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TMI Blog2024 (2) TMI 1444X X X X Extracts X X X X X X X X Extracts X X X X ..... nal Scheme of Amalgamation by passing their respective Resolutions on 09.08.2022 which are annexed to the Joint Company Scheme Petition ("Petition"). 3. Learned Counsel appearing on behalf of the Petitioner Companies submits that a Company Application No. 335 of 2023 was for amendment in the Original Scheme. By virtue of amendment, it is submitted that the Petitioner Companies do not intend to merge the Fourth Petitioner Company with the Transferee Company/Fifth Petitioner Company due to commercial and regulatory reasons. A copy of the said Company Application has been served to the offices of the Regional Director, Western Region, Mumbai and the Registrar of Companies, Mumbai, both on 09.08.2023. Learned Counsel further submits that the modified Scheme of Amalgamation is for the merger of First Petitioner Company, Second Petitioner Company and the Third Petitioner Company with the Transferee Company/Fifth Petitioner Company and their respective shareholders ('modified Scheme'/Scheme). It is submitted that the Fourth Petitioner Company and their shareholders will not be the parties to the modified Scheme, and the same shall also not affect the Petitioner Companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an opportunity to leverage and pool manpower of the respective companies; e. Derive operational and financial synergies through prudent financial management and cost reduction; and f. Better administration, reduction/rationalization in costs, focused operational efforts and elimination of duplication. 12. Consideration: Learned Counsel for the Applicant Companies further submit that the Transferor Company 1, Transferor Company 2, and Transferor Company 3 are wholly owned subsidiaries of the Transferee Company and the entire share capital of Transferor Companies is owned and controlled by the Transferee Company. There will not be any issue and allotment of any shares by the Transferee Company as consideration pursuant to the merger. 13. The shares of the Transferor Companies are not listed on any stock exchange. The equity shares of the Transferee Company are listed on BSE and NSE. 14. The Tribunal vide Order dated 01.12.2022 admitted the Company Scheme Application bearing No. CA(CAA)/225/MB/2022 and inter-alia, gave the following directions: a) Dispensation of convening the meetings of equity shareholders of the Transferor Companies in view of consent affidavits ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther, the Petitioner Companies has filed Financial Statements up to 31/03/2022. The ROC has further submitted that in his report dated 24/02/2023 which are as under :- i. That the ROC Mumbai in his report dated 24/02/2023 has also stated that No Inspection, Investigations & Prosecutions under CA, 2013 are pending against the Petitioner Companies. ii. That one inquiry against the company namely Oberoi Construction Limited is pending and inquiry follow up action is going on against the company namely Oberoi Realty Limited. As per records available at this office, Inquiry/Technical Scrutiny is pending / under process against two companies namely :- 1. Oberoi Constructions Limited - Ministry has ordered inquiry on 08.06.2010 & inquiry report is yet to be received from ROC, Mumbai. 2. Oberoi Realty Limited - Ministry has ordered inquiry on 16.04.2018, Inquiry report submitted by ROC, MUMBAI dated 05.01.2021. the instruction from Ministry is received on 18.08.2021 and same has been forwarded to ROC, Mumbai on 19.01.2023 and inquiry follow up action is being carried out by ROC, Mumbai. Further in the inquiry u/s. 206(4) in respect of Oberoi Realty Limited the following issues are bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner Company has not received any inquiry/ technical scrutiny from Registrar of Companies. Further, the First Petitioner Company will comply with the directions of Registrar of Companies on any inquiry/ technical scrutiny as and when received, if any. The Fifth Petitioner Company has replied to the inquiry from Registrar of Companies. Further, the Fifth Petitioner Company will comply with the directions of Registrar of Companies on the inquiry as and when received, if any. The Petitioner Companies undertakes to comply with notice u/s. 206(4)/ order, prosecutions, adjudications which may be taken by the ROC, Mumbai, RD, Mumbai and Ministry of Corporate Affairs as per law on submission of inquiry reports in the matter of First and Fifth Petitioner Companies. iii. Further the Petitioner Companies submits that: a) Form GNL-1 have been filed vide SRN No. F59633891 dated 14 March 2023 for the First Petitioner Company, vide SRN No. F59634527 dated 14 March 2023 for the Second Petitioner Company, vide SRN No. F59633974 dated 14 March 2023 for the Third Petitioner Company, vide SRN No. F59635078 dated 14 March 2023 for the Fourth Petitioner Company and vide SRN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r) and on 28 February 2023 (as per directions in petition admission order) and affidavits of service to this effect were filed with the National Company Law Tribunal, Mumbai Bench by the Petitioner Companies. Enclosed herewith are the acknowledgement copies of the notices served to SEBI and Stock Exchange as Annexure D1 to Annexure D4. g) the interest of creditors will be protected. b) Transferee company should undertake to comply with the provisions of section 232(3)(i) of the Companies Act, 2013 through appropriate affirmation in respect of fees payable by Transferee Company for increase of share capital on account of merger of transfer of companies. The Petitioner Companies submit that the setting off of fees paid by the Transferor Company on its Authorised Share Capital shall be in accordance with provisions of section 232(3)(i) of the Companies Act, 2013. c) In compliance of Accounting Standard-14 or IND-AS 103, as may be applicable, the transferee company shall pass such accounting entries which are necessary in connection with the scheme to comply with other applicable Accounting Standards including AS5 or IND AS-8 etc. The Petitioner Companies submit