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2019 (12) TMI 1401 - Tri - Companies LawApproval of the Scheme of Arrangement - 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 - The shareholders of the applicant companies are the best Judges of their interest fully conversant with market trends and therefore their decision should not be interfered with by Tribunal for the reason that it is not a part of judicial function to examine entrepreneurial activities and their commercial decisions. It is well settled that the Tribunal evaluating the Scheme of which sanction is sought under Section 230-232 of the Companies Act of 2013 will not ordinarily interfere with the corporate decisions of companies approved by shareholders and creditors. Right to apply for the sanction of the Scheme has been statutorily provided under Section 230-234 of the Companies Act 2013 and therefore it is open to the applicant companies to avail the benefits extended by statutory provisions and the Rules. It has also been affirmed in the petition that the Scheme is in the interest of all the transferor companies and the transferee company including their shareholders creditors employees and all concerned - sanction is hereby granted to the Scheme under Section 230 to 232 of the Companies Act 2013. Application allowed.
Issues:
1. Approval of Scheme of Arrangement under Sections 230 to 232 of the Companies Act, 2013. 2. Compliance with statutory requirements and reports from relevant authorities. 3. Sanctioning of the Scheme and its implications on the transferor and transferee companies. 4. Dissolution of the Transferor Company and transfer of assets, liabilities, and employees to the Transferee Company. Analysis: 1. The Joint Application filed by the Petitioner Companies sought approval of the Scheme of Arrangement under Sections 230 to 232 of the Companies Act, 2013. The Tribunal had earlier dispensed with the requirement of convening meetings of Shareholders and Creditors, and after compliance with publication and service requirements, the petitioners filed an affidavit affirming the same. 2. Reports from the Regional Director, Official Liquidator, and Income Tax Department were submitted, indicating no objections to the proposed Scheme. Additionally, statutory auditors' certificates confirmed the Accounting Treatment's conformity with relevant standards under the Companies Act, 2013. 3. The Tribunal emphasized the limited scope of its jurisdiction in evaluating the Scheme's fairness, justness, and reasonableness, as established in the case law. The Tribunal noted that the Scheme was in the interest of all parties involved, including shareholders, creditors, and employees, and granted sanction to the Scheme under Sections 230 to 232 of the Companies Act, 2013. 4. The Tribunal ordered the dissolution of the Transferor Company without winding-up proceedings, transferring its assets, liabilities, and employees to the Transferee Company. The Petitioner Companies were directed to comply with statutory requirements, and any deficiencies or violations would not impede legal actions against responsible individuals. The order clarified that it did not exempt the Scheme from stamp duty, taxes, or other charges, emphasizing compliance with all legal obligations. 5. The Tribunal further ordered the transfer of property, rights, powers, liabilities, and duties between the companies, continuation of pending proceedings, and seamless transition of employees to the Transferee Company. The Petitioner Companies were instructed to deliver a certified copy of the order for registration within thirty days, leading to the dissolution of the Transferor Company and consolidation of relevant documents with the Registrar of Companies. 6. The Tribunal concluded by disposing of the petition in accordance with the outlined terms, allowing interested parties to seek necessary directions from the Tribunal. The order was to be served to all relevant parties involved in the proceedings.
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