2020 (9) TMI 442 - Tri - Companies Law

Approval of Amalgamation Scheme - Sections 230 to 232 of the Companies Act 2013 read with the Companies (Compromises Arrangements and Amalgamations) Rules 2016 and the National Company Law Tribunal Rules 2016 - HELD THAT - Upon considering the consent accorded by the members and creditors of the Petitioner Companies to the proposed Scheme and the affidavits filed by the Regional Director Northern Region Ministry of Corporate Affairs and Official Liquidator there appears to be no impediment in sanctioning the present Scheme Sanction is hereby accorded to the Scheme under Section 230 to 232 of the Companies Act 2013 - Petition disposed off.

Summary

Issues:
1. Approval of Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013.
2. Compliance with meeting dispensation orders.
3. Compliance with publication and notice requirements.
4. Official Liquidator's report and absence of objections.
5. Regional Director's representation and compliance with Section 232(3)(i) of the Companies Act, 2013.
6. Income Tax Department's demands and compliance.
7. Auditor certificates and scheme conformity.
8. Interest of stakeholders and compliance with statutory requirements.
9. Sanctioning of the Scheme under Sections 230 to 232 of the Companies Act, 2013.
10. Dissolution of Transferor Company, transfer of property, rights, interests, and powers to Transferee Company.
11. Transfer of liabilities and duties to Transferee Company.
12. Continuation of proceedings by or against Transferee Company.
13. Employee transfer and service continuity.
14. Delivery of order copy to Registrar of Companies for registration.

Detailed Analysis:

Approval of Scheme of Amalgamation: The petition filed by the Petitioner Companies seeks approval for the Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013. The Scheme outlines the Amalgamation of the Transferor Company with and into the Transferee Company, as per the relevant rules and regulations.

Compliance with Meeting Dispensation Orders: The Petitioner Companies filed a First Motion Application to dispense with the requirement of convening meetings of equity shareholders, secured creditors, and unsecured creditors. The NCLT, Delhi Bench, dispensed with the meetings based on the joint application moved under Sections 230-232 of the Companies Act, 2013.

Compliance with Publication and Notice Requirements: The Petitioner Companies were directed to carry out publications in newspapers and serve notices to relevant authorities. Affidavits were filed affirming compliance with these directions, including newspaper publications and serving notices to authorities.

Official Liquidator's Report and Absence of Objections: The Official Liquidator's report confirmed no complaints against the proposed scheme of Amalgamation, indicating no objections from interested parties.

Regional Director's Representation and Compliance with Section 232(3)(i): The Regional Director raised no objections against the Scheme but requested compliance with Section 232(3)(i) of the Companies Act, 2013. The Transferee Company filed an affidavit undertaking compliance with the specified provision.

Income Tax Department's Demands and Compliance: The Income Tax Department reported pending demands for both the Transferor and Transferee Companies. The Transferee Company filed an affidavit detailing the demands and undertook to discharge the final tax liability post the relevant adjudicating authority's order.

Auditor Certificates and Scheme Conformity: Statutory auditors of the Petitioner Companies confirmed that the Accounting Treatment proposed in the Scheme of Amalgamation complies with Accounting Standards notified by the Central Government under Section 133 of the Companies Act, 2013.

Interest of Stakeholders and Compliance with Statutory Requirements: The Petitioner Companies affirmed that the Scheme is in the interest of stakeholders, including shareholders, creditors, and employees. They committed to complying with all statutory requirements.

Sanctioning of the Scheme: Considering the consent of members and creditors, along with the reports and affidavits filed, the Tribunal found no impediment in sanctioning the Scheme under Sections 230 to 232 of the Companies Act, 2013.

Dissolution of Transferor Company and Transfer of Rights: The Tribunal ordered the dissolution of the Transferor Company without winding-up procedures. It directed the transfer of property, rights, interests, powers, liabilities, and duties to the Transferee Company, along with the continuation of proceedings by or against the Transferee Company.

Employee Transfer and Service Continuity: All employees of the Transferor Company were to become employees of the Transferee Company without interruption in service and on terms not less favorable than before.

Delivery of Order Copy for Registration: The Petitioner Companies were instructed to deliver a certified copy of the order to the Registrar of Companies for registration within thirty days. Upon delivery, the Registrar would consolidate the files of both companies accordingly.

Conclusion: The Tribunal approved the Scheme of Amalgamation, subject to compliance with statutory requirements and regulations. The order emphasized the transfer of rights, liabilities, and employees, ensuring a seamless transition between the Transferor and Transferee Companies.