TaxTMI 
TaxTMI 
2018 (12) TMI 1748
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....the entire undertakings, assets, business and liabilities of the Transferor Companies No. 1,2, and 3 are proposed to be amalgamated with and vested in the Petitioner/Transferee Company as a going concern, so as to be binding in terms thereof on the Petitioners Companies and their respective shareholders. The Scheme also proposes the shifting of the Registered office of the Petitioner/Transferee Company from the State of Karnataka to the State of Tamil Nadu, and a change in the name of the Transferee Company from Shriram Chits (Karnataka) Private Limited to Shriram Chits (India) Private Limited. B. The Petitioner /Transferee Company was incorporated on 09.01.1990 under the name and style of 'Shriram Chits (Bangalore) Private Limited'. Subsequently on 26.02.2003 the name of the Petitioner /Transferee Company was changed to its present name i.e., "Shriram Chits (Karnataka) Private Limited" under the jurisdiction of the Registrar of Companies, Karnataka bearing CIN U65992KA1990PTC010662. The Registered office of the Petitioner /Transferee Company is situated at Akshodaya, 259/31, 1 st Floor, 10th Cross Wilson Garden, Bangalore -560027. C. The object of t....
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....a has filed the observations dated 29.06.2018 making the following observations: a) Transferor Company No. 1, Transferor Company No.2, and Transferor Company No.3 are registered with ROC Hyderabad, ROC Mumbai, and ROC Chennai respectively. b) The Scheme (at Clause No. 6(A) in Part IV) proposing for shifting of Registered Office of the Transferee Company from the State of Karnataka to the State of Tamil Nadu as an integral part of the Scheme which falls under the jurisdiction of Regional Director, Hyderabad. In this regard, Transferee Company shall file necessary forms and obtain approval of the Central Government (Power delegated to the Regional Director, SER, Hyderabad) for such shifting, after the Scheme. c) The Scheme at Clause No. 6(B) proposing to change the name of the Transferee Company from its present name, M/S 'Shriram Chits (Karnataka) Private Limited' to M/S 'Shriram Chits (India) Private Limited', the Company shall file necessary forms with the Registrar of Companies and comply with the provisions of the Companies Act, 2013. d) Since chit companies are controlled by the Registrar of Chits of the concerned states, nece....
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....ter going through the ROC report dated 29.06.2018, the Petitioner Company's letter dated 13.07.2018 and subsequent emails dated 25.07.2018 and 30.07.2018, has filed Affidavit dated 13 th August, 2018 stating as follows: a) With respect to ROC's observation on shifting of registered office, the Petitioner Companies have to file the required e-forms under Section 13 of the Companies Act, 2013. b) ROC has observed that the Scheme at Clause No. 6(B) is proposing for change of name of Transferee Company from its present name M/S Shriram Chits (Karnataka) Private Limited to M/S Shriram Chits (India) Private Limited and hence, the company shall file necessary forms with Registrar of Companies and comply the provisions of the Companies Act, 2013. The petitioner company in its email letter dated 25.07.2018 has agreed to file necessary forms with the ROC and hence this observation may not be pursued further. c) ROC has observed that at Clause No. 10.3 in part V of the Scheme it is mentioned that the transferee company is not required to pay any additional fee on the clubbing of authorised capital of the transferor companies with the transferee company which....
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....s, the petitioner companies have to comply with the respective state laws in respect of payment of stamp duty for transfer of immovable properties if any. The petitioner company in its email letter dated 30.07.2018 has stated that "the Applicant company shall seek deletion of the words 'as more fully set out in Schedule 'A ' hereto in clause 3.2. I (d) of the Scheme as Clause (d) covers all the immovable properties of the Transferor Companies." In view of the above, Hon'ble NCLT may consider examining the same and decide on the matter. g) ROC has observed that since chit companies are controlled by the Registrar of Chits of the concerned states, necessary approvals may be obtained from the concerned authorities to the scheme in the interest of public/chit holders. The petitioner company vide its email letter dated 25.07.2018 has submitted that the Company shall obtain all necessary approvals as required under law on sanctioning of the Scheme, wherever applicable. The Chit fund Act does not contemplate any requirement of prior approval. The Clause No. 3.2.4 of the Scheme takes care of all the agreements including the ag....
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....creditors and shareholders of the Transferee Company was dispensed with. It is further stated that after filing the present second motion company petition, notice of Petition was undertaken in "The Hindu", English daily, Bangalore edition and "Udayavani", Kannada daily, Bangalore edition. It is further averred that the Petitioner/Transferee Company has not received any objections in relation to the Petition till date. 9. Vide a Memo dated 09.10.2018, the Counsel for the Applicant/Transferee Company submitted Board Resolution of the Petitioner Company dated 24.07.2018 wherein the words "as more fully set out in Schedule 'A ' hereto" was resolved to be removed from Clause 3.2.1 (d) of the Scheme. 10. The Authorized Signatory of the Petitioner Companies have filed an Affidavit dated 04th December, 2018 detailing their response to the observations of the Regional Director as follows:- i. Observation No.1: Transferor Company No. l, Transferor Company No.2 and Transferor Company No.3 are registered with ROC Hyderabad, ROC Mumbai, and ROC Chennai respectively. Petitioner's Response: With regard to Point No. 1, being fact no further response is needed. ....
