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TMI Blog2022 (5) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany") and Pluto Cessna Business Parks Private Limited ("Resulting Company"). The joint petition is maintainable in terms of Rule 3 (2) of the Rules. 2. The Petitioner Companies filed First Motion Application bearing CA (CAA) No. 46/BB/2021 ("First Motion Application") before this Tribunal seeking to dispense with the meeting of the Class A, Class B and Class C Equity Shareholders of the Demerged Company, Equity Shareholders of the Resulting Company, Optionally Convertible Redeemable Preference Shareholders of the Demerged Company, Secured Optionally Convertible Debenture Holders of the Demerged Company, Secured Creditors and Unsecured Trade Creditors of the Demerged Company and Unsecured Compulsorily Convertible Debenture Holders of Resulting Company. Based on such Application moved under section 230-232 of the Companies Act, 2013 necessary directions were issued vide order dated 03.02.2022 wherein the meetings of Class A, Class B and Class C Equity Shareholders, Optionally Convertible Redeemable Preference Shareholder, Secured Optionally Convertible Debenture Holders, Secured Creditors and Unsecured Creditors of Applicant Company No. 1 and Equity shareholders and Unsecured Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tutory authorities i.e., The Registrar of Companies, Karnataka, The Regional Director, Hyderabad, The Jurisdictional Deputy Commissioner of Income Tax (Petitioner Company 1), The Jurisdictional Deputy Commissioner of Income Tax (Petitioner Company 2), Competition Commission of India, Reserve Bank of India. It is deposed that no objection has been received by the Petitioner Company from any person or authority/department to the Scheme. 5. The main objects, date of incorporation, authorized, issued and paid-up share capital, rationale of the Scheme and interest of employees have been discussed in detail in First Motion Order passed on 03.02.2022. 6. The Board Resolution approving the Scheme by the Petitioner Companies is annexed at Annexure 12 & 13 of the Petition. 7. It is further submitted that the Certificates of Statutory Auditors dated 22.07.2021 of the Petitioner Company No. 1 and the Certificates of Statutory Auditors dated 07.07.2021 of the Petitioner Company No. 2 has been placed as Annexure 28 & 29 of the Petition, stating that the accounting treatment specified in Clause 16 of Part III of the "Scheme" with regard to arrangement with Resulting Company and their respectiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... & equipment related thereto as provided in clause 1.1.5 will be Demerged into the Resulting Company. e) Under the captioned rationale behind the Demerger, it was stated that the increase knowledge, expertise and experience of the Resulting Company are expected to improve the business operations of the Demerged undertaking whereas the Resulting Company itself has been incorporated only on 22.10.2020. The Petitioner Company may furnish detailed justification to the Hon'ble NCLT in this regard. f) As per the Scheme, the Resulting Company shall issue & allot an aggregate of 10 equity shares of Rs. 10 each to (i) all the equity shareholders (Class A, B & C) and (ii) all the Class B Optionally Convertible Redeemable Preference Shareholders of the demerged company in proportion to their shareholding in the Demerged Company. The share exchange ratio as fixed as consideration for demerging undertaking of a profit-making company is too low. Hence, clarification be given to the Hon'ble NCLT in this regard. g) As per the Financial Statements as at 31.03.2021 of the Demerged company, the company has given intercorporate deposits to its Subsidiary Company viz. Dashanya Tech Par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 188 of the Companies Act, 2013 along with supportive documents to confirm the transactions are on 'Arm's length basis' or file Compounding Application under Section 188 of the Companies Act, 2013. The Petitioner Companies shall file an undertaking before the Hon'ble NCLT with regard to compliance of Section 188 of the Companies Act, 2013. 11. Subsequently, reply affidavit to the RD & ROC reports have been filed by petitioner company vide diary No. 1315 dated 29.03.2022, inter alia stating as under, vide para 5: a) In response to the observation made at para 2(a) of the RD report, the Petitioner Companies state that as on the Appointed Date of Demerger, the Demerged Undertaking had a negative net worth. The report issued by the Registered Valuer confirming the negative net worth of the Demerged Undertaking is annexed at Annexure 3 of the response. The Demerger of the Demerged Undertaking from the Demerged Company into the Resulting Company has resulted in reduction of the consolidated debt position of Prestige Estates Projects Limited. As part of the Scheme, which has also been considered by the lenders, a debt to the tune of INR 17,300 million will be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hares of Rs. 10 each to i) all the equity shareholders (class A, B & C) and ii) all the class B Optionally Convertible Redeemable Preference Shareholders of the demerged company in proportion to their shareholding in the Demerged Company. f) In response to the observation made at para 2(g) of the RD report, in terms of compliance of section 186 is concerned, the company being an infrastructure company, the provisions of section 186 is exempted. Whereas in terms of section 185, the company has passed the necessary resolutions for providing the intercorporate deposits to its subsidiary company and thus is in compliance with the provisions of section 185. Copies of the resolution passed is enclosed as Annexure 4 of the reply. Further, the company hereby undertakes and confirms that the necessary compliances as mandated under section 185 and 186 of the Companies Act, 2013 are duly taken care and will be taken care in the future as well. g) In response to the observation made at para 2(h) of the RD report, it is stated that the undisputed statutory dues outstanding on 31 March, 2021 has already been paid by the Demerged Company. An affidavit confirming that the disputed statutory du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act, 2022. In this regard, the AoC-2 explaining the related party transactions are on arm's length basis, thereby complying with provisions of section 188 of the Companies Act, 2013 annexed at Annexure 8 of the reply. 12. Learned Counsel for the Income Tax Department also submitted that their outstanding demand in case of M/s. Prestige Exora Business Parks Limited is Rs. 60,03,025/- for Accounting Year 2017-2018 and 4,71,79,260/- for Accounting Year 2018-2019. On 12.04.2022 vide diary no 1554, the petitioner company undertakes all the tax liabilities, duties and/are such other statutory dues, if any arises, the same shall be paid by the demerged company as and when the claims are crystallised. 13. On 08.04.2022, we have heard the learned PCS for the Petitioner Companies, Counsel for the Income Tax Department and the Counsel for the RoC & RD. This Tribunal directed the Petitioner Companies to file a fresh affidavit regarding to the amount spent towards its CSR responsibility; since, the affidavit filed earlier is not clear. In compliance of the order dated 8.04.2022, the Petitioner Companies have filed the affidavit vide diary no. 1554 dated 12.04.2022 stating that the Demer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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