Appeals Dismissed: Tribunal Confirms Fair Valuation and Compliance in Amalgamation Case.

The Tribunal dismissed the appeals, determining that the Appellants lacked the locus standi to challenge the Impugned Order due to insufficient shareholding and debt interest. It upheld the valuation method and swap ratio of 15:1 as fair and approved by the majority of shareholders. The Tribunal confirmed compliance with the appointed date as per MCA Circular No. 09/2019 and found no violation of Section 230 of the Companies Act, 2013. The scheme of amalgamation was deemed fair, reasonable, and compliant with legal provisions, leading to the dismissal of the appeals as meritless.

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Issues Involved:
1. Locus of the Appellants to challenge the Impugned Order.
2. Correctness and adequacy of the valuation method adopted.
3. Whether the swap ratio of 15:1 was unconscionable and prejudicial to minority shareholders.
4. Compliance with the appointed date as per MCA Circular No. 09/2019.
5. Violation of Section 230 of the Companies Act, 2013 in the scheme of amalgamation.

Summary of Judgment:

Issue 1: Locus of the Appellants to challenge the Impugned Order
- The Tribunal held that under Proviso to Section 230(4) of the Companies Act, 2013, objections to a compromise or arrangement can only be made by persons holding not less than 10% of the shareholding or having outstanding debt amounting to not less than 5% of the total outstanding debt. The Appellants in CA (AT) No. 132 of 2021 held approximately 0.0699% of the total paid-up share capital of Respondent No. 3, and the Appellants in CA (AT) No. 150 & 151 of 2021 held less than 5% of the total outstanding debt of the Respondent Company 1. Therefore, the Tribunal concluded that the Appellants lacked the locus to challenge the Impugned Order.

Issue 2: Correctness and adequacy of the valuation method adopted
- The Tribunal noted that the valuation method adopted by the Registered Valuer and confirmed by independent experts was adequate and correct. The Tribunal emphasized that the commercial wisdom of the shareholders and creditors who voted overwhelmingly in favor of the scheme should be respected.

Issue 3: Whether the swap ratio of 15:1 was unconscionable and prejudicial to minority shareholders
- The Appellants objected to the swap ratio of 15:1, arguing that it was not based on the earnings of the companies. However, the Tribunal found that the swap ratio was determined based on a valuation report and was approved by a significant majority of shareholders. The Tribunal concluded that the swap ratio was not unconscionable or prejudicial to minority shareholders.

Issue 4: Compliance with the appointed date as per MCA Circular No. 09/2019
- The Tribunal found that the appointed date of 01.04.2019 was in compliance with the general Circular No. 09/2019 issued by the Ministry of Corporate Affairs. The Tribunal noted that the scheme was approved by the shareholders and the appointed date was part of the scheme sanctioned by the Tribunal.

Issue 5: Violation of Section 230 of the Companies Act, 2013 in the scheme of amalgamation
- The Tribunal held that the scheme of amalgamation did not violate Section 230 of the Companies Act, 2013. The Tribunal observed that all requisite statutory compliances were fulfilled, and the scheme was fair, reasonable, and not violative of any provisions of law or public policy.

Conclusion:
- The Tribunal dismissed both appeals, stating that the Appellants lacked the locus to challenge the Impugned Order and that the scheme of amalgamation was fair, reasonable, and in compliance with the relevant provisions of the Companies Act, 2013. The Tribunal upheld the Impugned Order dated 29.10.2021 and dismissed the appeals devoid of any merit.

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