TaxTMI 
TaxTMI 
2021 (12) TMI 1535
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....ateway East India Private Limited (hereinafter referred to as the "First Petitioner Company" or "Transferor Company 1"), Gateway Distriparks Limited (hereinafter referred to as the "Second Petitioner Company" or "Transferor Company 2 /Transferee Company 1") and Gateway Rail Freight Limited (hereinafter referred to as the "Third Petitioner Company" or "Transferee Company 2") and their respective shareholders ("Scheme"). The said Scheme provides for the amalgamation (merger by absorption) of the First Petitioner Company with the Second Petitioner Company, and thereafter, amalgamation (merger by absorption) of the Second Petitioner Company with the Third Petitioner Company. 4. The Petitioner Companies are a part of the same group of companies. The First Petitioner Company is engaged in the business of operating a container freight station at Vishakhapatnam. The Second Petitioner Company is an integrated inter-modal logistics facilitator and operates container freight stations at Navi Mumbai, Chennai and Krishnapatnam. The Third Petitioner Company is inter alia a private container train operator and engaged in the business of providing intermodal rail transportation service for EXIM....
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....l resources of the Companies, thereby contributing to the future growth of the merged entity; 3.6 Consolidating and improving the internal systems, procedures and controls will also bring greater management and operational efficiency due to integration of various similar functions presently being carried out in each individual entity within the group such as information technology, human resources, finance, legal and general management, and this will lead to the organization becoming more efficient and capable of responding swiftly to volatile and rapidly changing market scenarios; 3.7 Simplicity in working, reducing various statutory and regulatory compliances and related costs, which presently have to be duplicated in the Companies, reduction in operational and administrative expenses and overheads, better cost and operational efficiencies and it would also result in coordinated optimum utilization of resources; 3.8 The Transferor Companies and the Transferee Company 2 operate businesses that complement each other and therefore can be conveniently combined for mutual benefit of the shareholders of the Companies; and 3.9 This Scheme shall be in ....
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.... of INR 10 (Indian Rupees 10) each, for 1 (One) fully paid equity share of INR 10 (Indian Rupees Ten) each held by such shareholder in Transferor Company 2 as on the Record Date. Upon this Scheme becoming effective, the Board of the Transferor Company 2 shall, on the Record Date, provide to Transferee Company 2, a list containing particulars of equity shareholders of the Transferor Company 2 as on the Record Date, along with their respective entitlement to the fullypaid equity shares of the Transferee Company 2, pursuant to this Scheme. " 8. Similarly, the Scheme also provides for Dissolution of the First Petitioner Company (Clause 18) and Second Petitioner Company (Clause 30) respectively "18. DISSOLUTION OF THE TRANSFEROR COMPANY 1 On the Effective Date, the Transferor Company 1 shall be automatically dissolved without being wound up. Consequently, the name of Transferor Company 1 shall be struck off from the records of the relevant Registrar of Companies. Upon this Scheme becoming effective and after dissolution of the Transferor Company 1, the Board of Directors of the Transferee Company 1 or any committee thereof is hereby authorized to take all s....
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....listed and admitted to trading on the Wholesale Debt Market Segment of BSE Limited, where the NCDs are currently listed." 10. The Scheme also provides for a change of name of the Third Petitioner Company (Clause 32), which is reproduced below: "32. CHANGE OF NAME OF THE TRANSFEREE COMPANY2 Upon this Scheme becoming effective, the name of Transferee Company 2 shall be deemed to have been changed from "Gateway Rail Freight Limited" to "Gateway Distriparks Limited" or "Gateway Rail Distriparks Limited", or such other name which is available and approved by the Registrar of Companies, in accordance with Sections 13 and 14 of the Act and read with other relevant provisions of the Act, as applicable. The MOA and AOA of the Transferee Company 2 shall, without any further act, instrument or deed, be and stand altered, modified and amended, and the consent of the shareholders of the Companies to the Scheme shall to be sufficient compliance for the purposes of effecting the name change and that no separate act, procedure, resolutions and registration fees shall be required to be followed under the Act. 11. The Learned Counsel for the Petitioner Companies submits that ....
