Tribunal Allows Amendment to Amalgamation Scheme Amid Pandemic Delays

The National Company Law Tribunal, Kochi Bench, allowed two companies to amend their Scheme of Amalgamation with an appointed date of 1st April, 2019, despite delays due to the pandemic. The proposed scheme had consent from Financial Creditors and Equity Shareholders, no pending investigations, and no debt restructuring. Relying on a Ministry of Corporate Affairs circular, the Tribunal permitted the amendments, emphasizing the importance of justifying appointed dates and stakeholder consent in corporate restructuring. The companies were directed to file amended applications within 15 days. This decision showcases a practical approach to addressing delays and ensuring compliance in corporate matters.

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Issues:
1. Amendment of Scheme of Amalgamation and reliefs sought in the application.

Analysis:
The National Company Law Tribunal, Kochi Bench, considered two Company Applications filed by different companies seeking to amend their Scheme of Amalgamation and the reliefs sought in the application. The appointed date for both companies was set as 1st April, 2019, which was significantly antedated due to delays caused by the pandemic situation. The applicants justified the appointed date based on commitments to stakeholders and the need to consolidate business operations. The Financial Creditors and Equity Shareholders had consented to the proposed schemes. The proposed Scheme did not involve restructuring or varying debt obligations, and no investigation proceedings were pending against the companies under the Companies Act, 2013.

In reference to a circular by the Ministry of Corporate Affairs, the Tribunal noted that companies could choose an "appointed date" based on relevant events, allowing them to operate independently until such events materialize. The circular clarified that the appointed date would be deemed as the acquisition date for accounting standards compliance. Considering the applicants' request to amend the applications based on the circular and the reliefs sought therein, the Tribunal granted the reliefs. The applicants were directed to file amended applications within 15 days from the date of the order, issued on 20th September 2021.

This judgment highlights the importance of justifying appointed dates in schemes of amalgamation, compliance with relevant circulars, and the need for stakeholders' consent in such corporate restructuring processes. The Tribunal's decision to allow the amendments based on the clarificatory circular demonstrates a practical approach to addressing delays and ensuring compliance with legal requirements in corporate matters.

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