TaxTMI 
TaxTMI 
2021 (9) TMI 1357
X X X X Extracts X X X X
X X X X Extracts X X X X
....ice of the Transferor Company No. 1 is situated at 4th Floor, Dhaka House, 18/17 WEA, Karol Bagh, New Delhi-110005. 3. That M/s. Ericsson India Global Services Private Limited (hereinafter referred to as the "Transferee Company No. 2") having CIN no. U72200DL2010PTC204192 is a Private Limited company incorporated under the Erstwhile Companies Act, 1956 on 16.06.2010. The registered office of the Transferee Company No. 2 is situated at 4th Floor, Dhaka House, 18/17 WEA, Karol Bagh, New Delhi - 110005. 4. That the present Petition has been jointly filed by the Transferor and Transferee Company. Both the Transferor' and Transferee' Company together are called 'Applicant Company' hereinafter. That the Registered offices of the Companies are in Delhi and therefore, the jurisdiction lies with this Bench. 5. It is averred by the Applicant Companies that the Transferor Company is a wholly owned subsidiary of the Transferee Company. 6. It is seen from the record that the Board of Directors of Transferor Company vide have approved the proposed 'Scheme' on 14.06.2021. The Board of Directors of Transferee Company approved the scheme on 25.06.2021. 7. It i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ay be dispensed with. 14. As regards the meeting of Unsecured Creditors of the Applicant Companies, the Applicant Companies have sought dispensation of the meeting Unsecured Creditors on the grounds mentioned in their averment as reproduced below: "28. It is the Applicant Company 1's prayer that this Hon'ble Tribunal may be pleased to pass directions for dispensing with the requirement of holding and convening a meeting of the unsecured creditors of the Applicant Company 1 to consider the Scheme, for the following reasons: (i) The unsecured creditors referred hereinabove are in the nature of sundry creditors of the Applicant Company in its day to day business, and they would be paid off in the ordinary course of business; (ii) The Scheme is in no manner prejudicial to the interests of the said unsecured creditors; (iii) In terms of the Scheme, no liability of any of the unsecured creditors of the Applicant Company 1 is proposed to be reduced or extinguished; (iv) The net-worth of the Applicant Company 1 as on January 31, 2021 Rs. 23.227 Million (Rupees Twenty Three Thousand Two Hundred Twenty Two Million Only), and the pre-ama....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ibunal in the matter of DLF Phase - IV Commercial Developers Limited in Company Appeal (AT) No. 180 of 2019. (d) Order dated September 5, 2019 delivered by the Hon'ble National Company Law Tribunal, Mumbai Bench, in the matter of Ness Software Services Private Limited in CA(CAA) No. 2629/MB/2019. (e) Order dated February 7, 2020 delivered by the Hon'ble National Company Law Tribunal, Mumbai Bench, in the matter of Wonder Space Properties Private Limited in CA(CAA)/4149/MB/2019. 16. That the Applicant Companies have stated that Post-amalgamation, the net worth of the Transferee Company will be more than its pre-amalgamation net-worth and, therefore, the interest of the creditors of the Transferee Company will not be adversely affected. To support its contention, the Transferee Company has annexed a copy of the Net-Worth Certificate issued by M/s. Shiv & Associates Chartered Accountants, indicating the pre-amalgamation and post-amalgamation Net Worth of the Transferee Company. The scanned copy of the said certificate is reproduced below: 17. Before adjudicating this Application on merits, we feel it necessary to visit the contents of the Additional Aff....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ceeds 10% of the total revenue or 10% of the Net worth of the Transferor Company or the Transferee Company, whichever is less, based on the last audited financial statements of the Company has been considered material." Basing on the aforesaid criteria, the Applicant Companies, have declared investigations pending in the category of (a) Non-Tax Outstanding Investigations or Proceedings, and (b) Tax Outstanding Investigations or Proceedings. 22. Here, we would like to visit the contents of the Section 230(2)(a) of the Companies Act., 2013, which is reproduced below: "230. Power to compromise or make arrangements with Creditors and Members- (1)............. (2) The company or any other person, by whom an application is made under Sub-Section (1) disclose to the Tribunal by Affidavit- (a) All material facts relating to the Company, such as the latest financial position of the company, the latest auditor's report on the accounts of the company and the pendency of any investigation or proceeding against the company;" 23. From the plain reading of the contents of Section 230(2)(a), it is clear that no criteria for considering a particular ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y are willing to welcome an addition of 473 Unsecured Creditors of the Transferor Company is a matter to be viewed and expressly decided by the Creditors of the Transferee Company. Therefore, in our view approval of the unsecured creditors of both the Applicant Companies is needed and cannot be evaded. Hence, it would be wrong to say that no prejudice can ever be caused to any of the creditors if the Scheme is approved without obtaining their explicit consent. 29. That the legislature under Section 230(9) of the Companies Act, 2013 has not made any exception in case of an amalgamation between a holding and a subsidiary company from filing the consent Affidavits of Creditors, nor has it given any explicit power to this Tribunal to dispense with the meeting of the creditors in absence of their consent affidavits in any circumstance. The contents of Section 230(9) of Companies Act, 2013 are reproduced below: "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." 30. Her....