TaxTMI 
TaxTMI 
2021 (6) TMI 1031
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....sses the following order: a. The meeting of the Equity Shareholders of Applicant Transferor Company is hereby dispensed with in View of the consent affidavit annexed as Annexure (page no. 404) of the application. b. The Applicant Transferor Company has no creditors. Hence, convening of meeting of the creditors does not arise at all. c. Separate meetings of the Equity Shareholders, Secured Creditors and Unsecured Creditors of the Gujarat Ambuja Exports Limited, Applicant Transferee Company shall be convened and held on, 22nd day of April, 2021 at 11 a.m. for the purpose of considering and, if thought fit, approving the proposed Scheme of Arrangement, with or without modifications; d. In view of the current pandemic situation, all the meetings of shareholders, Secured and Unsecured creditors of Gujarat Ambuja Exports Limited, Applicant Transferee Company shall be convened and conducted through video conferencing or other Audio-Visual Means. No physical meetings shall be convened. The Applicant Transferee Company shall appoint a Depository and other required agencies to facilitate the conduct of the meetings"..... 3. The facts in brief are that the Appellant Company (her....
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....ce the 'Transferor Company' owns land and building near Kadi (Gujarat) being used as a godown on payment of lease rent. It is stated that the Amalgamation of the business of the Applications that is the 'Transferor Company' and the 'Transferee Company' would result in simplification of the corporate structure and elimination of duplicate corporate procedure. It would also facilitate a consolidation of resources and expertise, reducing the multiplicity of administrative costs. 10. The rationale of the scheme of Amalgamation is as follows: "It is proposed to amalgamate the Applicant Company No. 1 into the Applicant Company No. 2 by this Scheme, as a result of which the shareholders of the Applicant Company No. 1 viz., the following benefits shall, inter alia, accrue to the Appellant Companies: i. Maintain simple corporate structure and eliminate duplicate corporate procedures; ii. Amalgamation shall facilitate combination/consolidation of resources, expertise and energies of Transferor Company with the Transferee Company; iii. Reduction in multiplicity of legal and regulatory compliances and would create economies in administrative costs; iv. Incremental operational an....
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....convening and holding of the meetings of secured and unsecured creditors of the Applicant Transferee Company for considering and if though fit approve, with or without modification the scheme of amalgamation at Annexure "E" to the application, in view of the fact that their rights and are not getting affected in any manner whatsoever. In the alternate The Hon'ble Tribunal would be pleased to direct the Applicant Transferee Company to hold and convene meeting of Secured and Unsecured Creditors on such date, place and time as the Hon'ble Tribunal may order and Mr. Kumar Pal, shall be the Chairman/Chairperson of the aforesaid meeting of the Secured and Unsecured Creditors. The quorum for meeting of secured and unsecured creditors shall be decided by this Tribunal respectively. D. The Hon'ble Court would be pleased to dispense with the requirement of holding of meeting of Equity Shareholders, Secured Creditors and Unsecured Creditors of the Applicant Transferee Company in view of the fact that the scheme of amalgamation does not affect their rights in any manner; E. The Hon'ble Court would be pleased to dispense with the publication of notice in the newspapers and Governmen....
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.... For better understanding of the case, it is relevant to reproduce the Sections 230 and 232 of the Companies Act, 2013 and also the relevant Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 are hereunder:- 'Sec 230 Companies Act 2013 [(1) Where a compromise or arrangement is proposed- (a) between a company and its creditors or any class of them; or (b) between a company and its members or any class of them, the Tribunal may, on the application of the company or of any creditor or member of the company, or in the case of a company which is being wound up, of the liquidator 2[appointed under this Act or under the Insolvency and Bankruptcy Code, 2016, as the case may be,] order a meeting of the creditors or class of creditors, or of the members or class of members, as the case may be, to be called, held and conducted in such a manner as the Tribunal directs. Explanation.-For the purposes of this subsection, arrangement includes a reorganization of the company's share capital by the consolidation of shares of different classes or by the division of shares into share of different classes, or by both of those methods. (2) The company or any other perso....
