TMI Blog2016 (10) TMI 1371X X X X Extracts X X X X X X X X Extracts X X X X ..... ns for Direction No. 217 of 2016 And Company Scheme Petition No. 318 of 2016 Connected With Company Summons For Direction No. 218 of 2016 - - - Dated:- 20-10-2016 - A.K. Menon, J. Mr. Janak Dwarkadas, Senior Advocate, along with Mr. Rohan Rajadhyaksha, Advocate i/b AZB Partners, Advocates for the Petitioners in both Petitions. Mr. Vinod Sharma, Official Liquidator, present in Company Scheme Petition No. 317 of 2016. Mr. Aniruddha A. Garge i/b Shri. Pankaj Kapoor for the Regional Director in both the Petitions. ORDER P. C. : 1. Heard learned counsel for the parties. No objector has come before the Court to oppose the Scheme nor has any party has controverted any averments made in the Petition. 2. The sanction of the Court is sought under Sections 391 to 394 of the Companies Act, 1956 to a Scheme of Amalgamation of Accenture Services Private Limited with Accenture Solutions Private Limited, and their respective shareholders and their creditors. 3. Learned Counsel for the Petitioners states that the Transferor Company is a private limited company and is, inter alia, engaged in the business of delivering information technology/ information technol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing with two separate legal entities and consistent with the Accenture group global entity reduction program, it is Accenture s preference to amalgamate these two entities in India such that the business of the Transferor Company and the Transferee Company can be combined conveniently and carried out in conjunction more advantageously to achieve operational efficiency and cost minimization. f. The Transferee Company is currently registered with and holds debt collection licenses in thirty-two U.S. States. Under these licenses, and a number of exemptions, waivers and bonds secured in other U.S. States, the Transferee Company can provide offshored regulatory debt collection BPO activities from India across the entire U.S. (except two U.S. States). It is submitted that the Transferee Company is the only Accenture group entity in India to hold these licenses and based on legal advice obtained under applicable U.S. laws, it is advised that under the current U.S. legal regime, the licensing requirements to perform such regulated debt collection activities are very complex, time-consuming and unpredictable for a non-U.S. business entity. Further, the applicable U.S. laws do not permit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Petitioners have complied with all the directions passed in the respective Company Summons for Directions and that the respective Company Scheme Petitions have been filed in consonance with the orders passed in the respective Company Summons for Directions and seeks sanction to the said proposed Scheme of Amalgamation. 7. Learned Counsel appearing on behalf of the Petitioners have stated that they have complied with all requirements as per directions of this Court and they have filed necessary affidavits of compliance in the Court. Moreover, the Petitioners undertake to comply with all the statutory requirements, if any, as required under the Companies Act, 1956/ 2013 and the rules made thereunder whichever is applicable. The undertaking is accepted. 8. The Official Liquidator has filed his report on September 21, 2016 in Company Scheme Petition No. 317 of 2016 and has stated therein that the affairs of the Transferor Company have been conducted in a proper manner and that the Transferor Company may be ordered to be dissolved without being wound-up. 9. The Regional Director has filed an affidavit on October 7, 2016 stating therein that save and except what is stated in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary approval from STPL as well for the scheme. Deponent prays that the Hon ble Court may direct the company to undertake to obtain necessary approval. (f) Transferee company need to increase the authorised share capital as applicable and pay the applicable fee/stamp duty as applicable on increase of authorised share capital of the transferee company so as to enable it to allow NEW SHARES. Deponent prays that the Hon ble High Court may direct the company to undertake to comply with the provisions of the Companies Act, 2013 for increasing the capital. (g) Roc has observed that as per the disclosure in the note of the Balance Assets 31/03/2015 the company is predominantly and outsourcing unit catering to adventure group thereof no reportable geographical segments. But the scheme provides for the rationale vide para No. II (f) that the transferee company is currently registered with and holds debt collection licenses in 32 US states, that which signify that either the said licenses are recently acquired were not obtained as at 31/3/2015 as no separate segment results for such debt collection business was reported under segment reporting in the B/S as at 31/03/2015 or se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Resolution approving the Scheme of Amalgamation with the Ministry of Corporate Affairs, Registrar of Companies, Mumbai through e-form MGT-14 (SRN G00865113). The Transferor Company has on October 5, 2016 filed revised e-form MGT 14 (SRN G13593702) attaching the correct Board Resolution as was attached to the Company Summons for Direction No. 217 of 2016 and Company Scheme Petition No. 317 of 2016 filed by the Transferor Company with the Hon'ble Bombay High Court. The said revised e-form MGT 14 has been duly approved by the Ministry of Corporate Affairs, Registrar of Companies, Mumbai on October 5, 2016. Accordingly, the said defect has been rectified and in view thereof, the objection of the Regional Director does not survive. 14. In response to paragraph 6(d) of the Affidavit of the Regional Director, it is submitted that the resolution referred to in paragraph 6(d) of the Affidavit of the Regional Director merely contained enabling language, permitting the authorized persons to call and convene an extra ordinary general meeting of the Transferee Company, and no such meeting was convened or held because such meeting was not required to be convened or held under law. It is f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to the Transferee Company and does not involve any release of assets. In such a case the provisions of Sections 100-104 of the Companies Act, 1956, will not be applicable. This argument has been upheld by this Hon ble Court in the matter of M/s EOC Tailor Made Polymers India Private Limited [2005 Vol 107(2) Bom. L. R. 520] wherein it was held that the provisions under section 101 would not apply in a case where there is a reduction in the share capital of the company by virtue of amalgamation of two companies and in case where the transferor company held shares in the transferee company. In view of the aforesaid position in law, I find that there is no merit in the objection raised by the Regional Director in the present case. I accordingly make both petitioners absolute in terms of prayer cls. (c) to (f) . The Hon ble Madras High Court in the case of Asian Investments Ltd [(1992) CC 517] and the Hon'ble Calcutta High court in Mcleod and Co. and Ors. vs. S.K. Ganguly and Ors [(1975) CC 563] have also held that it is not necessary to follow the prescribed procedure of sub-section (2) of section 101 of the Companies Act 1956 in cases where reduction of share capital is automa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tends to duly complete the said process after approval by the Hon'ble Court of the Scheme and prior to the Effective Date. The Transferee Company undertakes that, prior to the Scheme becoming effective, it shall increase its authorized share capital at least to the extent as may be required for allotment of new shares to the shareholders of the Transferor Company pursuant to the Scheme. The Transferee Company further undertakes to pass necessary resolutions and make relevant filings with the Ministry of Corporate Affairs, Registrar of Companies, Mumbai to give effect to such increase in authorized share capital. The Transferee Company further undertakes to pay necessary stamp duty and filing related fees as may be payable under applicable laws and regulations. The said undertaking is accepted. 19. In response to paragraph 6(g) of the Affidavit of the Regional Director, it is submitted that under the Accounting Standard 17 issued by the Institute of Chartered Accountants of India, which is mandatorily required to be followed by the Transferee Company, there is no requirement to disclose separate segment reporting for the US debt collection licenses. Therefore, the objection o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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