that the Transfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is submitted that the Petitioners may be asked to comply with the requirements as clarified vide circular no. F. No. 7/12/2019/CL-I dated 21.08.2019 issued by the Ministry of Corporate Affairs. The Petitioner Companies submit that the Appointed Date is 1 April 2022 as per the Scheme. The Petitioner Companies further submits that the Petitioner Companies will comply with the requirements as to Appointed Date and Effective Date, as clarified vide circular no. F. No. 7/12/2019/CL-1 dated 21.08.2019 issued by the Ministry of Corporate Affairs. g) Petitioner Companies shall undertake to comply with the directions of Income tax department, if any The Petitioner Companies submit that the Petitioner Companies will comply with the directions of Income tax department, if any. h) Petitioner Companies shall undertake to comply with the directions of the concerned sectoral Regulatory, if any The Petitioner Companies submit that the Petitioner Companies will comply with the directions of the concerned sectoral Regulatory, if any. i) Petitioner Companies has foreign shareholders; hence Petitioner Companies shall undertake to submit acknowledged copy of notice served to RB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany, vide SRN No. H78318490 dated 23 July 2019 for the Second Petitioner Company, vide SRN No. H78259389 dated 23 July 2019 for the Third Petitioner Company and vide SRN No. H78318227 dated 23 July 2019 for the Fourth Petitioner Company. Enclosed herewith are the said Forms BEN-2 along with their challan copies as Annexure E1 to Annexure E4. However, the Fourth Petitioner Company will not be a party to the modified Scheme i.e., the Fourth Petitioner Company will not merge with the Fifth Petitioner Company and shall be exiting the scheme. 17. The supplementary report of the Regional Director was filed on 22.01.2024 making certain observation and the Petitioner Companies had responded on 29.01.2024. The relevant paragraphs are reproduced below: Sr. No. Observations from the Supplementary Report Response of the Petitioner Companies a) Further M/s Oberoi Constructions Private Limited (now M/s Oberoi Constructions Limited bearing CIN: U45202MHJ993PLC074836) is a transferor company and if Hon'ble NCLT deems fit, the scheme of merger may be approved, and in that case, it is submitted that NCLT may direct the directors of the said Transferor Company to undert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of Fourth Petitioner Company from the Scheme, ii) transfer of only the permanent employees of the Transferor Companies, and iii) undertaking to be given in respect of pending inquiry. Thereafter, an Additional Affidavit was filed on 30.01.2024. The Petitioner Companies' response regarding undertaking for inquiry is already reproduced in Para 17 above. As regards the OL report wherein transfer of permanent employees was questioned and reasons for withdrawal by Fourth Petitioner Company, it is submitted as follows: "6. The response of the relevant Petitioner Companies to the aforesaid observations from the OL Report are as under:- a) The First Petitioner Company, the Second Petitioner Company and the Third Petitioner Company hereby undertakes that the setting off of fees paid on their respective Authorised Share Capital shall be in accordance with the provisions of section 232(3)(i) of the Companies Act, 2013. b) Further, the Petitioner Companies hereby undertakes that transfer of permanent employees pursuant to the Scheme to the Transferee Company shall be construed to mean and include 'all employees' of the First Petitioner Company, the Second Petitioner Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 which when compared to the total outstanding liabilities of the First Petitioner Company constitutes a mere 0.0092% of the total outstanding debt. It is further submitted that the said unsecured creditor has not taken any steps for claiming or recovering the amount for the past 5 years and therefore, the claim is not maintainable and barred by limitation. 23. On considering the facts, we note that the First Petitioner Company has acknowledged debt of Rs. 18,09,970 as on 30.06.2022 payable to M/s. AMI Constructions which shows that the First Petitioner Company has admitted the debt payable to the said unsecured creditor. Therefore, the contention that the claim is not maintainable and barred by limitation is rejected in view of section 18 of the Limitation Act, 1963 as the said amount is acknowledged in the books of the First Petitioner Company year after year, which is evidenced by way of notice being served on the said unsecured creditor. In view of the above discussions, we reject the contention of the First Petitioner Company that the claim is barred by limitation. We note that the Petitioner Companies, in response to the RD Report dated 14.03.2023, have given an undertaking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions 230 to 232 of the Companies Act, 2013, subject to the compliance with the directions given in Paragraph 23 above, with the following directions: a) All the Transferor Companies shall be dissolved without winding up. b) While approving the Scheme, we clarify that this Order should not, in any way, be construed as an Order granting exemption from payment of stamp duty, taxes or other charges, if any, and payment in accordance with law or in respect of any permission or compliance with other requirements which may be specifically required under any law. c) All the employees of the Transferor Companies in service, on the date immediately preceding the date on which the Scheme takes effect i.e. the Effective Date, shall become the employees of the Transferee Company on such date, without any break or interruption in service and upon terms and conditions not less favourable than those subsisting in the concerned Transferor Company on the said date. d) Any proceedings now pending by or against the Transferor Companies be continued by or against the Transferee Company. e) All the properties, rights, liabilities, duties and powers of the Transferor Companies, be transferred w ..... 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