Tribunal approves Amalgamation Scheme under Companies Act 2013 for Hesel Engineering & Henry and Farad

The Tribunal sanctioned the Scheme of Amalgamation under Sections 230-232 of the Companies Act, 2013, between Hesel Engineering Private Limited (Transferor Company) and Henry and Farad Private Limited (Transferee Company). The scheme was deemed fair, reasonable, and compliant with legal provisions, making it binding on all stakeholders. The Transferor Company will be merged into the Transferee Company, with all assets and liabilities transferred as a going concern. The authorized share capital of the Transferee Company will increase, and eligible shareholders will receive shares in exchange. Compliance with statutory requirements and regulatory authorities' directions was confirmed.

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Issues Involved:
1. Sanctioning of the Scheme of Amalgamation under Sections 230-232 of the Companies Act, 2013.
2. Transfer and vesting of the undertakings of the Transferor Company.
3. Legal proceedings, contracts, and other instruments.
4. Position as to charges.
5. Accounting policy relating to amalgamation.
6. Status of employees of the Transferor Company.
7. Position of authorized capital of the Transferee Company.
8. Issue of shares by the Transferee Company to eligible shareholders.
9. Compliance with statutory requirements and regulatory authorities' directions.

Detailed Analysis:

1. Sanctioning of the Scheme of Amalgamation:
The petition was filed under Sections 230-232 of the Companies Act, 2013, by Hesel Engineering Private Limited (Transferor Company) and Henry and Farad Private Limited (Transferee Company) seeking the sanction of the Scheme of Amalgamation. The Tribunal found the scheme to be fair, reasonable, and compliant with legal provisions, and thus sanctioned it, making it binding on all stakeholders.

2. Transfer and Vesting of the Undertakings:
The scheme proposed that the Transferor Company be merged into the Transferee Company, with the entire business, assets, and liabilities of the Transferor Company being transferred to and vested in the Transferee Company as a going concern, effective from 1st April 2019. This includes all tangible and intangible assets, rights, licenses, and properties as appearing in the audited balance sheet as of 31.03.2019.

3. Legal Proceedings, Contracts, and Other Instruments:
All ongoing legal, taxation, or other proceedings involving the Transferor Company will continue under the Transferee Company. Existing contracts and agreements will remain in force and be enforceable by or against the Transferee Company as if it were the original party.

4. Position as to Charges:
The transfer of the Transferor Company's undertakings will be subject to existing charges and encumbrances. The scheme does not envisage any modification of these charges.

5. Accounting Policy Relating to Amalgamation:
The amalgamation will be accounted for using the Pooling of Interest Method as per Accounting Standard 14. All assets and liabilities of the Transferor Company will be carried over to the Transferee Company's books at their book values as of the appointed date.

6. Status of Employees of the Transferor Company:
All employees of the Transferor Company will be transferred to the Transferee Company with their service conditions remaining unchanged and continuous. Their provident fund, gratuity, and other retirement benefits will also be transferred to the corresponding funds of the Transferee Company.

7. Position of Authorized Capital of the Transferee Company:
The authorized share capital of the Transferee Company will increase by the authorized capital of the Transferor Company, resulting in a total authorized share capital of Rs. 5,20,00,000/- divided into 4,70,000 equity shares and 50,000 preference shares of Rs. 100 each.

8. Issue of Shares by the Transferee Company to Eligible Shareholders:
In consideration of the amalgamation, the Transferee Company will issue 35 fully paid equity shares of Rs. 100 each for every 22 equity shares of Rs. 10 each held by the eligible shareholders of the Transferor Company. Fractional entitlements will be settled in cash within 15 days of the record date.

9. Compliance with Statutory Requirements and Regulatory Authorities' Directions:
The Registrar of Companies and other concerned authorities did not raise any objections to the scheme. The Tribunal directed the petitioner companies to file the order and scheme with the Registrar of Companies and comply with other regulatory requirements, including the adjudication of stamp duty and filing of the amended Memorandum and Articles of Association.

Conclusion:
The Tribunal sanctioned the Scheme of Amalgamation, making it binding on all parties. The Transferor Company will be dissolved without winding up, and all documents will be consolidated with those of the Transferee Company. The Tribunal's order will be drawn up in Form No. CAA 7, and any concerned authorities can approach the Tribunal for further clarifications or directions.

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