TaxTMI 
TaxTMI 
TaxTMI 
2020 (12) TMI 374
X X X X Extracts X X X X
X X X X Extracts X X X X
....h 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 is as under: Particulars Amount (INR) Authorised share capital :....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ext 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 6,80,64,500 3. The board of directors of the petitioner companies in their respective board meetings held on August 30, 2019, have approved the scheme of amalgamation of the transferor companies with the transferee company ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 procedural compliances and consequently result into saving of time, resources and cost involved in such compliances. (k) The amalgamation shall be beneficial and in the best interests of the shareholders, creditors, employees of the companies involved and all concerned. First stage application in brief: This Tribunal b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tutory 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. 1 and transferor company No. 2 shall be combined/aggregated with that of the transferee company in terms of clause 15.1 of the Scheme, transferee company hereby undertakes that in accordance with section 232(3)(i) of the Companies Act, 2013; upon sanction of scheme of merger, the transferee company will file necessary application indicating the revised authorized capital and proof of pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 is made herein where name of transferor company was allowed as part of scheme of amalgamation to be adopted by transferee company, i.e.,: 1. Michelin India P. Ltd. before the High Court of Madras in C.P. No. 391 and 391 of 2014 2. The hon'ble Mumbai National Company Law Tribunal order dated January 20, 2019 in the matter of Marion and Marian Ltd. in C. P. No. 3904 of 2019. 3. The hon'ble Hyderabad Tribunal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat 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 question arises of not having 3/4th majority consent as all the creditors present in the meeting was (i. e., 100 per cent) gave consent to the scheme. The official liquidator filed his report O.L.R. No. 13 of 2020 on May 18, 2020 for which the petitioner-companies had filed their reply which are given below: Sl. No. Observations by the official liquidator Reply by the petitioner-companies a. The hon'ble National Company Law Tribunal may....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 all the enterprise clients However, due to commercial negotiations between the parties, the shares were initially acquired by Tarda Solutions Ltd. (holding company of the transferee company) and thereafter transferred to the transferee company with the approval of the board of directors of Tarda Solutions Ltd 1.3. The same has also been provided in paragraph 3 of the scheme of amalgamation filed before the hon'ble National Company Law Tribunal and approved by the board of d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 transfer of shares by Tarda Solutions Ltd. To the transferee company. (iii) Audited financials with all notes (consolidated) as at March 31, 2019, March 31, 2018 and March 31, 2017. e. That, the previous shareholder (just prior to acquisition by Tanla Solutions Ltd. (not a party in the Scheme) on appointed date April 10, 2019) of the transferor company No. 1 were two foreign entities, viz, M/s. Unicel Mauritius (formerly known as Banyan Investments Ltd.) and M/s. mGage Mauritius. However, the details of a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 (Circular) relying on the decision of the hon'ble Supreme Court in the case of Marshall Sons and Co. (India) Ltd. v. ITO [1997] 223 ITR 809 clarified that provisions of section 232(6) of the Act enables the companies to choose and state an appointed date. The date specified in the scheme may be tied to the occurrence of an event or fulfilment of preconditions or meeting of any other conditions as may be agreed upon between the parties to the scheme. 1.3. Ind AS 103 requires the business combination to be accounted as on the acqu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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/consent from industry specific regulator or authorities are applicable. B. No winding up petition/proceeding is pending against the applicant-companies. C. There is no proceeding/investigation pending against the applicant-companies under sections 210-217, 219, 220, 223, 224, 225, 226 and 227 of the Companies Act, 2013. D. The proposed merger is sought to be made under the provisions of sections 230 to 232 of the Companies Act, 2013, and the same if sanctioned by this hon'ble Bench at Hyderabad of the National Company Law Tribunal, will take effect from the April 10, 201....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ompany 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 of arrangement to hand over the possession of books of account and other relevant documents of the transferor companies to the transferee company for the purpose of section 239 of the Companies Act, 2013; 13. The petitioner/transferee company should preserve its books of account and papers and records and shall not dispose of without prior permission of the Central Government in terms of provisions of section 239 of the Companies Act, 2013; 14. The petitioner-companies should ensure statutory compliance with all applicable laws and also on sanctioning of the present scheme the applicant-company shall not be absolved for any of its statutory liability in any manner; 15. The petitio....