2022 (5) TMI 87 - Tri - Companies Law

Approval of Amalgamation Scheme between Companies for Business Efficiency

The Company Petition seeking sanction of the Scheme of Amalgamation between two companies was approved by the Tribunal. The Scheme aimed at combining ... Sanction of Scheme of Amalgamation - Section 230(6) read with Section 232(3) of the Companies Act, 2013 - HELD THAT:- Various directions with regard to holding, convening and dispensing with various meetings issued - directions with regard to issuance of various notices also issued. The scheme is approved - application allowed. Issues Involved:1. Sanction of the Scheme of Amalgamation.2. Compliance with statutory requirements.3. Observations and objections by the Official Liquidator and Regional Director.4. Income Tax Department's outstanding demands.5. Procedural directions and final orders.Detailed Analysis:1. Sanction of the Scheme of Amalgamation:The petition was filed under Section 230(6) read with Section 232(3) of the Companies Act, 2013, for the sanction of the Scheme of Amalgamation between Eurasia Publishing House Private Limited (Transferor Company) and Chhaya Prakashani Limited (Transferee Company). The appointed date for the amalgamation was set as 01st April 2020. The Scheme was approved by the Board of Directors of both companies on 25th June 2020 and 01st July 2020, respectively. The amalgamation aimed to combine the businesses for better utilization of resources, consolidation of business activities, and achieving economies of scale.2. Compliance with Statutory Requirements:The Statutory Auditors confirmed that the accounting treatment in the Scheme conformed with the accounting standards prescribed under Section 133 of the Companies Act, 2013. No proceedings were pending under Sections 210 to 227 of the Companies Act, 2013, against the Petitioners. The Tribunal had previously dispensed with the meetings of Equity Shareholders and Unsecured Creditors due to their consent via affidavits. Notices were duly served to Regulatory Authorities, and advertisements were published as required.3. Observations and Objections by the Official Liquidator and Regional Director:The Official Liquidator reported no complaints against the proposed Scheme and confirmed that the affairs of the Transferor Companies were not conducted prejudicially. The Regional Director's observations included the non-filing of MGT-14 by the Transferee Company for certain years, which was addressed by the Petitioners, stating that exemptions applied during those periods. The Regional Director also noted that the Scheme enclosed in the Company Application and Petition were the same, and the Transferee Company undertook to comply with provisions of Section 232(3)(i) and pay applicable stamp duty on the transfer of immovable properties.4. Income Tax Department's Outstanding Demands:The Income Tax Department reported an outstanding demand of Rs. 1,18,51,164 against Chhaya Prakashani Limited. The Petitioners acknowledged this and stated that the demands would continue post-amalgamation, allowing the Income Tax Department to proceed accordingly.5. Procedural Directions and Final Orders:The Tribunal sanctioned the Scheme of Amalgamation with the appointed date as 1st April 2020. All properties, rights, and interests of the Transferor Company were transferred to the Transferee Company. Debts, liabilities, and duties of the Transferor Company were also transferred to the Transferee Company. The Transferee Company was directed to issue and allot shares to the shareholders of the Transferor Company as per the Scheme. The Transferor Company would stand dissolved without winding up from the effective date. Certified copies of the order were to be delivered to the Registrar of Companies, West Bengal, within 30 days. The Tribunal also provided liberty for any interested person to apply for necessary directions and ordered the Petitioners to supply a legible printout of the Scheme to the registry.Conclusion:The Company Petition C.P. (CAA) No. 199/KB/2021 was disposed of, with the Scheme of Amalgamation being sanctioned and all relevant statutory and procedural compliances being addressed. Urgent certified copies of the order were to be supplied to the parties upon compliance with requisite formalities.