TaxTMI 
TaxTMI 
2017 (7) TMI 875
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch is proposed to be merged with its parent company ACI Worldwide Solutions Private Limited hereinafter referred to the Transferee Company under the Scheme of Amalgamation which is annexed and marked as ANNEXURE"A". The Petitioner Company was incorporated on 28.06.2011 under the name and style of "ORCC Solutions Private Limited" with Registrar of Companies Mumbai. Subsequently, the registered office of the Petitioner Company was shifted to the State of Karnataka and a fresh certificate of incorporation was issued by the Registrar of Companies Karnataka. The Petitioner Company is inter alia engaged in the business of Software development support services for the software products and solutions in the area of online banking and e commerce sectors. A copy of the Memorandum and Articles of Association of the Petitioner Company is annexed and shown as ANNEXURE "B". The registered office of the Petitioner Company is at Salarpuria Cambridge Mall, #9, Cambridge Road, Bangalore. The main objects of Petitioner Company as set out in its Memorandum and Articles of Association (a) To plan, design, develop, process, market, distribute, sell, license, lease, install, import, export or otherwis....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tings and benefits of whatever nature to which the Petitioner Company is a party, subsisting or having effect immediately before amalgamation shall be in full force and effect against or in favour of the Transferee Company and may be enforced as fully and effectively as if instead of the Petitioner Company, the Transferee Company had been the party thereto. (iv) On and from the Appointed Date i.e. April 01, 2015, the Petitioner Company shall be deemed to have carried on and carry on their business for and on behalf of the Transferee Company. (v) All the employees of the Petitioner Company, as on the Effective Date, shall become employees of the Transferee Company without any break or interruption in service and on terms of service not less favourable than those enjoyed by them. (vi) Upon the Scheme becoming effective, the Petitioner Company shall stand dissolved without going through the process of winding up. It is averred that the proposed scheme of Amalgamation will be beneficial to both the companies and will result in better and some efficient operation of the Amalgamated Company after such Amalgamation. It is averred the scheme if sanctioned will take effect from 1st A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....kia Siemens Network India (P.) Ltd., In re [2010] 103 SCL 193 (Kar.). The Learned Counsel would contend that Petitioner Company is a wholly owned subsidiary of the Transferee Company. The Learned Counsel would contend ACI Worldwide Solutions Private Limited is parent company of Petitioner Company. The counsel would contend when a wholly owned subsidiary is proposed to be merged with its holding company then there is no need for the Transferee Company / holding company to file separate application for sanction of the scheme. The counsel would contend that the decision of Hon'ble High Court of Bombay it was held where no new shares are sought to be issued to the members of the Transferor Company by the Transferee Company. This scheme will not affect the members of the Transferee Company. Hon'ble High Court further held when the financial position of the Transferor Company and Transferee Company is in good condition in other words where the value of assets are higher than the value of liability then there is no question of the creditors of Transferee Company being affected and thus no need to file separate application by the Transferee Company. The Learned Counsel for Petiti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Shareholders No. of Shares Face Value Per Share (Rs.) Amount @ FV only (Rs.) Share holding % 1 ACI Worldwide Solutions Private Limited 202812 10 2028120 99.99% 2 Jyosthna Shetty (Nominee Holder of ACI Worldwide Solutions Pvt. Ltd.) 1 10 10 0.01% Total 202813 - 2028130 100% The Learned Counsel would contend that ACI Worldwide Solutions Private Limited the Transferee Company became holding company of the Petitioner Company on 06.07.2015 and hundred percent holding company on 7-9-2015 prior to the approval of the scheme by the Board of Directors. Thus counsel would contend from 7th September 2015 the Petitioner Company became a wholly owned subsidiary of Transferee Company. The Learned Counsel contended that the Board of Directors of the Petitioner Company have approved the Scheme of Amalgamation (hereinafter referred to as the "Scheme") on September 8, 2015 by virtue of which the Petitioner Company is proposed to be merged with its parent company i.e. the Transferee Company herein, subject to confirmation of this Hon'ble Tribunal within whose jurisdiction the registered office of the Petitioner Company is situated. Copy of the Board Resoluti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he provisions of Companies Act, 1956 and it was subsequently transferred to this Tribunal the counsel would contend that the practice followed by the various High Courts under the Companies Act, 1956 exempting transferee company in filing separate petition for approval of the scheme where the transferor company is its 100% subsidiary counsel would contend the proposition of law laid down in the decisions rendered under Companies Act, 1956 is applicable by virtue of provisions of Section 465 clause (2) sub-clause (c) of Companies Act, 2013 which reads as follows:- (2) Notwithstanding the repeal under sub-section (1) of the repealed enactments:- (c) Any principle or rule of law, or established jurisdiction, form or course of pleading, practice or procedure or existing usage, custom, privilege, restriction or exemption shall not be affected, notwithstanding that the same respectively may have been in any manner affirmed or recognised or derived by, in, or from, the repealed enactments. Counsel would contend even Sec 6 of General Clauses Act is also applicable to the facts of this case as the proposition of law laid down under Companies Act, 1956 can be applied. We have seen the de....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ect to our observations as reported in the Annexure -1 of Appendix of even date 11.11.2016, we are of the opinion that the affairs of the Company have not been conducted in a manner prejudicial to the interests of the members or public interest as per (ii) proviso to sub-section (1) of the section 394 of the Companies Act, 1956. The Assistant Official Liquidator further observed that Petitioner Company may kindly be dissolved without winding up by the Tribunal. We have seen the report of Chartered Accountants T. Gandhi and Co submitted to the Hon'ble High Court of Karnataka. The Chartered Accountants T. Gandhi and Co has observed that there was a change of share holding pattern subsequent to appointed date i.e. on 1.4.2015 and that the Transferee Company became 99.99% shareholder in the Transferor Company subsequent to the appointed date. The Learned Counsel for Petitioner Company would contend the Transferee Company acquired 99.99% shareholding in the Petitioner Company which was prior to Boards approval. So it is clear that the Transferee Company acquired 99.99% shares in the Petitioner Company and that the Petitioner Company became 100% subsidiary of Transferee Company. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in but subject nevertheless to all the charges now affecting the same; and All the liabilities including taxes and charges, if any, and duties of the Petitioner Company be transferred without further act or deed to the Transferee Company and accordingly the same shall pursuant to section 232 of the Companies Act, 2013, be transferred to and become the liabilities and duties of the Transferee Company; and All the proceedings now pending by or against the Petitioner Company be continued by or against the Transferee Company, if any; and Since the Transferor Company is 100 percent subsidiary of the Transferee Company, there shall be no actual issuance of shares of the Transferee Company to the Shareholders of Transferor Company. M/s. T. Gandhi & Co., appointed by the Hon'ble High Court to scrutinize the Books and Accounts of the Petitioner Company, on verification of Books & Accounts, they have observed that there are Trade Payables in the Petitioner Company. Therefore Transferee Company shall ensure payment of the dues of Trade Creditors of the Petitioner / Transferor Company as per the agreed terms of payment between Trade Creditors and the Petitioner Company. The Petitioner....