TaxTMI 
TaxTMI 
2021 (2) TMI 460
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....ent of the NCLT, Kochi Bench, the matter was transferred to this Bench and re-numbered it as TCAA 4&5/KOB/2019. This Bench also issued notice to the parties and they entered appearance. 3. The brief facts leading to the case are as under: TCAA/4/KOB/2019 has been filed by M/s Hotel City Plaza Private Limited and TCAA/5/KOB/.2019 has been filed by M/s Trivandrum Apollo Towers Private Limited under Sections 391 to 394 of the Companies Act, 1956 seeking the following reliefs: (a)That the said arrangement embodied in the Annexure C Scheme may be sanctioned by this Hon'ble Court with or without modification(s), and declare the same to be binding on Petitioner Company and the Transferee Company, Trivandrum Apollo Towers Private Limited, and their respective shareholders and creditors; (b) That on the Scheme becoming effective, the Petitioner Company (Hotel City Plaza Private Limited) shall stand dissolved without being wound up; (c) That the Petitioner Company shall, within 30 days from the date of receipt, cause the certified copy of the order sanctioning the Scheme to be delivered to the Registrar of Companies, Kerala, for registration and upon such....
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....s of Rs. 1000/- (Rupees One Thousand only) each, out of which 42,769 equity shares are subscribed and fully paid up. The accounts of the Petitioner Company have been audited up to March 31st, 2015. 7. Subsequent to the date of the aforesaid accounts i.e., March 31, 2015, the Ist Petitioner Company has issued 6973 compulsory convertible debentures of aggregate value Rs. 69,73,000/- Rupees sixty-nine lakhs seventy-three thousand only) to 15 individuals. Other than that, there has been no other substantial change in the financial position of the 1st Petitioner Company save those arising or resulting from the usual course of business. Subsequent to the date of the aforesaid accounts i.e., March 31, 2015, the 2nd Petitioner Company has issued 100,952 compulsory convertible debentures of aggregate value Rs. 10,09,52,000/- Rupees ten crores nine lakhs fifty two thousand only) to 57 individuals. Other than that, there has been no other substantial change in the financial position of the 1st Petitioner Company save those arising or resulting from the usual course of business. 8. The Transferor and Transferee Companies have been formed with the same object of establishing and running h....
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....ll the shareholders and creditors of the Transferor Company and the Transferee Company, who would continue to be associated with the Transferee Company. The Transferee Company would have better financial viability and clearer focus, which would be in the interest of all the shareholders, debenture holders and creditors including the shareholders, debenture holders and creditors of the Transferor Company. (g)There shall be impetus to and increase in the area of operations of the Transferee Company apart from reduction in costs. (h) The amalgamation shall result in combination of manpower of both the Companies and a single management structure for the Companies. (i)The Combined managerial and technical expertise would enable the Transferee Company to develop a business model that would be competitive and cogent. (j)The merger and vesting of the Transferor Company with the Transferee Company is in the interest of shareholders, debenture holders, creditors, employees, customers and all stakeholders, as the same would enable a focused business approach with maxim1zation of benefits to all stakeholders. 10. At a meeting of the Board of Directo....
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.... a detailed enquiry is to be conducted for which the companies should produce certain documents such as Books of accounts, Register of Members, Share Transfer Register, Register of Share Certificate etc. for verification. In the report dated 25th February, 2020 it is stated that even though the Registrar of Companies sought the aforesaid documents, the companies have not produced the documents and without verifying the documents, it is not possible to file a final report in the matter. 13. In the report of ROC dated 17.9.2020, it is stated that during the year 2013-14, the transferor company has accepted several deposits from as many as 100 members including the Directors. The transferor company had shown in the record that 63 more persons from whom the deposits were accepted as having become members from 13.9.2013 to 31.3.2014. The transferor company had manipulated the records to reflect that the amount received from these 63 persons as amounts reived from the members with a view to escape from the violations of Section 58A of the Companies Act, 1956. On verification of the records, it is found that the Transferor company has filed two(2) PAS-3 forms on 26.8.2014 for allotment....
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....ch is in violation of Section 74(1)(b) of the Companies Act, 2013. In the One time DPT-3 filed by the transferor company, they have not furnished the required information specially in respect of the deposits received and retained by the Transferor company from the shareholders since 1.4.2014 to 31.3.2019. This would also attract violation of Section 74. Since the amount of outstanding unsecured loans/deposits received is over Rs. 14 crores as compared to the share capital of around Rs. 2.5 crores, it is clearly a material misstatement leading to violation of Section 448 of the Companies Act, 2013 which attracts punishment for fraud under Section 447. It is also stated that similar violations were committed by the Transferee company also. Hence the Regional Director objected to the scheme of amalgamation. Hence the Registrar of Companies prayed for denial of the approval of Scheme of Amalgamation of the above two companies. 14. The applicants filed a counter statement to the report of Registrar of Companies stating as under:- (a) Between 01.4.2014 and 31.3.2015, the transferee company availed unsecured loans totalling Rs. 77,00,000/-. Out of the total unsecured loans of ....
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....nce of Deposits) Rules, 2014, such alleged violations are not valid grounds for objecting the proposed Scheme of Amalgamation. Hence they prayed for sanction of the proposed Scheme of Amalgamation and to pass such other orders that may be necessary to ensure that the Scheme shall be effectively carried on. 17. The petitioners have referred to a decision of the Hon'ble Supreme Court in Miheer H Mafatlal Vs. Mafatlal Industries reported in 1997(1) SCC 579 and has stated that the approval of the Scheme of Amalgamation cannot be held hostage to the apparent findings of the Regional Director in a report such as the one filed before this Tribunal. 18. This Tribunal heard the arguments advanced by Shri Pranoy Harilal, learned counsel for the petitioners/applicants and gone through the report submitted by the Registrar of Companies, Kerala. The Registrar of Companies has stated that the Regional Director, Ministry of Corporate Affairs, who is the competent authority in the matter, has strongly objected to the Scheme of amalgamation submitted by the petitioner companies for the reasons that the companies have violated Section 74(1)(b) of the Companies Act, 2013 by retaining amounts of....
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....was no requirement to disclose the details of the money accepted from the Directors in the Board's report. However, they stated that an inadvertent omission occurred on the part of the company which resulted in the non-disclosure of the details of loans received from the Directors and that the company has not accepted any deposits within the meaning of term as defined under Rule 2(1)(c) of the Companies (Acceptance of Deposits) Rules, 2014. 19. In order to see whether on the basis of the objections raised by the Regional Director, Ministry of Corporate Affairs, pointing out various lapses on the part of the petitioner companies, this Tribunal refers to a decision of the coordinate Bench of this Tribunal at Mumbai in the case of UFO Moviez India Limited and another - C.P. (CAA) No./1920/MB/2018 in C.A. (CAA) No. 120 OF 2018, wherein even though the facts are different, the question whether based on the report of the Regional Director, the relief for sanction of amalgamation can be rejected has been answered. The Mumbai Bench in that case held as under:- "It is not that this Bench is against any business combinations, mergers or any proposition that would make the investo....