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TMI Blog2023 (5) TMI 1423X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices Limited and their respective shareholders and creditors ("Scheme"). 4. The First Petitioner Company builds, owns and operates telecommunication towers, optic fibre cable and other assets and provide these passive telecommunication infrastructure assets on a shared basis to wireless service providers and other telecommunication service providers under long term contracts. The Second Petitioner Company is engaged in the business of providing integrated manpower solutions including sourcing, recruitment, training, engagement and staffing services to other companies. 5. The registered office of Reliance Projects & Property Management Services Limited ("Amalgamated Company") is located in Ahmedabad, Gujarat. Thus, the Amalgamated Company has filed Company Petition No. C.P.(CAA)/5(AHM)2023 before the jurisdictional Tribunal viz., National Company Law Tribunal, Ahmedabad Bench, seeking its sanction to the Scheme. 6. The learned Counsel for the Petitioner Companies submits that the rationale mentioned in the Scheme is as under: 1. "RITL is into the business of passive telecommunication infrastructure. By order dated May 15, 2018, the Tribunal (as defined hereinafter) initiated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Petitioner Companies submits that vide the said Order, the Company Scheme Application was admitted and the meetings of the equity shareholders and unsecured creditors of the Petitioner Companies were dispensed with in view of consent affidavits provided by the all the equity shareholders and unsecured creditors representing more than 90% in value of the respective Petitioner Companies. Since the Petitioner Companies did not have any preference shareholders and secured creditors, the question of convening and holding meetings of the secured creditors and preference shareholders of the Petitioner Companies did not arise. 9. Learned Counsel for the Petitioner Companies submits that the Hon'ble Tribunal admitted the Company Scheme Petition on 24th February 2023 and fixed 23rd March 2023 as the date for hearing and final disposal of the Company Scheme Petition. The Petitioner Companies were directed to cause publication of the notice of hearing of the Company Scheme Petition, at least 10 (ten) days before the date fixed for final hearing in 'Business Standard' in English and 'Navshakti' in Marathi both having wide circulation in Maharashtra. Learned Counsel for the Petitioner Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as filed its report dated April 19, 2023 ("Report") and has presented certain information derived from the records of the case and has prayed for kind consideration and disposal of the case as the Hon'ble Tribunal may deem fit and proper. The observations of the Regional Director and the reply of the Petitioner Companies are set out in tabular format below: Sr. No. of Paragraph 2 Observations in Report filed by the Regional Director Reply of Petitioner Companies a) That on examination of the report of the Registrar of Companies, Mumbai dated 24 March 2023 for Petitioner Companies (Annexed as Annexure A-1) that the Petitioner Companies fall within the jurisdiction of ROC, Mumbai. It is submitted that no complaint and/ or representation regarding the proposed scheme of Amalgamation has been received against the Petitioner Companies. Further, the Petitioner Transferor Company No. 2 has filed Financial Statements up to 31st March 2022, Transferor Company No. 1 has filed financial statement up to 31st March 2019, hence Petitioner Transferor Company No. 1 shall undertake to do compliance regarding filing of annual statement with concerned ROC before due date for FY 2021-22. The R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raph 2(a)(ii)(b) of the Report of the Regional Director is concerned, the Petitioner Companies state that, the registered office of Reliance Projects & Property Management Services Limited ("Amalgamated Company" or "RPPMSL") is situated in the State of Gujarat, therefore, the Amalgamated Company has filed Company Petition No. C.P.(CAA)/5(AHM)2023) for seeking approval of the Hon'ble National Company Law Tribunal, Ahmedabad Bench to the Scheme. As far as the observation made in Paragraph 2(a)(ii)(c) of the Report of the Regional Director is concerned, the Petitioner Companies state that, one of vendors of the Transferor Company No. 1, Ericsson India Private Limited filed an application under Section 7 of the Insolvency & Bankruptcy Code, 2016 ("IBC"). This Hon'ble Tribunal, vide its order dated May 15, 2018, admitted the said application and Corporate Insolvency Resolution Proceedings ("CIRP") were initiated against the Transferor Company No. 1 in terms of the IBC. The Hon'ble Tribunal vide its order dated May 30, 2018 had stayed the CIRP and subsequently by its order dated April 30, 2019 vacated the said stay. The resolution plan submitted by the Amalgamated Company was appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with the order of the Hon'ble Supreme Court of India. In accordance with the Plan Implementation Orders, resolution amount was deposited in the escrow account on December 22, 2022 in full and final settlement of all claims in accordance with the Resolution Plan. Upon deposit of the resolution amount in the escrow account, all amounts due to the creditors stood discharged. The Transferor Company No. 1 is in the process of obtaining No Dues Certificate from all the lenders and upon amalgamation, the Amalgamated Company will complete the procedural act of filing requisite forms for removing the charge in due course once the amounts in the escrow account are distributed to the creditors. As far as the observation made in Paragraph 2(a)(ii)(f) of the Report of the Regional Director is concerned, the Petitioner Companies state that, in terms of the Resolution Plan, all the shares (including preference shares) held by the erstwhile shareholders of the Transferor Company No. 1 were cancelled on December 22, 2022 and the Amalgamated Company subscribed to the equity shares of First Petitioner Company to acquire 100% control over the