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....n newspapers in such manner as may be prescribed: Provided further that where the notice for the meeting is also issued by way of an advertisement, it shall indicate the time within which copies of the compromise or arrangement shall be made available to the concerned persons free of charge from the registered office of the company. (4) A notice under sub-section (3) shall provide that the persons to whom the notice is sent may vote in the meeting either themselves or through proxies or by postal ballot to the adoption of the compromise or arrangement within one month from the date of receipt of such notice: Provided that any objection to the compromise or arrangement shall be made only by persons holding not less than ten per cent of the shareholding or having outstanding debt amounting to not less than five per cent of the total outstanding debt as per the latest audited financial statement. (5) A notice under sub-section (3) along with all the documents in such form as may be prescribed shall also be sent to the Central Government, the income-tax authorities, the Reserve Bank of India, the Securities and Exchange Board, the Registrar, the respective stock exchanges, ....
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....ioned by the tribunal unless a certificate by the company's auditor has been filed with the Tribunal to the effect that the accounting treatment, if any, proposed in the scheme of compromise or arrangement is in conformity with the accounting standards prescribed under section 133. (8) The order of the Tribunal shall be filed with the Registrar by the company within a period of thirty days of the receipt of the order. (9) The Tribunal may dispense with calling of a meeting of creditor or class of creditors where such creditors or class of creditors, having at least ninety per cent value, agree and confirm, by way of affidavit, to the scheme of compromise or arrangement. (10) No compromise or arrangement in respect of any buy-back of securities under this section shall be sanctioned by the Tribunal unless such buy-back is in accordance with the provisions of section 68.] (11) Any compromise or arrangement may include takeover offer made in such manner as may be prescribed: Provided that in case of listed companies, takeover offer shall be as per the regulations framed by the Securities and Exchange Board. (12) An aggrieved party may make an application to the Tribu....
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....of the expert with regard to valuation, if any: (e) a supplementary accounting statement if the last annual accounts of any of the merging company relate to a financial year ending more than six months before the first meeting of the company summoned for the purposes of approving the scheme. (3) The Tribunal, after satisfying itself that the procedure specified in sub sections (1) and (2) has been complied with, may, by order, sanction the compromise or arrangement or by a subsequent order.' 'Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 G.S.R.1134(E).- In exercise of the powers conferred by sub-sections (1) and (2) of section 469 read with sections 230 to 233 and sections 235 to 240 of the Companies Act, 2013 (18 of 2013), THE Central Government hereby makes the following rules, namely:- 1. Short Title and Commencement.- (1) These rules may be called the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. (2) They shall come into force with effect from 15th December, 2016. 3. Application for order of a meeting.- (1) An application under sub-section (1) of section 230 of the Act may be submitted in Form no. NCLT-1 (appe....
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....fixing the time and place of the meeting or meetings; (c) appointing a Chairperson and scrutinizer for the meeting or meetings to be held, as the case may be and fixing the terms of his appointment including remuneration; (d) fixing the quorum and the procedure to be followed at the meeting or meetings, including voting in person or by proxy or by postal ballot or by voting through electronic means;' 15. In 'Mahaamba Investments Ltd.' vs. 'IDI Ltd.'. The Hon'ble High Court of Bombay held as follows:- "5. In the present case, having regard to the relevant clauses of the proposed scheme and particularly the provision whereby no new shares are sought to be issued to the members of the transferor company by the transferee company, the scheme will not affect the members of the transferee company. The creditors of the transferee company are not likely to be affected by the scheme in view of the financial position of the transferee company. In paragraphs 13 and 14 of the affidavit in support of the company application, the financial position of the transferor and transferee companies has been set out and which would show that in so far as the transferor company is concerned, it ....
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....cise their discretion when the 'Transferor Company' is a Wholly Owned Subsidiary of the 'Transferee Company' and financial position of the 'Transferee Company' is positive and the merger is not affecting the rights of the Shareholders or the Creditors. 18. The material on record establishes that the 'Transferee Company' is a Wholly Owned Subsidiary of the 'Transferor Company' and there is no issuance of any new shares and therefore there is no reorganization of share capital and consequently no arrangement wherein Shareholders have to compromise with Creditors of the 'Transferor Company'. The documentary evidence substantiates that the net worth of the 'Transferee Company' is definitely positive. 19. We find force in the contention of the Learned Counsel appearing for the Appellants that there are no Creditors in the subsidiary Companies and that the 'Transferee Company' is the only Shareholder of the 'Transferor Company'. 20. This Tribunal has placed reliance in 'DLF Phase IV, Commercial Developers Limited and Ors.' in Company Appeal (AT) No. 180 of 2019 and observed that the scheme would not prejudicially affect the Creditors or Shareholders of the Appellant Company when an Ap....