TaxTMI 
TaxTMI 
2020 (10) TMI 1110
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....t the scheme of amalgamation be sanctioned by this hon'ble Tribunal so as to be binding on the petitioner-companies, their shareholders, secured creditors, unsecured creditors, employees, and all other relevant parties, etc. 2. Brief facts of the case, as mentioned in the company petition, are as follows : (1) M/s. HCL Technologies Solutions Ltd. (hereinafter referred to as the "petitioner-company-I/transferor company-III") is an unlisted public limited company incorporated on December 14, 1999 under the provisions of the Companies Act, 1956 as a private limited company in the name and style of "Aalayance E-Com Services P. Ltd.". Subsequently, its name was changed to "HCL EAI Services P. Ltd." in the year 2005. Further, it was converted into a public limited company and its name was changed to "HCL EAI Services Ltd." in the year 2006. Thereafter, it was again changed to its present name, i. e., HCL Technologies Solutions Ltd., and a fresh certificate of incorporation was issued by the Registrar of Companies, Bengaluru on September 17, 2012 with CIN : U72900KA1999PLC026077. Its registered office is presently situated at 501-503, 4th Floor, Oxford House No. 15, Rustam....
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....agle Ltd. ('HCL Eagle'), HCL Comnet Ltd. ('HCL Comnet'), HCL Technologies Solutions Ltd. ('HCL Tech Solutions'), Concept2Silicon Systems P. Ltd. ('C2SiS') (hereinafter referred to as 'transferor companies') and HCL Technologies Ltd. ('HCL Tech') (hereinafter referred to as 'transferee company') and their respective shareholders and creditors under sections 230 to 232 and other applicable provisions of the Companies Act, 2013, with effect from appointed date, i. e., April 1, 2019 as tabled before the board." (3) It is stated that the petitioner company-I is a wholly owned sub-sidiary of HCL America Inc. ("HCL America") (a company incorporated under the applicable laws of United States of America). HCL America is a wholly owned subsidiary of HCL Bermuda Ltd. ("HCL Bermuda") (a company incorporated under the applicable laws of Bermuda). HCL Bermuda is a wholly owned subsidiary of the transferee company. Therefore, the petitioner-company-I is an indirectly wholly owned subsidiary of the transferee company. (4) M/s. Concept2Silicon Systems P. Ltd. (hereinafter referred to as "petitioner-company-II/transferor compa....
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....;), the consent of the board be and is hereby accorded to the scheme of amalgamation (hereinafter referred as 'scheme') amongst HCL Eagle Ltd. ('HCL Eagle'), HCL Comnet Ltd. ('HCL Comnet'), HCL Technologies Solutions Ltd. ('HCL Tech Solutions'), Concept2Silicon Systems P. Ltd. ('C2SiS') (hereinafter referred to as 'transferor companies') and HCL Technologies Ltd. ('HCL Tech') (hereinafter referred to as 'transferee company') and their respective shareholders and creditors under sections 230 to 232 and other applicable provisions of the Companies Act, 2013, with effect from appointed date, i. e., April 1, 2019 as tabled before the board." (6) It is stated that the petitioner-company-II is a wholly owned sub sidiary of HCL Software Products Ltd. (formerly known as HCL Global Processing Services Ltd.) ("HCL Software") (a public limited company duly incorporated under the provisions of the 1956 Act). HCL Software is a wholly owned subsidiary of HCL Bermuda. HCL Bermuda is a wholly owned subsidiary of the transferee company. Therefore, the petitioner- company-II is an indirect wholly owned subsidiary of the transfe....
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....ty share capital is Rs. 2,71,25,57,736 divided into 1,35,62,78,868 equity shares of Rs. 2 each and subsequently there has been no change in the share capital except issued and allotment of equity shares under the employee stock option scheme of the company. The transferee company is a leading global IT ser vices company that helps global enterprises re-imagine and transform their businesses through Digital technology transformation. (10) It is further stated that the draft scheme was placed before the board of directors of other transferor companies and the transferee company and the same was unanimously approved in their respective meetings held on May 10, 2019 and May 9, 2019. (11) It is stated that the business activities of the transferor companies are ancillary and incidental to the main business operations of the transferee company. Amalgamation would inter alia result in the following benefits to the transferee company : (i) Optimum and efficient utilization of resources either in form of assets and sharing of ancillary facilities ; (ii) Synchronization of efforts to achieve uniform corporate policy and ease in decision making ....
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.... investigation proceedings have been instituted and/or is pending in relation to the petitioner-companies under sections 235 and 250A of the Companies Act, 1956 or sections 210, 212, 213 and 216 of the Companies Act, 2013, and that there are no proceedings for winding up pending before this Tribunal or before the hon'ble High Court of Karnataka against the petitioner-companies. 3. It is stated that the petitioners had filed C. A. (CAA) No. 43/BB/2019 before this Tribunal seeking to dispense with the meetings of the equity shareholders and creditors of the petitioner-companies. The Tribunal vide its order dated September 12, 2019 ordered for convening the meetings of the equity shareholders of the petitioner-companies and dispensed with the meeting of the unsecured creditors of transferor company-IV. The Tribunal vide another order dated September 27, 2019 passed in L. A. No. 492 of 2019 in C. A. (CAA) No. 43/BB/2019 permitted the petitioners to convene the meetings of equity shareholders on October 31, 2019 instead of October 7, 2019 as originally directed. The said meetings were duly convened and the reports of the chairpersons and scrutinizers were submitted, wherein, the ....
