TaxTMI 
TaxTMI 
2022 (10) TMI 1324
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....ech Private Limited (Transferee Company/ "Second Petitioner Company") and their respective Shareholders; 4. The Learned Counsel for the Petitioner Companies states that the First Petitioner Company and the Second Petitioner Company are both engaged in the business of Information Technology (IT) and computer software services and are 100% export-oriented undertakings based in Special economic Zones (SEZ) in India. 5. The Learned Counsel for the Petitioner Companies further submits that the rationale for the Scheme is as under: a. The consolidation of the businesses and the management resources/ assets of both the Companies will enable the consolidated entity undertake the said business through combining and pooling of resources besides creating a stronger asset base. b. This Scheme of merger would result in consolidation of business of the Transferor Company and the Transferee Company in one entity and all the shareholders of the merged entity will be benefited as a result of the merger of the business/asset base and availability of a common operating platform. c. The merger of the Transferor Company with the Transferee Company will also provide an o....
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....of AS-14 (IND AS-103), the Petitioner Companies 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. In response to the said observation in paragraph IV (a), the Transferee Company undertakes that in addition to the accounting treatment given in the Scheme, 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. The Representation appears to be satisfactory. IV (b) The Petitioners under provisions of section 230(5) of the Companies Act, 2013 have to serve notices to concerned authorities which are likely to be affected by Compromise or arrangement. 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). With reference to the observation set out in para- graph IV (b) of the Report of Regional Director is concerned, the Petitioner Companies u....
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....any have to undertake to comply with section 232(3)(i) of 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 there- fore, petitioners to affirm that they comply the pro- visions of the section. With reference to the observation set out in para- graph IV (e) of the Report of Regional Director is concerned, the Petitioner Companies undertake that the fee payable by the Transferee Company shall be in compliance with the provisions of Section 232(3)(i) of the Companies Act, 2013. The Representation appears to be satisfactory. IV(f) As per Clause 13 & 14 and of the Scheme, The difference between the share capital of the Transferor Company and the aggregate face value of the equity shares of the Transferee Company issued and allotted by it to the members of the Transferor Company pursuant to the Scheme shall be adjusted in the capital reserve account. In case of any differences in accounting policies between the Transferor Company and the Transferee Company, th....
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....capital reserve account. The statutory auditors of the Transferee Company vide their certificate dated 12-04-2021 certified that the accounting treatment specified in the Scheme is in conformity with the ac counting standards pre scribed under Section 133 of the Companies Act, 2013, a copy of which has been annexed as Annexure - J to the Petition. Further, the Petitioner Companies undertake that the surplus, if any, credit ed to capital reserve by the Transferee Company as above shall not be available for distribution of dividend. The Representation appears to be satisfactory. IV(h) Clause 18 of the Scheme :- MODIFICATIONS TO THE MEMORANDUM AND ARTICLES OF ASSOCIATION OF THE TRANSFEREE COMPA NY Upon coming into effect of the Scheme and subject to the provisions of Section 13 and other applicable provisions of the Act and further subject to the approval of the Registrar of Companies, Mumbai, Maharashtra and other approvals, if any, the name of the Transferee Company shall stand changed to "Indus Valley Partners (India) Private Limited " and the same shall be substituted for the existing name wherever it appears in the Memorandum of Association and Articles of Association of....
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.... and highly reputed identity amongst its international clients as a prominent Indian Company in the IT and software business and has various registrations, licenses and contracts in India and more particularly outside India which contain the existing name of the Transferor Company. Hence, it is essential to retain the existing name of the Transferor Company after the pro posed amalgamation to avoid any kind of disruption to the on-going business of the Transferor Company. This will also not create any confusion with any authority since there will be a fresh certificate which shall be obtained from the registrar of companies stating the change of name. Also, the CIN of the Transferee Company will remain the same. Further, the PAN of the Transferee Company as mentioned in communication to all authorities including Income Tax, GST, MCA, etc. will remain the same. Further, it is clarified that pursuant to the name change as aforesaid, the Transferee Company will indicate the earlier name also by mentioning the words "earlier known as..." next to the new name to all the authorities till the next 3 years while intimating the name change to avoid any confusion. The proposed name change to....
