TMI Blog2020 (10) TMI 1110X X X X Extracts X X X X X X X X Extracts X X X X ..... Liquidator : J. Elangovan For The Income-Tax Department : Ganesh R. Ghale ORDER ASHUTOSH CHANDRA (TECHNICAL MEMBER). - 1. The present petition has been jointly filed by the petitioners namely M/s. HCL Technologies Solutions Ltd. ( transferor company-III/petitioner company-I ) and M/s. Concept2Silicon Systems P. Ltd. ( transferor company-IV/petitioner company-II ) (hereinafter referred to as the petitioner-companies ) under sections 230 to 232 and other applicable provisions of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, by, inter alia, seeking that the scheme of amalgamation be sanctioned by this hon'ble Tribunal so as to be binding on the petitioner-companies, their shareholders, secured creditors, unsecured creditors, employees, and all other relevant parties, etc. 2. Brief facts of the case, as mentioned in the company petition, are as follows : (1) M/s. HCL Technologies Solutions Ltd. (hereinafter referred to as the petitioner-company-I/transferor company-III ) is an unlisted public limited company incorporated on December 14, 1999 under the provisions of the Companies Act, 1956 as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under applicable laws for the time being in force empowered to approve the scheme of amalgamation, and subject to such conditions or guidelines, if any, as may be prescribed, imposed or stipulated in this regard by the shareholders and/or creditors of the company, Tribunals or concerned authorities, from time to time, while granting such approvals, consents, permissions and/or sanctions and which may be agreed to by the board of directors of the company (hereinafter referred as 'board'), the consent of the board be and is hereby accorded to the scheme of amalgamation (hereinafter referred as 'scheme') amongst HCL Eagle Ltd. ('HCL Eagle'), HCL Comnet Ltd. ('HCL Comnet'), HCL Technologies Solutions Ltd. ('HCL Tech Solutions'), Concept2Silicon Systems P. Ltd. ('C2SiS') (hereinafter referred to as 'transferor companies') and HCL Technologies Ltd. ('HCL Tech') (hereinafter referred to as 'transferee company') and their respective shareholders and creditors under sections 230 to 232 and other applicable provisions of the Companies Act, 2013, with effect from appointed date, i. e., April 1, 2019 as tabled before the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or regulatory authority, body, institution (hereinafter collectively referred as 'concerned authority) of competent jurisdiction under applicable laws for the time being in force empowered to approve the scheme of amalgamation, and subject to such conditions or guidelines, if any, as may be prescribed, imposed or stipulated in this regard by the shareholders and/or creditors of the company, Tribunals or concerned authorities, from time to time, while granting such approvals, consents, permissions and/or sanctions and which may be agreed to by the board of directors of the company (hereinafter referred as 'board'), the consent of the board be and is hereby accorded to the scheme of amalgamation (hereinafter referred as 'scheme') amongst HCL Eagle Ltd. ('HCL Eagle'), HCL Comnet Ltd. ('HCL Comnet'), HCL Technologies Solutions Ltd. ('HCL Tech Solutions'), Concept2Silicon Systems P. Ltd. ('C2SiS') (hereinafter referred to as 'transferor companies') and HCL Technologies Ltd. ('HCL Tech') (hereinafter referred to as 'transferee company') and their respective shareholders and creditors under sections 230 to 232 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equently, its name was changed to HCL Consulting Ltd. in the year 1994 and there after, to its present name, i. e., HCL Technologies Ltd., and a fresh certificate of incorporation was issued by the Registrar of Companies, NCT of Delhi and Haryana on October 6, 1999. The CIN of the company is L74140DL1991PLC046369 and its registered office is presently situated at 806, Siddharth 96, Nehru Place, New Delhi-110 019. Its authorised capital as on the date of approval of the scheme by its board of directors is ₹ 3,00,00,00,000 divided into 1,50,00,00,000 equity shares of ₹ 2 each and its issued, subscribed and paid-up equity share capital is ₹ 2,71,25,57,736 divided into 1,35,62,78,868 equity shares of ₹ 2 each and subsequently there has been no change in the share capital except issued and allotment of equity shares under the employee stock option scheme of the company. The transferee company is a leading global IT ser vices company that helps global enterprises re-imagine and transform their businesses through Digital technology transformation. (10) It is further stated that the draft scheme was placed before the board of directors of other transferor compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... feror companies or the transferee company would, in any way be affected by the scheme. (16) It is further stated that no proceedings are pending under the Companies Act, 2013 or under the corresponding provisions of the Companies Act, 1956 against the petitioner-companies. No winding up proceedings have been filed or are pending against the transferor companies and the transferee company under the Companies Act, 2013 or the corresponding provisions of the Companies Act, 1956, or under the IBC, 2016. (17) It is further stated that there are no investigation proceedings have been instituted and/or is pending in relation to the petitioner-companies under sections 235 and 250A of the Companies Act, 1956 or sections 210, 212, 213 and 216 of the Companies Act, 2013, and that there are no proceedings for winding up pending before this Tribunal or before the hon'ble High Court of Karnataka against the petitioner-companies. 