TaxTMI 
TaxTMI 
2020 (12) TMI 374
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.... scheme of amalgamation is annexed here with as annexure H, i.e., page Nos. 329-354 to the petition. 2. The averments made in the application are briefly described hereunder : Transferor company No. 1: (a) Karix Mobile P. Ltd., ("the first petitioner-company" or "transferor company No. 1") was originally incorporated on August 8, 2000, under the provisions of the Companies Act, 1956 with the Registrar of Companies, Chennai, in the State of Tamil Nadu under the name and style of AIR2WEB India P. Ltd." and changed its name as ""mGage India P. Ltd." on March 25, 2014, and subsequently changed the name to "Karix Mobile P. Ltd." on January 31, 2018, and shifted the registered office to Hyderabad, in the State of Telangana vide order of regional director dated June 25, 2019. (b) Transferor company No. 1 is engaged in the business of providing software as a service (SaaS) based mobile messaging services for enterprises, aggregators and governmental authorities, copies of memorandum and articles of association are marked as Annexure A to the application. (c) The authorized, subscribed and paid-up share capital of transferor company No. 1 as on March 31, 2019 i....
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.... Corporation P. Ltd." on July 19, 2015. (h) The transferee company is engaged in the business of providing SaaS-based consumer communication services, such as text messages, voice messages, etc., for enterprises, aggregators and Governmental entities. The copy of memorandum and articles of association are hereto annexed and marked as annexure E to the application. (i) The authorized, subscribed and paid-up share capital of the transferee company as on March 31, 2019 was as under: Particulars Amount (INR) Authorised share capital : 22,50,000 equity shares of INR 10 each 22,50,000 Issued, subscribed and paid-up share capital : 13,28,647 equity shares of INR 10 each 1,32,86,470 Subsequent to March 31, 2019 as on the date of filing of this application, there change in the authorised, issued, subscribed and paid-up share capital of the transferee company and revised capital is as under: Particulars Amount (INR) Authorised share capital : 80,00,000 equity shares of INR 10 each 8,00,00,000 Issued, subscribed and paid-up share capital : 68,06,450 equity shares of INR 10 each 6....
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....ly result into more efficient functioning of the transferee company in a cost effective manner. (e) The amalgamation is expected to increase the financial strength thereby enabling further growth and development of the transferee company. (f) The amalgamation would result into simplification of the holding structure of different entities of Tanla Group. (g) The amalgamation would bring greater management focus and would help in achieving uniform corporate policies and faster/effective decision making and its implementation. (h) Cost reduction as a result of focused operational efforts, elimination of duplication of administrative expenses, optimum utilization of available resources and integrating management focus which will make the internal control systems more efficient and effective. (i) Business synergies in the operations of the transferee and the transferor companies will provide operational flexibility resulting into higher profitability and a stronger and wider capital and financial base for future growth/expansion of the transferee company. (j) The amalgamation would help avoiding duplication of regulatory and procedur....
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....rrangements and Amalgamations) Rules, 2016. An undertaking from the petitioner companies to this extent is enclosed in annexure 1. 3(b). The hon'ble Tribunal may be pleased to direct the petitioner-company(s) to ensure statutory compliance of all applicable laws and on sanctioning of the present scheme the applicant company shall not be absolved for any of its statutory liability in any manner. 3(c). The hon'ble Tribunal may be pleased to direct the petitioner companies), involved in the scheme to comply with rule 17(2) of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, with respect to filing of order for confirmation of schemes to be filed in Form INC-28 with the concerned office of the Registrar of Companies by the petitioner-company. 3(d). The hon'ble Tribunal may pleased to direct the petitioner transferee company to file an application with the Registrar of Companies indicating the revised authorized capital and proof of paying prescribed fees due on revised capital after setting of the fee already paid by transferor companies. It is clarified that the authorized capital of the transferor company No.....
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.... in accordance with the provisions of the Companies Act, 2013 and in accordance with the clarification provided by MCA vide its General Circular No 9 of 2019, dated August 21, 2019 See [2019] 216 Comp Cas (St.) 40 Accordingly, there arise no need of changing the appointed date. In connection to this hon'ble Bangalore, National Company Law Tribunal order is also attached herewith as "annexure 3" 7 The hon'ble Tribunal may also be pleased to direct the petitioner transferee company to amend the scheme suitably by removing the clause relating to change of name of transferee company to that of transferor company and to submit amended scheme duly certified by all the petitioner companies before the scheme is allowed. It is averred that in various judicial precedents it has been held that transferee company is allowed to change its name to that of transferor company as part of scheme of amalgamation The objection of the Regional Director that name change is against the (Incorporation) Rules, 2014 does not arise for consideration as the same rule provided for seeking direction from the hon'ble Tribunal for changing the name. Some of landmark judgments reference ....
