2024 (3) TMI 1532 - Tri - Companies Law

Scheme of Amalgamation sanctioned; effective from appointed date, transferor companies dissolved without winding up, subject to statutory compliance.

Scheme of Amalgamation between multiple transferor companies and the transferee was examined for compliance with statutory merger provisions and rules; ... Seeking approval of Scheme of Amalgamation with effect from the Appointed Date - compromise arrangement amalgamation - statutory requirements under Sections 230 and 232 of the Companies Act, 2013 - vesting of assets and continuance of proceedings in transferee company - compliance with regulatory observations and preservation of statutory rights. Sanction of scheme of amalgamation under Sections 230-232 of the Companies Act, 2013 - HELD THAT:- The Tribunal found that the requirements of Sections 230 and 232 and the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 were satisfied, notes that meetings of shareholders and creditors were convened and the Scheme was unanimously approved by those meetings, and accepted the petitioners' reliance on authority establishing that statutory rights of revenue authorities are preserved. On that basis the Scheme was held to be bona fide and in the interests of shareholders and creditors and sanctioned. [Paras 4, 12, 14] The Scheme of Amalgamation is sanctioned and declared binding on the petitioner companies, their shareholders and creditors. Vesting of assets and continuance of proceedings in transferee company - HELD THAT:- The Tribunal directed that all properties, rights and powers of the Transferor Companies shall be transferred to and vested in the Transferee Company pursuant to Section 232, and that any proceedings pending against the Transferor Companies shall be continued by or against the Transferee Company, thereby providing for legal continuity post-amalgamation. [Paras 17] All assets, rights and powers are transferred to and vested in the Transferee Company and pending proceedings shall continue by or against the Transferee Company. Compliance with regulatory observations and preservation of statutory rights - HELD THAT:- Having noted the Regional Director/ROC representation concerning pending prosecution items relating to a Transferor Company and the Income Tax Department's report of demands, the Tribunal accepted the petitioners' undertakings that statutory liabilities and proceedings would not be affected by the Scheme. The Tribunal directed specific compliance: resolution of the Section 204 matter before RoC Mumbai to be complied within three months and submission of compliance to RoC Ahmedbad; completion of any other regulatory compliance by 30.4.2024; submission of certified financial statements as on 31 Dec 2023 within 30 days; and that the sanction does not grant exemption from stamp duty, taxes or bar rights of tax authorities. [Paras 5, 6, 11, 16, 17] Petitioners must comply with RoC/Regulatory directions and other statutory obligations within the timelines specified; the sanction does not affect tax or stamp duty liabilities or the rights of revenue authorities. Procedural steps to be taken consequent to sanction - HELD THAT:- The Tribunal ordered standard post-sanction actions: lodging certified copy of the order and Scheme with the Registrar of Companies and Superintendent of Stamps within the timeframes specified, consolidation of authorised capital, transfer of files by the Registrar on receipt of certified copy, and quantified legal fees of the Regional Director and Official Liquidator to be paid by the Transferee Company. It also dispensed with drawn-up orders under the CA(A) Rules and permitted application to the Tribunal within 30 days by aggrieved persons. [Paras 17] Petitioners to complete the procedural filings, payments and statutory formalities as directed; rights to apply to the Tribunal preserved for aggrieved persons. Final Conclusion: The Tribunal sanctioned the Scheme of Amalgamation as meeting the statutory requirements, directed vesting of assets and continuance of proceedings in the Transferee Company, imposed specified compliance and filing conditions (including resolution of RoC observations), preserved the rights of revenue and other authorities, and ordered ancillary procedural steps and payments as set out in the order. Issues: Whether the Scheme of Amalgamation between the Transferor Companies and Adani Green Energy Twenty Three Limited complies with Sections 230 and 232 of the Companies Act, 2013 and related rules and should be sanctioned with effect from the appointed date 01.10.2022.Analysis: The Tribunal considered the statutory requirements under Sections 230 and 232 of the Companies Act, 2013 and the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, the affidavits of service, the reports and representations of the Regional Director and Registrar of Companies, the Official Liquidator's representations, and the Income Tax Department's report. Meetings convened in compliance with the Tribunal's directions showed unanimous approval by equity shareholders and secured and unsecured creditors. The Tribunal noted RD/RoC observations regarding alleged proceedings under Section 204 against Transferor Company No. 7, and accepted petitioner undertakings that proceedings would continue and be complied with; the Transferee Company undertook cooperation and to comply with statutory obligations. The Tribunal found no unresolved adverse observations preventing sanction; it accepted precedent authority submissions regarding preservation of tax department rights and considered that the scheme is bona fide and in the interest of shareholders and creditors.Conclusion: The Scheme of Amalgamation is sanctioned and the Company Petition CP (CAA)/55(AHM)2023 in CA(CAA)/48(AHM)2023 is allowed; the Scheme shall be effective from the appointed date 01.10.2022 and the Transferor Companies shall be dissolved without winding up, subject to compliance directions given by the Tribunal.