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....sidered by the Hon'ble NCLT are as under: - (a) In addition to compliance ofAS-14 (IND AS-103), the transferee Company shall pass such accounting entries which are necessary in connection with the scheme to comply with other applicable Accounting Standards such as AS-5 (IND AS-8) etc; (b) As per Part-A-Definitions Clause 5(5.1.5 & 5.1.6), 5(5.1.10) & 5(5.1.18) of the Scheme. "Appointed Datel" means opening of business hours on I April 2020, as assented to and approved by the Board of Directors of the Transferor Company I and Transferee Company I or such other date as may be directed by the NCLT or other Appropriate Authority, as may be applicable, being the date from which the provisions of Part C of this Scheme shall become operational; "Appointed Date 2" means opening of business hours on 1 April 2020, as assented to and approved by the Board of Directors of the Transferor Company 2 and Transferee Company 2 or such other date as may be directed by the NCLT or other Appropriate Authority, as may be applicable, being the dale from which the provisions of Part D of this Scheme shall become operational immediately after giving effect to the ama....
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....uthorities which are likely to be affected by Amalgamation. Further, the approval of the scheme by this Hon'ble Tribunal may not deter such authorities to deal with any of the issues arising after giving effect to the scheme. The decision of such Authorities is binding on the Petitioner Company(s). (f). Petitioner Companies have to undertake to comply with section 232(3) (i) of the Companies Act, 2013 where the transferor company is dissolved, the fee, if any, paid by the transferor company on its authorised capital shall be set-off against any fees payable by the transferee company on its authorised capital subsequent to the amalgamation and therefore, petitioners to affirm that they comply the provisions of the section. (g). The Petitioner Companies may be directed to submit undertaking that the petitioner company shall ensure compliance of all provisions of the Income Tax Act, 1961 including provisions of section 2(1B) of the Income Tax Act. (h). Since the Transferor Company -2/Transferee Company Gateway Distribparks Limited, limited by shares, is used on Bombay Stock Exchange and the National Stock Exchange, the Petitioner Company be directe....
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.... 133 of the Act read with the Companies (Indian Accounting Standard) Rules, 2015 as may be amended from time to time, in its books of accounts. In this regards it is stated that in Indian Accounting Standard (Ind-A5) 103 - prescribes application of pooling of Interest Method to account for common control business Under this method Any difference, whether positive or negative, shall be adjusted against the capital reserves (or "Amalgamation Adjustment Deficit Account" in some cases). In view of the above it is submitted that the difference so credited to "Capital Reserve arising out of Amalgamation " shall not be available for distribution of dividend and other similar purposes. (m). As per Part-D Clause 26 (26.1 to 26.3) of the Scheme (Aggregation And Increase of Authorized Share Capital of Transferee Company 2); In this regard it is submitted that the transferee company to comply with the provisions of Section 13, Section 61, Section 64 and Section 232(3) (i) of the Companies Act, 2013 further if any stamp duty is payable the same should be paid in accordance with applicable laws of the State; (n). Asper Part D Clause 32(32.1 to 32.3) of the Scheme, (Cha....
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....ny will be listed after sanction of the Scheme. (q). As regards the Income Tax Department letter dated 03-09-2021 indicated at para 25 above, under the head - Income Tax letter, it is submitted that the Petitioner Companies be directed to mention all the facts in this regard about Income Tax Department letter (clarification/evidence) and explain about the queries made therein, before approval of the Scheme. However, as per the Financial Statement as at 31-03-2021 the Transferor Company No. 2 / Transferee company No I i. e. Gateway Distriparks Limited is having Income Tax Liabilities ofRs.271.96 Lakh (Nil in the Financial Year 2019-20). In this regard the Petitioner Companies be directed to undertake to discharge the Income Tax liabilities before approval of the Scheme. Further, the Income Tax Department be heard in the matter before approval of the Scheme. (r). In view of the observation raised by the ROC Mumbai mentioned at para 27 above, Hon'ble NCLT may pass appropriate orders/orders as deem fit. However, as regard to observation 3 & 4 of the ROC, Mumbai report, the Petitioner Companies may be directed to place on records that how the Transferee Company sha....
