TaxTMI 
TaxTMI 
TaxTMI 
2021 (4) TMI 491
X X X X Extracts X X X X
X X X X Extracts X X X X
....nsecured Creditors of the Appellant Company. 3. He submitted that the Appellant filed the Petition before the Learned NCLT Praying the Bench to dispense with the conduct of meetings of the Equity Shareholders and Creditors of the Appellant Company and sought necessary directions to be issued in the matter. 4. Learned Counsel for the Appellant submitted that the Appellant Company was incorporated on 20.10.1981 under the provisions of the Companies Act, 1956 and status of the Appellant Company was changed from Private to Public Ltd. Company. He submitted that the Appellant Company is a Public Ltd. Company with its Equity shares listed on Bombay Stock Exchange Ltd., National Stock Exchange of India Ltd. and Luxembourg Stock Exchange. 5. While so a scheme of Merger of 'DIRK India Pvt. Ltd.' (Amalgamating Company) with the Appellant Company (Amalgamated Company) under Section 230 of the Companies Act, 2013 was approved by the Board of Directors. As per the said Scheme the 'DIRK India Pvt. Ltd'.(Amalgamating Company) i.e. Transferor Company amalgamates with Appellant Company i.e. Transferee Company. 6. Learned Counsel for the Appellant submits that the Transferor Company filed an App....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pany (Transferee Company). 10. Learned Counsel submitted that the Authorised Share Capital of the Appellant Company as on 31.12.2018 is Rs. 8000 Crores and the Preference Shares are Rs. 150 Crores. The issued, subscribed and paid up Capital of the Appellant Company is Rs. 397.13 Crores. 11. It is submitted that the transferor Company was incorporated on 29.05.2020 under the provisions of the Companies Act, 1956 as a Private Ltd. Company in the State of Maharashtra. Therefore, the Transferor Company filed Application before the Learned NCLT, Mumbai seeking dispensation with the meetings of the Secured and Unsecured Creditors and Equity Shareholders of the Company. The Equity Shares of the Transferor Company are not listed on any Stock Exchange, the entire Share Capital of the Transferor Company is held by the Appellant Company. The Transferor Company is a 100% a subsidiary of the Appellant Company. As on 31.03.2019, the authorised share capital of the Transferor Company is Rs. 3,50,00,000/-. The issued, subscribed and Paid up capital is Rs. 2,07,53,830/-. It is submitted that there are no existing commitments, obligations or arrangements by the Transferor Company. 12. The main ob....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Appellant Company and thereby the entire share capital of the transferor Company is held by the Appellant Company. Further, the Hon'ble Tribunal failed to appreciate the fact that Assets and Liabilities of the transferee Company are already reflected in the Balance Sheet of the Appellant Company and the Appellant Company would not incur any Liabilities post effectiveness of the scheme. 18. Learned Counsel further submitted that no new shares are being issued by the Appellant Company and the scheme would not result in dilution of the shareholding of the Appellant Company. 19. The Learned Counsel submitted that the first essential requirement is the existence of the proposal for compromise or arrangement in case like the present one. The Companies need not propose the meeting with the Members or Creditors as held by the Hon'ble Bombay High Court and various Benches of the NCLT's. 20. In support of his submissions he relied upon the Judgment of the Hon'ble Bombay High Court in the matter of 'Mahaamba Investment Ltd.' vs. 'IDI Ltd.' (2001) SCC Online Bom 1174. 21. In view of the Submissions as made the Learned Counsel prayed this Tribunal to dispense with the meeting of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e net worth of Appellant Company post merger will be Rs. 22,714.77 crores. From the perusal of the certificate issued by the Chartered Accountant the net worth of the Appellant Company is positive. 27. From the pleadings it is seen that the Transferor Company filed an Application bearing no. CA (CAA) 753 of 2020 before the Learned NCLT, Mumbai and the Learned NCLT vide order dated 12.03.2020 dispensed with the meetings of the Equity Shareholder and Unsecured Creditors. However, as stated Supra the Transferor Company registered in the State of Maharashtra therefore, the Transferor Company filed its Application before the Learned NCLT, Mumbai having a territorial Jurisdiction. It is also stated in the pleadings that the rights of Secured and Unsecured Creditors are not affected. There is no compromise or arrangement with them. As stated Supra, there are no Secured Creditors of the Appellant Company. However, there are Unsecured Creditors of the Appellant Company to the value of Rs. 1108 Crores. Learned Counsel for the Appellant submitted that as per Section 179(3(i) of the Companies Act,2013 the Board of Directors has powers to exercise including the approval of amalgamation, merger....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the transferee company is not necessary. The Learned Counsel for the Appellant relied upon the Judgment and submitted that since the Transferor Company had already filed an Application before the Hon'ble NCLT, Mumbai and the Hon'ble NCLT, Mumbai allowed the Application by dispensing with the meeting of shareholders and creditors. He submitted that as per the above Judgment it is not necessary even to file a separate Application by the Transferee Company which is a 100% holding of its subsidiary i.e. Transferor Company. The Learned Counsel also relied upon the Judgment of the Hon'ble High Court of Bombay in the matter of 'Eurokids India Pvt. Ltd.' (C.S.D. No. 911 of 2014) dated 19.12.2014. 32. The Hon'ble High Court also held that filing of separate Application under Section 391 and 394 of the Companies Act, 1956 by the transferee Company was dispensed with. The relevant paragraph is reproduced here under: "The Applicant Company is wholly owned subsidiary of the Transferee Company and there is no re-organization of share capital of the Transferee Company and no new shares are being issued by the Transferee Company as all shares will be cancelled as per Clause 5 of the Scheme and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hareholders are not affected by the present Scheme and therefore, no meeting of the Equity Shareholders of the Applicant Transferee Company is required to be convened. In view of the given facts, this Bench is of the view that there is no requirement to convene and hold the meeting of the Equity Shareholders of the Applicant Transferee Company and accordingly, the meeting of Equity Shareholders of the Applicant Transferee Company is hereby dispensed....... 17. Considering the averments as mentioned above and having considered the entire facts on record that both the Transferor Companies are wholly owned subsidiaries of the Applicant Transferee Company and as no compromise is offered by the Applicant Transferee Company under the Scheme of Amalgamation to the creditors and considering the fact that the net worth of the Companies including the Applicant Transferee Company is positive, it is deemed appropriate to order that meetings of the Secured Creditors (including secured debenture holders) and Unsecured Creditors (including unsecured debenture holders) of the Applicant Transferee Company are not required to be held and are hereby dispensed with." 34. We have carefully gone thro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rom the one taken by the earlier Bench, Propriety demands that it should place the matter before the President of the Tribunal so that the case is referred to a larger Bench, for which provision exists in the Act itself." "36. In this behalf, the following observations by a three- Judge Bench of this court in Sub- Inspector Rooplal v. Ltd. Governor are quite apposite: (SCC p. 654, para 12) "12. At the outset, we must express our serious dissatisfaction in regard to the manner in which a coordinate Bench of the Tribunal has overruled, in effect, an earlier judgment of another coordinate Bench of the same Tribunal. This is opposed to all principles of judicial discipline. If at all, the subsequent Bench of the Tribunal was of the opinion that the earlier view taken by the coordinate Bench of the same Tribunal was incorrect, it ought to have referred the matter to a larger Bench so that the difference of opinion between the two coordinate Benches on the same point could have been avoided. It is not as if the latter Bench was unaware of the judgment of the earlier Bench but knowingly it proceeded to disagree with the said judgment against all known rules of precedents. Precedents w....