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.... (6) The transferee company shall comply with section 232(3)(i) of Companies Act, 2013, and pay the difference fee, after setting of the fee already paid by the transferor company on their respective capital. Transferee company shall give an undertaking to that effect. (7) Almost all shares of transferor companies Nos. 3 and 4 are held directly or indirectly by foreign entities. Hence the companies may be directed to comply with the FEMA/RBI Regulations. (8) As per the statutory auditors report, there are certain Income-tax dues pending with regard to transferor company No. 3 and the matter is pending before the hon'ble High Court. (9) Transferor companies Nos. 3 and 4 have related party transactions. Necessary compliance under section 188 of the Act may be called for. (10) There are no prosecutions, complaints, technical scrutiny/inspections pending against the petitioner-companies. 6. The Regional Director (SER), MCA, Hyderabad vide its two affidavits, the latest being of June 19, 2020 has, inter alia, observed the same as pointed out in the Registrar of Companies report, and further submitted as follows : (1) Almost all share....
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....nies with the transferee companies. Notwithstanding the same, as required by the Registrar of Companies, the petitioner-companies hereby undertake to comply with all the FEMA/RBI Guidelines, if any, necessary to implement the scheme. (3) As regards the Income-tax dues pending with regard to transferor company No. 3, it is stated that in terms of the provisions of clause 11 of the scheme, upon the scheme becoming effective, all the pending proceedings including taxation proceedings pending on part of the transferor companies shall continue to be enforced against the transferee company. Further, in terms of clause 13 of the scheme, upon the scheme becoming effective, all taxes and duties payable by the transferor companies shall be treated as taxes and duties of the transferee company. It is further submitted that the scheme does not involve any tax evasion. Also, the transferee company hereby undertakes to pay the Income-tax dues of the transferor companies, subject to final outcome of the pending proceedings. (4) As regards the relation party transactions of transferor companies Nos. 3 and 4, it is stated that none of the petitioner-companies have undertaken any r....
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....the books of account and records of the transferor company-IV has engaged M/s. N. Tatia and Associates, chartered accountants, which, after examining the affairs of the transferor company-III, in its report dated February 25, 2020 has, inter alia, concluded as under : "5.70 On scrutiny of books of account, papers, statutory registers and other related records of the company, we are of the opinion that the affairs of the company have not been conducted in a manner pre judicial to the interest of the members of the company or public interest as per section 232 of the Companies Act, 2013. 5.11 As employees of transferor company is transferred to transferee company there is no loss of interest to employees of transferor company." Therefore, the official liquidator prays to pass such order(s) on the merits of the case subjection to objection, if any, by other sectoral regulators. 10. Mr. Ganesh R. Ghale, learned standing counsel for Income-tax Department has filed a memo dated January 27, 2020 by, inter alia, stating that as per the report received from the Income-tax Department arrears of outstanding demand of Rs. 1,15,63,274 (rupees one crore fifteen lakhs sixt....
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....nal, Delhi Bench, by an order dated December 12, 2019, and a copy of the same has been placed on record vide memo dated February 26, 2020. Therefore, he has urged the Tribunal to sanction the scheme in question, as it is required to be sanctioned by this Bench in respect of the petitioner- companies. 14. Heard Mr. Satwinder Singh along with Mr. Raghuram Cadambi, learned counsels for the petitioner-companies, Smt. Prema Hatti, learned standing counsel for the Registrar of Companies, Mr. Ganesh R. Ghale, learned standing counsel for the Income-tax Department and Mr. J. Elangovan representing office of the official liquidator. We have carefully perused the pleadings of the parties and the extant provisions of the Companies Act, 2013 and various Rules made thereunder and the law on the issue. 15. We have considered the facts of the case as mentioned in the petition, the report of the Regional Director, Hyderabad and the Registrar of Companies, Karnataka, in which the paragraph wise replies of the petitioner- companies have been duly examined along with the comments offered by the official liquidator and the relevant provisions contained in the Companies Act, 2013 and other relate....
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.... (6) All the proceedings now pending by or against the petitioner- companies be continued by or against the transferee company, if any ; and (7) Liability, if any, arising from non-compliance to the provisions contained in section 135, shall stand transferred to and be the liability of the transferee company ; (8) The petitioner-companies shall ensure all requisite compliances under the FEMA/RBI Guidelines, as may be applicable ; (9) The petitioner-companies shall within thirty days of the date of the receipt of this order cause a certified copy of this order along with a copy of scheme of amalgamation to be delivered to the Registrar of Companies for registration in accordance with applicable Rules and Regulations; (10) The petitioner-companies shall file all the due statutory returns immediately, if any ; (11) The petitioner-companies will ensure full compliance with their affidavits and all provisions of the Companies Act, 2013, as may be applicable, and will submit quarterly/annual status of compliances through an affidavit by managing director/director of the company along with CA/ ICWA/CS certificate till the compliance is ensur....