Applicant Company No. I and Applicant Company No. III, and directed supply of the order to them. [Paras 32]Chairperson, Alternate Chairperson and Scrutinizer appointed with specified fees and expenses to be borne by Applicant Company No. I and Applicant Company No. III.Notice to Central Government, Registrar of Companies, Official Liquidator and Income tax authorities under section 230(5) of the Companies Act, 2013 read with Rule 8 - Direction to send statutory notices in Form CAA 3 with the Scheme and explanatory statement to the Central Government (Regional Director), Registrar of Companies, Income tax Department and Official Liquidator, with 30 day period for representations. - HELD THAT: - Pursuant to sub section (5) of Section 230 and Rule 8 of the Rules, the Tribunal directed the companies to send notices in Form CAA 3 along with the Scheme, explanatory statement and disclosures in Rule 6 to the specified authorities. It recorded that any representations must be sent to the Tribunal within 30 days of receipt and copies simultaneously to the companies, failing which absence of objection will be presumed. [Paras 33]Statutory notices in Form CAA 3 to be sent to the prescribed authorities and representations, if any, to be filed within 30 days.Statutory auditor's certificate and conformity of accounting treatment with applicable Accounting Standards - Statutory auditors' certificates certifying that the accounting treatment in the Scheme conforms with applicable Accounting Standards were placed on record and noted by the Tribunal. - HELD THAT: - The Tribunal recorded the filing of auditor certificates for the Applicant Companies stating that the accounting treatment proposed in the Scheme is in conformity with the applicable Accounting Standards under Section 133 of the Companies Act, 2013 read with relevant rules. This factual and compliance filing formed part of the papers on which directions were issued. [Paras 30]Auditors' certificates regarding accounting treatment conformity accepted and noted for the purposes of issuing directions.Final Conclusion: The Tribunal granted first motion relief by dispensing with certain class meetings where unanimous consents were on record, directed convening of specified unsecured creditor meetings by video conferencing with detailed procedural safeguards (quorum, adjournment, electronic voting, notice, publication and circulation of financials), appointed meeting officials with fees and expense directions, and ordered statutory notices to regulatory authorities; the First Motion Petition is disposed of subject to strict compliance with the directions and applicable law. Issues Involved:1. Sanctioning of the proposed Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013.2. Approval and consent of shareholders and creditors.3. Directions for convening meetings of shareholders and creditors.4. Dispensation of meetings for certain shareholders and creditors.5. Issue of notices to regulatory authorities.Detailed Analysis:1. Sanctioning of the Proposed Scheme of Amalgamation:The Applicant Companies, ACME Cleantech Infraventure Limited (Transferor Company 1), ACME Panipat Solar Power Private Limited (Transferor Company 2), and ACME Cleantech Solutions Private Limited (Transferee Company), filed a Joint First Motion Application under Sections 230 to 232 of the Companies Act, 2013, for sanctioning the proposed Scheme of Amalgamation. The Scheme aims to consolidate business activities under one entity, resulting in operational and administrative efficiencies, economies of scale, and greater value for shareholders and stakeholders.2. Approval and Consent of Shareholders and Creditors:The Board of Directors of the Applicant Companies unanimously approved the Scheme on 19.02.2021. The equity shareholders of Transferor Company 1 and Transferor Company 2, as well as the equity and preference shareholders of the Transferee Company, provided their consents via affidavits, waiving the requirement for convening meetings. The Applicant Companies also provided certificates from M/s Tekriwal & Associates, Chartered Accountants, confirming the lists of shareholders and creditors.3. Directions for Convening Meetings of Shareholders and Creditors:The Tribunal directed the convening of meetings for unsecured creditors of Transferor Company 1 and the Transferee Company on 18.09.2021 via video conferencing. The quorum for these meetings was set at 4 in number and 40% of the value of unsecured creditors for Transferor Company 1, and 520 in number and 40% of the value of unsecured creditors for the Transferee Company. If the required quorum is not present, the meetings will be adjourned by 30 minutes, and the persons present will constitute the quorum.4. Dispensation of Meetings for Certain Shareholders and Creditors:Meetings of equity shareholders of Transferor Company 1 and Transferor Company 2, and equity and preference shareholders of the Transferee Company were dispensed with, as their consents were obtained. Meetings of unsecured creditors of Transferor Company 2 were also dispensed with, as their consents were obtained. There were no secured creditors for Transferor Company 1 and Transferor Company 2, and the secured creditor of the Transferee Company had been paid off.5. Issue of Notices to Regulatory Authorities:The Tribunal directed the Applicant Companies to send notices in Form No. CAA 3, along with a copy of the Scheme, the Explanatory Statement, and disclosures mentioned in Rule 6 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, to the Central Government through the Regional Director (Northern Region), Ministry of Corporate Affairs, Jurisdictional Registrar of Companies, Income Tax Department, and Official Liquidator. Representations, if any, must be sent to the Tribunal within 30 days from the date of receipt of such notice.Conclusion:The Tribunal issued comprehensive directions for convening and holding meetings of unsecured creditors, dispensed with certain meetings of shareholders and creditors, and directed the issuance of notices to regulatory authorities. The rationale for the Scheme was to enable consolidation of business activities, resulting in operational efficiencies and greater value for stakeholders. The First Motion Petition was disposed of with the specified directions.