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on'ble National Company Law Tribunal, New Delhi NCLT) and such other approvals as required under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013. The said Scheme has also been approved by the Board of Directors of the Transferor Company at its meeting held on June 14, 2021. The Transfero Company is a wholly owned subsidiary of the Transferee Company. Although post-amalgamation net-worth certificate can only be drawn up after the Scheme becomes effective, we have been requested to provide a certificate for the pre-amalgamation and post- amalgamation net-worth of the Transferee Company to be determined on the assumption that the Scheme has been approved by the NCLT based on the standalone, unaudited financial statements available as on January 31, 2021. Accordingly, based on the details outlined in Paras 1 to 6 below. the net-worth referred to above has been determined and is indicated hereinafter Para 6. 1. 2. 3. The Scheme proposes the Appointed Date to be April 1, 2021, and the Effective Date to be the date on which the centified copy of the NCLT's order sanctioning the Scheme is filed by the respective....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... financial statement of the Transferor Company for the period from April 1, 2020, to January 31, 2021, as certified by the management of the Transferor Company; c) A certified copy of the proposed Scheme as approved by the Board of Directors of the Transferee Company at its meeting held on June 25, 2021, and by the Board of Directors of the Transferor Company at its meeting held on June 14, 2021; and d) The information and explanation are given to us in relation to the above. Based on the documents referred to in Para 6 above and the considerations in Paras 1 to 6 above, we certify that had the net worth of the Transferee Company been mathematically determined on January 31, 2021, after considering the effect of the Scheme as referred to above, the pre- amalgamation and post-amalgamation net worth of the Transferee Company would have been Rs. 33.044 Million and Rs. 55,722 Million, respectively as on that date. A statement of computation is annexed to this certificate. The net-worth determined above does not include the Capital Redemption Reserve amounting to Rs. 98 Million (pre-amalgamation) & Rs. 279 Million (post-amalgamation), Capital Re....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h Floor, Dhaka House, 18/17 WEA, Karol Bagh, New Delhi - 110005. ...Applicant Company 2/ Transferee Company Tonal audonac Signatory Document 7 That in terms of Section 230(2) of the Act, it is stated that the provisions of Section 230(2)(a) of the Act have been complied with and the necessary disclosures as stated therein have been made in the Joint Application and the contents thereof shall be read as part and parcel of the present affidavit and the same are not being repeated herein for the sake of brevity. 5. It is submitted that as per Section 230(2)(a) of the Companies Act, 2013, the Applicant Company 1 is required to disclose the investigations against the Applicant Company 1 that are considered as a material fact relating to the Applicant Company 1. The Applicant Company I submits that there are no such investigations pending against the Applicant Company 1, including under Sections 235 to 251 of the Companies Act, 1956 or corresponding notified sections of Companies Act, DIA 2013, i.c., under Sections 210-217, 219, 220, 223, 224, 225, 226 and 227 of the Companies Act, 2013. 6. It is submitted that the schem....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Apte Am S1 No...) c Has solemnly affirmed before mo Doll on That the contents of the ultioavit have been read & ap bined t sim are true & corract to his know 9 AUG 2021 NOTAR Document 10 DETAILS OF MATERIAL INVESTIGATIONS OR PROCEEDINGS THAT HAVE BEEN INSTITUTED AND ARE PENDING AGAINST THE COMPANY AS ON 30th June 2021 We, the undersigned, state that there are no outstanding investigations or proceedings instituted and pending, which has been determined to be material, against the Transferor Company or the Transferee Company, other than as disclosed hereinbelow. AND WHEREIN, materiality has to be determined on a case-by-case basis depending on specific facts and circumstances relating to the information or event. To determine whether a particular event or information is material in nature, the criteria mentioned herein shall be applied. An event or information where the value involved or the impact exceeds 10% of the total revenue or 10% of the Net worth of the Transferor Company or the Transferee Company, whichever is less, based on the last audited financial statements of the Company has been considered material.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eline to be strictly to be adhered to and payment of RS 550/- Crores (Rupees Five hundred and fifty Crores only) be made on or before 30th September 2018. It was also directed that the undertaking that is to be given by the Chairman of the concerned Company shall be given within one week from that day. An amount of INR 550 crores was received by the Company in March 2019 based on the Supreme Court order dated 20th February 2019 in Contempt Petition Number 1838 of 2018, 550 of 2019, and 185 of 2019 in Writ Petition no. 845 of 2018 along with an interest of INR 29.74 Crores, aggregating to an amount of INR. 579.74 Crores concerning the proceedings which were initiated against three Reliance Group Companies by the Company. The Resolution Professional appointed for the Reliance Group Companies under the provisions of the Code sought to claim a refund of the aforesaid amount. However, the applications filed before NCLAT were disposed of vide its order dated 18th September 2019. The three Miscellaneous Applications for the demand of refund of the aforesaid amount paid to the Company are pending before NCLT. The Applications have not been....