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....ls may be obtained from the concerned authorities to the scheme in the interest of public/chit holders. Petitioner's Response: As regard approvals required from the Registrar of Chits, we wish to state that the Company shall obtain all necessary approvals as required under law on sanctioning of the Scheme, wherever applicable. The Chit Fund Act does not contemplate any requirement of prior approval. The clause No. 3.2.4 of the Scheme takes care of all agreements including the agreement entered into with the Chit Subscribers and thus, the interest of the Chit Subscribers is adequately protected. v. Observation No,5: At Clause No. 10.3 in Part V of the Scheme it is mentioned that the Transferee Company is not required to pay any additional fee on clubbing of authorized capital of the transferor companies with the transferee company which is not acceptable under section 232(3)(i) of the Companies Act, 2013. Hence Transferee Company has to pay the differential fee if any after setting off the fee already paid by the Transferor companies on their respective authorised capital. Petitioner's Response: we undertake to comply with the provisions of s....
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.... viii. Observation No.8: There are no prosecutions, complaints, and Technical Scrutiny pending in this office on the petitioner companies. Petitioner's Response: Being fact, no further response required. ix. Clarification No. 1: ROC has observed that at Part Ill of the Scheme Method of Accounting Treatment to be followed by the transferee company has not provided and also there is no auditor's report stating as to which accounting standard/method is going to be adopted for the Scheme in conformity with Section 133 of the Companies Act, 2013. The scheme is silent about the applicability of the relevant accounting standards to be applied. As the accounting treatment in the scheme depends on the accounting standard applied and the method of accounting adopted, the petitioner company has to clarify this and only upon such clarification the accounting treatment in the scheme can be examined. Further, it is observed that the scheme at Clause 3 refers to adjustment of "General Reserve" which cannot be allowed unless the petitioner company clarifies the above issues. Petitioner's Response: Before giving response to the query, for the sake of convenien....
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....e outstanding of Shriram Ownership Trust (amount of Rs. 4,95,996/- is receivable), Shriram Chits Tamilnadu Private Limited (amount of is payable) and Shriram Investment Firm (amount of Rs. 2,20,22,001/- is payable). Hence, the provisions of Section 185 do not apply in respect of amounts payable i.e. Shriram Chits Tamilnadu Private Limited and Shriram Investment Firm. The amount outstanding receivable of Shriram Ownership Trust is not in the nature of loan and hence, the provisions of Section 185 are not applicable. All the transactions are in compliance with the provisions of Section 184 and Section 1 88, to the extend applicable. xii. Clarification No. 4: As per Clause 3.2.1 (d) of the Scheme, the list of immovable properties of Transferor Companies which are proposed to be transferred to the transferee company is stated to have been furnished in Schedule 'A'. However, no such Schedule 'A' is attached to the scheme. The petitioner company may be directed to submit the same. Petitioner's Response: The Applicant Company shall seek deletion of the words as more fully set out in Schedule 'A' hereto in clause 3.2. I(d) of the Sc....
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.... 2 Purchase from Shri Ragam Finance Investments 28.12.2007 584,998 3 Purchase from Shriram Capital Ltd. 26.07.2010 3,000 TOTAL 1,199,998 xiv. Regarding the specific queries of the Hon'ble NCLT during the hearing on 26 November 2018 regarding (a) a different share exchange ratio considered by the Board of Directors; and (b) why prior permissions of the Registrar of Chits is not required, the Petitioner, as explained to the RD vide the above communications, would like to reiterate its responses below: (i) Response to Query share exchange ratio The shareholding pattern for all four companies that are part of this scheme of amalgamation is provided for in Page 138 and 139 of the Company Petition. As the Hon'ble NCLT may note, 99.99% of the entire share capital of all the three Transferor Companies and the Transferee Company has been by one single entity i.e. the Shriram Ownership Trust. Hence, any sha exchange ratio would not have made any difference, as no other shareholders interest is affected in view of the share exchange ratio. The Board of Directors had fixed the share exchange ratio with the....
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....ior approval from the Registrar of Chits or any other authority under the said Act. Further, it is important to note that Clause No. 3.2.4 of the Scheme includes within its ambit all agreements including the agreements entered into by the Petitioners with the Chit Subscribers. Thus, the interests of the Chit Subscribers are duly and adequately protected. We have, for ease of reference, reproduced the said clause in the Scheme below: "All contracts of the Transferor Companies including in particular Agreements of Chit entered into by each of the Transferor Companies with subscribers and all agreements & documents entered into pursuant to the same, including without limitation documents & agreements relating to creation of security, subsisting or having effect immediately before the Effective Date, shall stand transferred to and vested in the Transferee Company and be in full force and effect in favour of the Transferee Company and may be enforced by or against it as fully and effectually as if, instead of the Transferor Companies, the Transferee Company had been a party or beneficiary or oblige thereto. " 11. Heard Shri K.G. Raghavan, learned Senior Counsel appearing for....