First Petitioner Company in acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally accepted accounting practices in India, provisions of the Act and accounting standards as notified by Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time. d) The Hon'ble Tribunal may kindly direct the Petitioner Companies to file an affidavit to the extent that the Scheme enclosed to the Company Application and Company Petition are one and same and there is no discrepancy, or no changes made. The Petitioner Companies state that, subsequent to filing of the Company Scheme Application with the Hon'ble Tribunal, the Board of Directors of the Petitioner Companies vide the respective resolutions dated March 11, 2023 had modified the Appointed Date 1 in the Scheme. A copy of the Affidavit dated March 16, 2023, filed by the Petitioner Companies with the Hon'ble Tribunal placing on record the modified Scheme has been served upon the Regional Director vide letter dated April 3, 2023. A copy of the acknowledgement received from the Regional Director evidencing service of the said Affidavit is annexed hereto and marked as Annexure 2. Except as mentioned above, no other modification/ change has been carried out in the Scheme. e) The Petitioner Companies u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Scheme. The Petitioner Companies further state that, the Scheme is in compliance with the requirements of circular no. F. No. 7/12/2019/Cl-1 dated 21.08.2019 issued by the Ministry of Corporate Affairs. The Petitioner Companies states that, the Income Tax Authority concerned of the Transferor Company No. 1 and Transferor Company No. 2 have already filed their respective no-objection letters with the Hon'ble Tribunal. A copy of the said no-objection letters issued by the Income Tax Authority concerned is annexed hereto and marked as Annexure 3 Colly. In response to the said letter issued by the Income Tax Authority concerned of the Transferor Company No. 1, the Transferor Company No. 1 has filed an Affidavit dated April 19, 2023 with the Hon'ble Tribunal. A copy of the said Affidavit is annexed hereto and marked as Annexure 4. The Petitioner Companies undertake to comply with the directions of the Income Tax Authorities concerned in accordance with applicable law. h) Petitioner Companies shall undertake to comply with the directions of the concerned sectorial Regulatory including Ministry of Telecommunication as Reliance Infratel Limited builds, owns and operates telecommunica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence received from CEIB for financial irregularities and bank default and siphoning of funds. Therefore, it is submitted that the Petitioner Companies, Directors, KMP and any other connected persons may be directed to undertake to comply with notice, order, prosecutions, adjudications which may be taken by the Ministry of Corporate Affairs as per law on submission of inspection report in the matter of subject company. The Petitioner Companies state that, inspection pertains to a period prior to the acquisition of the Transferor Company No. 1 by the Amalgamated Company through the IBC process. The current management of the Transferor Company No. 1 is in the process of responding to the inspection and after the amalgamation of Transferor Company No. 1, shall be dealt with by the Amalgamated Company in accordance with the provisions of the Resolution Plan and applicable law 15. The Regional Director has raised only the above observations and has not raised any objections to the Scheme. 16. The Official Liquidator, Bombay High Court ("Official Liquidator") has filed its report dated April 19, 2023 ("OL Report") making the following observations, which are set out along with the rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company No. 1 and the Tribunal may require to explain the company whether it shall impinge upon the approval of proposed scheme of merger of Transferor Companies with Transferee Company. It has further been observed that for the contravention of section 204 of Companies Act, 2013 relating to Secretarial Audit has been served upon the Transferor Company No. 2 to which company has replied and attributed the alleged violation to human error in filing e-form AOC-4 XBRL 2016-17, otherwise the company was in compliance with the provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. In this respect Hon'ble Tribunal may require the company to explain whether Registrar of Companies has initiated any penal action for the alleged contravention of the provisions of the Section 204 of Companies Act, 2013. In case, the penal action has been initiated then the status of the same may be apprised to Hon'ble Tribunal. With respect to the observation on inspection of the Transferor Company No. 1 under Section 206 of the Companies Act, 2013, the Petitioner Companies state that, inspection pertains to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Petitioner Companies undertake to comply with the directions of the Income Tax Authorities in accordance with applicable law. The First Petitioner Company has also filed an Affidavit dated April 19, 2023, placing on record the no objection letter issued by the Income Tax Authority concerned of the First Petitioner Company. 20. The Goods and Services Tax Authority of the First Petitioner Company vide its letter dated March 17, 2023 has intimated this Tribunal that, there are several tax demands of service tax/ CGST pending against the First Petitioner Company with different authorities as well as claims launched with the Resolution Professional from time to time. In response to the said letter, the First Petitioner Company and the Amalgamated Company vide their Affidavit dated April 19, 2023, have placed on record their responses to the observations of the Goods and Services Tax Authority of the First Petitioner Company. The Learned Counsel for the Petitioner Companies further submits that, the First Petitioner Company undertakes to comply with the directions of the Goods and Services Tax Authority in accordance with applicable law. 21. From the material on record, the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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