TaxTMI 
TaxTMI 
2020 (11) TMI 59
X X X X Extracts X X X X
X X X X Extracts X X X X
....ors and all persons concerned under the Scheme, etc. 2. Brief facts of the case, as mentioned in the Company Petition, which are relevant to the issue in question, are as follows: (1) M/s. VMware Software India Private Limited (hereinafter referred to as 'Petitioner / Transferee Company') is an existing Private Limited Company incorporated on 09.03.2007 under the Companies Act, 1956 with CIN: U72900KA2007PTC042047 and is having its registered office at Kalyani Magnum, Tower 1, 3rd Floor, No. 165/2, Doraisanipalya, IIM Post, Bannerghatta Road, Bangalore-560076. Its Authorised Share Capital as on date of Petition is Rs. 31,00,000/- divided into 3,10,000 Equity Shares of Rs. 10/- each and the Issued, Subscribed and Paid-up Capital is Rs. 1,16,210/- divided into 11,621 Equity Shares of Rs. 10/- each. Its main objects inter alia are to initiate, undertake, research, developments, experiments, analysis, test of all kinds particularly those related to computers, to plan, design, develop, improve, market, distribute, sell, license, lease, install, alter, import, export, or otherwise deal in with all kinds of software, hardware and programmes of any and all kinds, etc. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....00,000/-divided into 10,000 Equity Shares of Rs. 10/- each. Its main objects inter alia are 'to carry on the business of software development, maintenance, quality assurance, implementation, customisation, sale, distribution and customer support operations, to create software products to manage computer servers, networks, storage equipment and other infrastructure in data centres', etc. (5) Similarly, the Board of Directors of the Transferor Company, in their meeting held on 21.03.2018, has approved the said Scheme of Amalgamation subject to the approval of their shareholders and creditors and of the Hon'ble Tribunal. (6) M/s. Price Waterhouse & Co Chartered Accountants LLP, the Statutory Auditors of the Transferee Company, vide Certificate dated 23.04.2018 has inter alia confirmed that the accounting treatment contained in the aforesaid Scheme is in compliance with all the applicable Accounting Standards specified under Section 133 of the 2013 Act and other generally accepted accounting principles. (7) Further, the objects of Transferor Company complement the objects of the Transferee Company. The merger would result in optimum utilization of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eetings of the Shareholders and Creditors of the Transferee Company for considering the Scheme, etc. The Tribunal, vide its Order dated 28.09.2018, has dispensed with the meetings of the Equity Shareholders and Unsecured Creditors of the Transferee Company. 4. The Tribunal vide its Order dated 03.12.2018 passed in I.A. No. 376 of 2018 in C.P. (CAA) No. 60/BB/2018 directed the Petitioner Company to issue notice to the Regional Director (SER), Hyderabad, ROC Karnataka, Official Liquidator, Principal Chief Commissioner of Income Tax, Karnataka & Goa and vide another Order dated 03.12.2018 passed in I.A. No. 375 of 2018 in C.P. (CAA) No. 60/BB/ 2018 allowed the Petitioner Company to publish paper notification one in The Hindu' English Newspaper Bangalore edition as well as in 'Praja Vani', Kannada Newspaper and to file proof of the same. It is affirmed that the Petitioner has caused appropriate notifications as per the above order and they have not received any objection from any party about the acceptance of Scheme. 5. The Registrar of Companies, Karnataka, has filed two Affidavits dated 30th July, 2019 and 05th November, 2019, while not opposing the Company Petition....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed party transactions, as entered into by the Transferor Company and the Transferee Company are in the ordinary course of business and on the arm's length basis, therefore, in terms of the provisions of fourth proviso to Section 188 of the Companies Act, 2013 read with Rules framed thereunder ('Act'), the provisions of Section 188 of the Act, are not applicable to the related party transactions entered into by the Transferor Company and Transferee Company. (3) The Transferee Company shall pay necessary statutory fees and stamp duty, as may be payable upon clubbing of the Authorised Share Capital of the Transferor Company into the Authorised Share Capital of Transferee Company in accordance with the provisions of Section 233(11) of the Act. Also, it is submitted that basis the valuation report dated 24.08.2017 as obtained from Vasan & Sampath LLP, share swap ratio is 1:363 (i.e. 1 Equity Share of Rs. 10/- each of Transferee Company will be issued and allotted for every 363 fully paid-up equity shares of Rs. 10/- each held in the Transferor). Therefore, Mr. Velmurugan Kannippan, who is currently holding only (1) one equity share in the Transferor Company....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng Setlur, Learned Counsel for the Petitioner, Smt. Prema Hatti, Learned Counsel for the ROC and Mr. Ganesh R. Ghale, Learned Counsel for the Income Tax Department. We have carefully perused the pleadings of both the Parties and the extant Provisions of Companies Act, 2013 and various Rules made thereunder and the Law on the issue. 8. Mr. Shubhang Setlur, Learned Counsel for the Petitioner, while reiterating various averments already placed on record, as briefly stated supra, has further submitted that Arkinnet Software Private Limited, the Transferor Company, has already approached the NCLT, Mumbai Bench by way of filing CP (CAA) No. 593/230-232/MB/C-IV/2018 connected with CA(CAA) No. 555/230-232/MB/C-IV/2018 by inter alia seeking to sanction the Scheme in question. Accordingly, the Scheme was sanctioned subject to various conditions imposed therein, by an order dated 05.03.2020. He has also placed a copy of Order on the record. Therefore, he has urged the Tribunal to sanction the Scheme in question, as it is required to be sanctioned by the Bench in respect of Transferee Company. 9. Smt. Prema Hatti, Learned Counsel for the ROC, has pointed out various observations made in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Scheme, subject to compliance of extant provisions of Companies Act and to make them to comply all terms and conditions as mentioned in the proposed Scheme in question, and other consequential actions, after sanction of the Scheme. 13. By perusal of instant Scheme of Amalgamation of the Companies involved here, we are of considered opinion that the Scheme in question is comprehensive one complying with the provisions of Sections 230 to 232 of the Companies Act, 2013 and the Rules made thereunder and the Petition Application is filed in accordance with law. It covers all the issues relating to legal proceedings, continuation of contracts, deeds, therefore, the Scheme in question prima facie eligible to be sanctioned, however, subject to compliance of various undertakings as mentioned in the Scheme and to follow/comply various observations made by the Statutory Authorities as detailed supra. It is also appears to be fair, reasonable and it is not detrimental against the Members or Creditors or contrary to public policy. It is settled position of law that Court / Tribunal, should not, in the normal circumstances, can interfere in the decisions taken in their commercial wisdom ....