TaxTMI 
TaxTMI 
2021 (6) TMI 1031
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.... the entire material on record, this Tribunal passes 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 me....
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....at the 'Transferee Company' had acquired the 'Transferor Company' as a business supportive mechanism for ease of operations since 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; ....
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....hairperson of the aforesaid meeting of the equity shareholders. The quorum for meeting of shareholders shall be 100. C. The Hon'ble Tribunal would be pleased to order for dispensation from 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 Com....
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....ment Finance Corporation Ltd, in re [2017] 85 taxmann.com 368 (NCLT - Mum.)" 13. Similar issue has been dealt with by this Tribunal in Company Appeal (AT) No. 19 of 2021, the Appellants being 'Ambuja Cements Limited' Vs. --- decided on 06.04.2021. 14. 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....
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....prescribed: Provided that such notice and other documents shall also be placed on the website of the company, if any, and in case of a listed company, these documents shall be sent to the Securities and Exchange board and stock exchange where the securities of the companies are listed, for placing on their website and shall also be published in 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 fiv....
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....ustrial and Financial Reconstruction established under section 4 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) shall abate; (e) such other matters including exit offer to dissenting shareholders, if any, as are in the opinion of the Tribunal necessary to effectively implement the terms of the compromise or arrangement: Provided that no compromise or arrangement shall be sanctioned 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 secu....
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....he draft of the proposed terms of the scheme drawn up and adopted by the directors of the merging company: (b) confirmation that a copy of the draft scheme has been filed with the Registrar; (c) a report adopted by the directors of the merging companies explaining effect of compromise on each class of shareholders, key managerial personnel, promoters and nonpromoter shareholders laying out in particular the share exchange ratio, specifying any special valuation difficulties; (d) the report 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 ....
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.... of a company towards its creditors. 5. Directions at hearing of the application.- Upon hearing the application under sub-section (1) of section 230 of the Act, the Tribunal shall, unless it thinks fit for any reason to dismiss the application, give such directions as it may think necessary in respect of the following matters:- (a) Determining the class or classes of creditors or of members whose meeting or meetings have to be held for considering the proposed compromise or arrangement; or dispensing with the meeting or meetings for any class or classes of creditors in terms of sub-section (9) of section 230; (b) 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 prese....
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....gs, if the Bench is satisfied in all respects. Section 232 is a specific provision carved out by the Legislature when both conditions maintained in clauses (a) and (b) of sub- Section (1) of Section 232 are met. In the instant case the amalgamation sought for is between a Wholly Owned Subsidiary and the Holding Company. The point which needs to be noted is whether such an arrangement alters the rights of the Stakeholders of the Company; whether such an amalgamation has any bearing internally on Creditors/Members of both the Companies; whether not holding the subject meeting would amount to violation of any of the provisions of the Companies Act, 2013; whether the Tribunal can exercise 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 arrangem....