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....f the shareholder of the Second Petitioner Company was held on 28 September 2021, whereas the Scheme was duly approved by 362 equity shareholders (in number) of the equity shareholders holding 99.9982% (in value) of the equity shares who have participated through postal ballot including remote e-voting and e-voting during the meeting. The Petitioner Companies have obtained consents of 100% of their respective secured creditors. Vide Order dated 28 July 2021 passed in the captioned Company Application, this Hon'ble Tribunal was pleased to dispense with meetings of the unsecured creditors of the Petitioner Companies and directed notices be issued in terms of the said Order and public advertisement to be made. The Petitioner Companies have complied with the same, and necessary compliance report has also been filed. None of the unsecured creditors of the Petitioner Companies have objected to the Sch till date. d. As far as the observations made in paragraph IV (d) of the Report of the Regional Director is concerned, the Petitioner Companies confirm that the Scheme enclosed to the Company Application and Company Petition are one and the same and there is no discrepanc....
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....ction 55 of the Companies Act, 2013 and FEMA Regulations / RBI Guidelines, to the extent applicable. j. As far as the observations made in paragraph IV (j) of the Report of the Regional Director is concerned, the Petitioner Companies state that there is no legal requirement for an NOC / approve from the Competition Commission of India (CCI) to the Scheme, inter alia, for the reasons more specifically set out in the Affidavit dated 24 November 2021 filed by the Petitioner Companies, in response to the report filed by the Regional Director. k. As far as the observations made in paragraph IV (k) of the Report of the Regional Director is concerned, the First Petitioner Company submits that the accounting treatment provided under the Scheme is in accordance with applicable law. The First Petitioner Company further undertakes to comply with the Indian Accounting Standards to the extent applicable. The First Petitioner Company further undertakes that the difference credited to the "Capital Reserve arising out of Amalgamation" will not be available for distribution of dividend and other similar purposes. l. As far as the observations made in paragraph IV (l....
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....der or regulators. It is submitted that this is a just and fit case for this Hon'ble Tribunal to grant sanction to the change of name as provided for in the Scheme and no prejudice will be caused to any of the stakeholders or regulators. The Petitioner Companies undertake to comply with the applicable procedural requirements, including fillings of requisite forms with the Registrar of Companies in respect of the proposed name change in accordance with law. o. As far as the observations made in paragraph IV (o) of the Report of the Regional Director is concerned, the Petitioner Companies undertake to comply with the provisions of Section 13 of the Companies Act, 2013 to the extent applicable and to file necessary forms with the Registrar of Companies along with payment of the requisite fees as required under law. p. As far as the observations made in paragraph IV (p) of the Report of the Regional Director is concerned, the Petitioner Companies undertake that subsequent to the sanction of the Scheme, they shall take such steps and efforts as are necessary to seek listing of the shares of the Third Petitioner Company as contemplated under the Scheme. q. ....
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....ted 25 November 2021 reiterating its concerns as to para IV(n) and left it to this Hon'ble Tribunal to pass appropriate orders as deemed fit on merit in the matter as far as paras IV (q) and (r) of its report are concerned. The Regional Director has not raised any other objections or dealt with any other observations set out above and dealt with in the Affidavit dated 24 November 2021 filed by the Petitioner Company in response to the report of the Regional Director. The Counsel for the Petitioner Company submits that it is apparent that the Regional Director is satisfied with the responses provided. 18. Further, the Official Liquidator vide his Report dated 22 November 2021 filed with the Hon'ble Tribunal, submits that the affairs of the First Petitioner Company and the Second Petitioner Company have been conducted in a proper manner. No objections have been raised with respect to the Scheme. 19. From the material on record, the Scheme annexed as Exhibit A-I to the Company Petition appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy. 20. Since all the requisite statutory compliances have been fulfill....