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TMI Blog2020 (9) TMI 703X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies submits that the Company Scheme Petition has been filed to seek sanction to the Composite Scheme of Amalgamation and Arrangement among Max India Limited, Max Healthcare Institute Limited, Radiant Life Care Private Limited and Advaita Allied Health Services Limited and their respective shareholders and creditors ("Scheme") pursuant to the provisions of Sections 230 - 232 of the Companies Act, 2013. 3. The shares of the Petitioner Company 1 are listed on the BSE Limited ("BSE") and the National Stock Exchange of India Limited ("NSE"). BSE by its letter dated August 26, 2019 and NSE by its letter dated August 27, 2019 have respectively given their no objection to file the Scheme with this Tribunal. The shares of the Petitioner Companies 2, 3 and 4 are not listed on any of the stock exchanges. 4. The Learned counsel for the Petitioner Companies submits that the Scheme provides for the: (a) Demerger of the Demerged Undertaking 1 (as defined in the Scheme) from the Petitioner Company 1 into the Petitioner Company 4, in accordance with Sections 230 to 232 of the Companies Act, 2013 and in compliance with Section 2(19AA) of the Income-tax Act, 1961; (b) Demerger of the Demerg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ores and incurred a loss of Rs. 50 crores in the financial year 2017-18. The Petitioner Company 1 and the Petitioner Company 3, each currently holds 49.7% of the paid up share capital of Petitioner Company 2; (ii) The Petitioner Company 1 held 51% of the total issued and paid up equity share capital of Max Bupa Health Insurance Company Limited ("Max Bupa") (a company engaged in the business of health insurance) until December 16, 2019. The Petitioner Company 1 has divested its entire shareholding in terms of a share purchase agreement executed by the Petitioner Company 1 for the sale of shares of Max Bupa. The sale proceeds and/or associated liabilities, if any, arising from above divestment, shall form part of the Demerged Undertaking 1, in terms of the Scheme; (iii) The Petitioner Company 1 holds 100% of the share capital of Antara Senior Living Limited, which (directly and through its subsidiaries) is engaged in the business of developing senior living projects. Antara Senior Living Limited is developing its first community in Dehradun with 212 units, which are being designed to cater to lifestyle and life care needs of the seniors in the community; (iv) The Petitioner Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Noida at Greater Noida (to which the Petitioner Company 2 is rendering certain medical services) ("O&M Arrangement"). Post demerger of the Healthcare Business, it is envisaged that the Petitioner Company 3 shall concentrate on the O&M Arrangement, its consulting business and nurture and grow the aforementioned investments over a period of time. The Petitioner Company 3 currently operates the following hospitals in New Delhi and Mumbai through operation and management agreements (O&M agreements), (a) Dr. B. L. Kapur Memorial Hospital, Delhi; and (b) Dr. Balabhai Nanavati Hospital, Mumbai (through Radiant Life Care Mumbai Private Limited), respectively; (d) The Petitioner Company 3 and the Petitioner Company 2 believe that the demerger of the Healthcare Business of the Petitioner Company 3 into the Petitioner Company 2 is a strategic fit for serving the existing market and catering to additional volume in the healthcare sector. The Petitioner Company 3 and the Petitioner Company 2 believe that the concentration of their respective healthcare businesses in one entity will enhance competitive strength and achieve cost reduction, efficiencies and productivity gains by pooling the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for shareholders of the Petitioner Company 1 to participate directly into a combined entity engaged in healthcare business; (iii) availability of increased resources, expertise and assets in the resultant amalgamated company, which can be utilized for strengthening the customer base of the Petitioner Company 3 and the Petitioner Company 2 and servicing existing as well as prospective patients and customers of the Petitioner Company 3 and the Petitioner Company 2, efficiently; (iv) the combination of the healthcare business activities of the Petitioner Company 3 and the Petitioner Company 2 is a strategic fit for serving the existing market and for catering to additional volume of new patients; (v) cost reduction, accessibility of clinical services at more locations resulting in stronger brand image, retaining talent, optimization of support functions, efficiencies and productivity gains by pooling the resources of the Petitioner Company 1, the Petitioner Company 3 and the Petitioner Company 2, thereby significantly contributing to future growth and maximizing shareholders value; (vi) benefit to all stakeholders of the Petitioner