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....s clear that only 4 per cent of them have given the consents (i.e., Tarda Solutions Ltd. representing 66.04 per cent, and remaining 8 unsecured creditors representing 4 per cent, total aggregating to 70.04 per cent For having the consents of three-fourths of the creditors the transferor company has not complied with the provisions of section 230(6) of the Companies Act, 2013. It is settled principle as laid down in the section 230(6) that where a meeting is held by order of hon'ble Tribunal in pursuance of section 230(1), majority of persons representing three-fourths in value of the creditors, present in the meeting and voting in person or by proxy or by postal ballot, agree to any compromise or arrangement then such approval is final and binding. Hence, it can be said that 3/4th is to be considered from the creditors present and voted at the meeting and the hon'ble Tribunal appointed chairman Mr. C. V. Krishna Grandhi whose report it was stated that meeting was attended by 9 creditors and all the creditors present have voted in favour of resolution (including voting by Tanla Solution Ltd.). The scheme was approved by every creditor present for the meeting, no questi....
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....s and the transferee company, the impact of the same will be quantified and adjusted in reserves to ensure that the financial statements of the transferee company reflect the financial position on the basis of a consistent accounting policies." * The auditors had provided their report considering the above clause as well. * However, when the scheme was being finalized, the management of the companies had observed the accounting policies, and concluded that there is no change in the policies of the transferor companies and transferee company. * Accordingly, in the final scheme, the management had decided to remove clause 13.3 since there are no differences in the accounting policies. However, the auditor's certificate was not modified to this extent since it relied on the draft scheme. 1.2. The petitioner-companies wish to submit that the proposed acquisition of shares of transferor companies was made by Tarda Group with the business strategy of consolidating the same with the business of the transferee company to strengthen its market position and consolidate the enterprise business of the Group in the transferee company for rendering services to....
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....cheme m clause 16 as well in Point No 34 of form NCLT-1 as in petition filed before this hon'ble Tribunal. d. Further, unaudited financials as on appointed date (April 10, 2019) also not furnished. Hence, the share holding pattern, etc., as at appointed date (April 10, 2019) could not be verified by the Official Liquidator so as to inter alia check, if there exists holding and subsidiary relation as at April 10, 2019 or not between the transferor and transferee. Accordingly, the hon'ble National Company Law Tribunal may be pleased to direct the transferor companies to furnish the following to the official liquidator as under and to file further report after their verification: Transferor companies complied this observation in their reply to the official liquidator sent through email on May 21, 2020 and same will also be submitted with their office in physical mode. (i) unaudited financials with all notes (both standalone and consolidated) as at appointed date (April 10, 2019) for pre and post-acquisition by Tank Solutions Ltd. (ii) unaudited financials with all notes (consolidated) for latest date/September 30, 2019 or the date of registration of actual trans....
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....ly transferor company No. 2 was also not a step down subsidiary as at appointed date. However, the scheme with appointed date of April 10, 2019, contemplates that the transferee is a holding company and accordingly seeks not to allot any shares for consideration as part of the scheme. Hence, the hon'ble National Company Law Tribunal may be pleased to direct change of Appointed Date to the date when transferee company acquired shares of transferor company No. 1 or to provide for consideration as part of the scheme by amending the scheme. A copy of the letters dated April 10, 2019 and August 30, 2019 addressed to the stock exchange are enclosed herewith and collectively marked as annexure "S". As per the observation made by the official liquidator, it is hereby clarified as under: 1.1. As per section 232(6) of the Companies Act, 2013 (the Act), the scheme filed under the provisions of section 230-232 of the Act should clearly indicate an "appointed date" from which it shall be effective, and the scheme shall be deemed to be effective from such date. 1.2. Further, the Ministry of Corporate Affairs (MCA) vide its General Circular No. 9 of 2019 dated August 21, 2019 (Circul....
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....mpanies (Accounts) Rules, 2014. The statutory auditor certifying accounting Treatment of the scheme is annexed here with as Annexure J. Valuation report: The applicant-companies are stating that the report of valuation of shares by chartered accountant is not applicable as the first transferor company and second transferor company are 100 per cent, wholly owned subsidiary companies of the transferee company and accordingly no shares are required to be issued/allotted under the scheme of amalgamation. Other details: A. It is further averred that the applicant-companies are not required to obtain approval of Competition Commission of India ("CCI") or serve any notice to CCI, since the proposed amalgamation embodied in the scheme does not exceed prescribed financial thresholds and that transferor company No. 1 and transferor company No. 2 are wholly owned subsidiary and step down subsidiary respectively of the transferee company and therefore belongs to same group and the proposed scheme will not result into dominant position of the transferee company. Further based on nature of business carried on by the applicant-companies, no other approval/conse....
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....ree company, if any, and; 7. The petitioner- companies shall within thirty days of the date of 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 rule 25(7) of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016; 8. The scheme of amalgamation shall be effective from the appointed date as mentioned in the scheme of amalgamation, i.e., April 10, 2019 so as to be binding on all the member, employees, creditors, of the petitioner companies and on the petitioner companies; 9. The transferee company shall pay the difference of stamp duty, if any payable over the increase in the share capital after setting off the fee if any paid by the transferor companies; 10. The petitioner-companies to comply the observations made by the RD and official liquidator in their reports; 11. The petitioners/transferor companies be dissolved without winding up as per the scheme of amalgamation; 12. The transferor companies or its authorized signatory is directed that after the completion of the process o....