3. It is stated that the petitioners had filed C. A. (CAA) No. 43/BB/2019 before this Tribunal seeking to dispense with the meetings of the equity shareholders and creditors of the petitioner-companies. The Tribunal vide its order dated September 12, 2019 or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary of HCL Global Processing Services Ltd. HCL GPSL is a wholly owned subsidiary of HCL Bermuda Ltd., and HCL Bermuda is a wholly owned subsidiary of the transferee company. Hence transferor company No. 4 is the wholly owned subsidiary of the transferee company. (5) The transferee company, viz., M/s. HCL Technologies Ltd., is a listed public limited company and its equity shares are listed on BSE Ltd., and National Stock Exchange of India Ltd. Necessary compliance of LODR is to be complied by the petitioners. (6) The transferee company shall comply with section 232(3)(i) of Companies Act, 2013, and pay the difference fee, after setting of the fee already paid by the transferor company on their respective capital. Transferee company shall give an undertaking to that effect. (7) Almost all shares of transferor companies Nos. 3 and 4 are held directly or indirectly by foreign entities. Hence the companies may be directed to comply with the FEMA/RBI Regulations. (8) As per the statutory auditors report, there are certain Income-tax dues pending with regard to transferor company No. 3 and the matter is pending before the hon'ble High Court. (9) Transferor companies No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y owned subsidiaries of the transferee company. In terms of clause 18 of the scheme, the transferee company is not required to issue any shares to the shareholders of the transferor companies. Further the activities of the transferor companies and the transferee company are permitted activities under the automatic route within the provisions of the FEMA/RBI Guidelines. No permission is required from the RBI in respect of the scheme between the transferor companies with the transferee companies. Notwithstanding the same, as required by the Registrar of Companies, the petitioner-companies hereby undertake to comply with all the FEMA/RBI Guidelines, if any, necessary to implement the scheme. (3) As regards the Income-tax dues pending with regard to transferor company No. 3, it is stated that in terms of the provisions of clause 11 of the scheme, upon the scheme becoming effective, all the pending proceedings including taxation proceedings pending on part of the transferor companies shall continue to be enforced against the transferee company. Further, in terms of clause 13 of the scheme, upon the scheme becoming effective, all taxes and duties payable by the transferor companies sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r related records of the company, we are of the opinion that the affairs of the company have not been conducted in a manner pre judicial to the interest of the members of the company or public interest as per section 232 of the Companies Act, 2013. 9. Further, the official liquidator has filed O. L. R. No. 23 of 2020 dated March 3, 2020 in C. P. (CAA) No. 01/BB/2020 by, inter alia, stating that the official liquidator for scrutiny of the books of account and records of the transferor company-IV has engaged M/s. N. Tatia and Associates, chartered accountants, which, after examining the affairs of the transferor company-III, in its report dated February 25, 2020 has, inter alia, concluded as under : 5.70 On scrutiny of books of account, papers, statutory registers and other related records of the company, we are of the opinion that the affairs of the company have not been conducted in a manner pre judicial to the interest of the members of the company or public interest as per section 232 of the Companies Act, 2013. 5.11 As employees of transferor company is transferred to transferee company there is no loss of interest to employees of transferor company. Therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further submitted that HCL Eagle Ltd., the transferor company-I, HCL Comnet Ltd., the transferor company-II and HCL Technologies Ltd., the transferee company have already approached the National Company Law Tribunal, Delhi Bench by way of filing C. A. A. No. 138/ND/2019 in C. A. (CAA) No. 88/ND/2019 by, inter alia, seeking to sanction the scheme in question. Accordingly, the scheme was sanctioned by the National Company Law Tribunal, Delhi Bench, by an order dated December 12, 2019, and a copy of the same has been placed on record vide memo dated February 26, 2020. Therefore, he has urged the Tribunal to sanction the scheme in question, as it is required to be sanctioned by this Bench in respect of the petitioner- companies. 14. Heard Mr. Satwinder Singh along with Mr. Raghuram Cadambi, learned counsels for the petitioner-companies, Smt. Prema Hatti, learned standing counsel for the Registrar of Companies, Mr. Ganesh R. Ghale, learned standing counsel for the Income-tax Department and Mr. J. Elangovan representing office of the official liquidator. We have carefully perused the pleadings of the parties and the extant provisions of the Companies Act, 2013 and various Rules made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll, pursuant to section 232 of the Companies Act, 2013, be transferred to and become the liabilities and duties of the transferee company ; (5) The tax implications, if any, specially under the Income-tax Act, 1961, arising out of the scheme are subject to final decision of concerned tax authorities and the decision of the concerned tax authorities shall be binding on the transferee company ; (6) All the proceedings now pending by or against the petitioner- companies be continued by or against the transferee company, if any ; and (7) Liability, if any, arising from non-compliance to the provisions contained in section 135, shall stand transferred to and be the liability of the transferee company ; (8) The petitioner-companies shall ensure all requisite compliances under the FEMA/RBI Guidelines, as may be applicable ; (9) The petitioner-companies shall within thirty days of the date of the receipt of this order cause a certified copy of this order along with a copy of scheme of amalgamation to be delivered to the Registrar of Companies for registration in accordance with applicable Rules and Regulations; (10) The petitioner-companies shall file all the due statutor ..... 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