Companies, leading to growth and value creati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Undertaking 1 from the Transferor Company 1 to the Transferee Company 1 means February 1, 2019; "Appointed Date 2" in respect of the transfer of the Demerged Undertaking 2 from the Transferor Company 2 to the Transferee Company 2 and for the amalgamation of the Amalgamating Company to the Amalgamated Company means the Effective Date; "Effective Date" has the meaning assigned to such term in Clause 6.2; any references in this Scheme to "upon this Scheme becoming effective" or "upon the effectiveness of this Scheme" or "post effectiveness of this Scheme" or "this Scheme becoming effective" means and refers to the Effective Date; "Record Date 1" means the date to be fixed in terms of Clause 3.3, for the purpose of issue of Equity Shares by Transferee Company 1 to the shareholders of Transferor Company 1 in terms of Part-III of this Scheme; "Record Date 2" means the date to be fixed in terms of Clause 4.2, for the purpose of issue of Equity Shares by Transferee Company 2 to the shareholders of Transferor Company 2 in terms of Part-IV of this Scheme; "Record Date 3" means the date to be fixed in terms of Clause 5.4 of this Scheme, for the purpose of issue of Equity Shares by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k Exchange; or Hon'ble NCLT may issue notice to other sectoral regulators or authorities (The Securities and Exchange Board of India, Bombay Stock Exchange Limited and National Stock Exchange of India and/or pass appropriate orders/orders as deemed fit. (h) As regards the complaints indicated at para 21 above, under the head - Status of Complaint as per MCA Portal - Screenshot, it is submitted that the petitioners be directed to mention the current position regarding complaints redressed by the company and to file an undertaking accordingly." 10. In response to the observations made by the Regional Director in its Report, the Learned Counsel for the Petitioner Companies submit that the Petitioner Companies have filed an affidavit dated December 24, 2019 ("Affidavit") with this Tribunal on January 1, 2020 and a copy of the Affidavit has been served on the Regional Director on January 1, 2020. The response of the Petitioner Companies to the observations made by the Regional Director in its Report in their Affidavit are as under. 11. So far as the observation in sub paragraph (a) of the Report is concerned, the Transferee Company 1 and the Transferee Company 2 submit that in addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Application and the Company Scheme Petition filed with the Hon'ble Tribunal. 18. So far as the observation in sub paragraph (h) of the Report is concerned, the Petitioner Company 1 submits that the complaints indicated in paragraph 21 of the RD Report pertains to Max Financial Services Limited (erstwhile Max India Limited), CIN: L24223PB1988PLC008031 and having its registered office at Bhai Mohan Singh Nagar, Rail Majra, Tehsil Balachaur, District Nawanshahr, Punjab and not against the Petitioner Company 1, i.e. Max India Limited (erstwhile Taurus Ventures Limited). The Hon'ble High Court of Punjab and Haryana vide its order dated December 14, 2015 approved a composite scheme of arrangement involving Max Financial Services Limited (erstwhile Max India Limited), Max India Limited (erstwhile Taurus Ventures Limited) and Max Ventures and Industries Limited (erstwhile Capricorn Ventures Limited). Pursuant to this composite scheme, the erstwhile Max India Limited was renamed as Max Financial Services Limited and the erstwhile Taurus Ventures Limited was renamed as Max India Limited, i.e. the Petitioner Company 1. Further, the complaints indicated in paragraph 21 of the RD Report have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Authorty vide their aforementioned letter. Further, the decision of such Authority is binding on Transferee Company 1. The Transferee Company 1 undertakes to comply with all its obligations under law including under the Income-tax Act, 1961. The undertaking in this regard of the Director of the Transferee Company 1 dated January 17, 2020 is taken on record and accepted. 21. From the material on record and after perusing the clarifications and submissions of the Petitioner Companies to the Report and the Supplementary Report filed by the Regional Director, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy. 22. Since all the requisite statutory compliances have been fulfilled, the Company Scheme Petition CP (CAA) 4051/MB/2019 filed by the Petitioner Companies is made absolute in terms of prayer clauses (a), (c) and (d) of the Company Scheme Petition. 23. The Petitioner Companies to lodge certified copy of this order along with a copy of the sanctioned Scheme attached thereto, with the concerned Collector of Stamps, for the purpose of adjudication of stamp duty payable, if any, within 60 days from the d ..... 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