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....ent Private Limited (LDMPL) and Helicon Infrastructure Private Limited (HIPL) Lodha Corporate Trustee ship Private Limited (LCTPL) with Eirian Consulting Private Limited (ECPL) by way of Order dated 10 January 2019. v. The counsel for the Petitioner Companies further submit that besides the above referred judicial precedents NCLT Mum bai bench has allowed the name change of the Transferee Company to that of the Transferor Company in CP(CAA)/11/MB IV/2021 IN CA(CAA)/1064/MB IV/2020 in the matter of Scheme of Amalgamation of Bharat Serums and Vaccines Limited and BSV Life Private Limited with Aksipro Diagnostics P Limited by way of Order dated 2 August 2021. The Representation appears to be not satisfactory. IV (i) STATUS OF ROC RE- PORT :- ROC, Mumbai Report dated 02.12.2021 has interalia mentioned that there are no prosecution, no technical scrutiny, no inquiry, no inspection and no complaints pending against Petitioner Companies. Further mentioned that :-. 1.Interest of the Creditors should be protected. Hon'ble Tribunal may consider the observations pointed out by ROC, Mumbai in their report and decide the matter on merits. In response to the said observatio....
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....ions of the aforesaid 'RBI Notification' that will be complied with by the Transferee Company. The allotment of the equity shares by the Transferee Company to the equity shareholders of the Transferor Company in terms of this Scheme shall be made in accordance with the provisions of applicable laws including the applicable RBI Notification and accordingly the Company is not required to procure a specific approval from the RBI in regard to allotment of equity shares to non-resident equity shareholders. Transferee Company shall, if and to the extent required, apply for and obtain any approvals from concerned regulatory authorities for the issue and allotment of Equity Shares to the members of Transferor Company under the Scheme. Under and pursuant to the Scheme, the entitlement for fractional shares in the Transferee Company, if any, of the share holders of the Transferor Company shall be round ed off to one share. It shall be deemed that the members of the Transferee Company have also resolved and accorded all relevant consents in terms of the provisions of Section 62 and other applicable provisions of the Act for issue of Equity Shares in terms of this Scheme. It is clarified that ....
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....emption approved by the Board. In the event of the Transferee Company opting to redeem a part of outstanding NCRPS, such part redemption shall be made to all the holders of NCRPS on proportionate basis. (b) be entitled for dividend at the rate of 10% per annum on non cumulative basis on the face value of the NCRPS, It is clarified that dividend, if any, declared by the Transferee Company on the NCRPS for the financial year during which the NCRPS are allotted by the Transferee Company in terms of clause 12.1 above shall be paid by the Transferee Company for the whole of the said financial year irrespective of the date of allotment. (c) be entitled to voting rights in accordance with the provisions of Section 47 of the Companies Act, 2013. (d) carry a preferential right over the Equity Shares with respect to payment of dividend and repayment in the case of winding up or repayment of capital but shall not entitle the holders thereof a right to participate in sur plus fund and/or surplus assets or profits in the event of winding up, and (e) be subject to and governed by the provisions of section 55 and other applicable provisions of the Act, other applicable Legislations an....
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....ns of applicable laws including the applicable RBI Notification and accordingly the Company is not required to procure a specific approval from the RBI in regard to allotment of NCRPS to non-resident equity shareholders. The Hon'ble NCLT may direct the Petitioner Companies to insert clause 12 under the consideration along with clause 8 as both the clauses speaks about the considerations. The Hon'ble NCLT may direct the Petitioner Companies to offered bonus shares to both new and existing shareholder. In response to the said observation in paragraph IV (j), Petitioner Companies submit that ;- (i) the Transferor Company and the Transferee Company are both closely held companies and owned by the same promoter group. A Scheme of arrangement has been proposed between both the said commonly owned Companies and their respective shareholders duly agreed to and ap proved by the Board of directors and the share holders of both companies for amalgamation of the Transferor Company with the Transferee Company in consideration of issue of equity shares by the Transferee company to the equity shareholders of the Transferor Company in the ratio and other terms set forth in clause 8 of the Schem....
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....y the Petitioner Companies are hereby accepted. 12. The clarifications and undertakings given by the Petitioner Companies in response to the said Report of the Regional Director are accepted by this Tribunal. Further this Bench hereby directs the Regional Director to care- fully look into the compliances and thereafter the proposed Scheme will be enforceable and effective. 13. The GST authority, Noida U.P in response to the notice of hearing of the Petition has vide their letter dated 24-5-2022 and their annexed report given details of cases pending adjudication before the CESTAT authority at Allahabad relating to disputed service tax matters of the Transferor Company. The Counsel for the Petitioner Companies submit that the Transferor Company in its affidavit dated 2nd June, 2022 has explained and submitted that (i)the said disputed service tax demand pending adjudication before the CESTAT is a contingent liability and based on certain judicial pronouncements in certain other cases deciding issues/matters similar to is- sues under litigation as above in the case of the Petitioner company in favour of the tax assessee, the Petitioner Company is confident of favourable orders ....