1. This joint petition filed by the Petitioner Companies under section 230 to 232 of the Companies Act, 2013 (“Actâ€) read with Companies
(Compromises, Arrangements and Amalgamations) Rules, 2016 and the National Company Law Tribunal Rules, 2016 for the purpose of approval of
the composite scheme of amalgamation (“Schemeâ€).
2. On perusal of record of this Tribunal in relation to the First motion joint application filed by the petitioner companies bearing Application no.
CA(CAA) no. 48/ND/2019 and based on the representations made in the joint application the petitioners were directed to convene meetings of all the
shareholders and creditors vide order dated 22.05.2020 read with order dated 29.05.2020 passed by this Bench.
3. Subsequently, the meetings as directed aforesaid were duly convened on 10.07.2020 and the Scheme was unanimously approved. The reports of
the Chairperson and Scrutinizer have been placed on record.
4. Subsequent to the meetings, as directed, this present Petition was filed. Vide order dated 05.08.2020 the Petitioner Companies were directed to
carry out the publication in the newspapers namely, ‘Business Standard’ (English, Delhi edition and Hindi, Delhi edition). In addition to the public
notice, notices of petition in terms of section 230(5) of the Companies Act. 2013 were directed to be served upon statutory authorities namely, Central
Government through Regional Director (Northern Region), Registrar of Companies of National Capital Territory of Delhi and Haryana, Income Tax
authorities and other sectoral regulators.
5. It is seen from the records that the Petitioner Companies have filed respective affidavits dated 21.10.2020 confirming compliance of the order
05.08.2020. A perusal of the affidavits disclose that the Petitioner Companies have jointly served the notice of petition upon the office of respective
Income Tax Authorities, Registrar of Companies and Regional Director and BSE. Further, the Petitioner Companies have effected the newspaper
publication as directed in the ‘Business Standard’ (English, Delhi edition and Hindi, Delhi edition) on, in relation to date of hearing on
24.09.2020. It is further affirmed in the affidavit that there is no other sectoral regulator who may have significant bearing on the operations of the
Petitioner Companies.
6. The Regional Director has filed its report and observed that the transferee company has field its Balance Sheet till 2018-19. Further it is stated that
pursuant to Rule 25A of the CAA rules a foreign company may be merged with a company in India subject to obtaining approval of Reserve Bank of
India. However, in terms of Rule 9 of Foreign Exchange Management (Cross Border Merger) Regulations, 2018 the present Scheme comes within
the ambit of Deemed approval for ‘Cross Border Merger’. The Regional Director has not raised any objection against the approval of the
Scheme.
7. The Department of Income Tax has filed its report and submitted that there are some pending liabilities and proceedings in respect of transferee
company and therefore it is prayed that approval of the Scheme may be granted subject to the rights of Income Tax Department, to initiate or continue
proceedings, to recover any demand payable by transferee company and to determine tax implications of the present scheme in accordance with
Income Tax Act, 1961. Similar observation has been made in respect of transferor company. That apart no serious objection against the sanctioning of
the Scheme has been raised by the department.
8. In view of the submission made by the Income Tax Department it is clarified that there shall be no bar on the power of the Income tax Department
for initiation of proceedings and recovery of pending Income Tax dues, including imposition of penalties etc as per in law.
9. It is pertinent to mention here that BSE through e-letter dated 01.09.2020 has observed that the petitioners have not complied with SEBI’S
circular dated 10.03.2017. In response to which the petitioners have filed an affidavit dated 22.10.2020 and submitted that the petitioner companies
have already submitted their documents and SEBI has already taken on record their documents for compliance. This fact has been confirmed through
letter dated 21.10.2020 sent by BSE.
10.1n the joint petition it has also been affirmed that no proceedings for inspection, inquiry or investigation under the provisions of the Companies Act,
2013 or under provisions of Companies Act, 1956 are pending against the Petitioner Companies.
11. Certificates of respective Statutory auditors of both the petitioner companies have been placed on record to the effect that Accounting Treatment
proposed in the Scheme of Amalgamation is in conformity with the Accounting Standard notified by the Central Government as specified under the
provisions of Section 133 of the Companies Act, 2013.
12. The shareholders of the petitioner companies are the best Judges of their interest, fully conversant with market trends, and therefore, their decision
should not be interfered with by Tribunal for the reason that it is not a part of judicial function to examine entrepreneurial activities and their
commercial decisions. It is well settled that the Tribunal evaluating the Scheme of which sanction is sought under Section 230-232 of the Companies
Act of 2013 will not ordinarily interfere with the corporate decisions of companies approved by shareholders and creditors.
13. In the case of Hindustan Lever Employees Union V. Hindustan Lever Limited (1995) 5 SCC 491 the three judges Bench of Hon’ble Supreme
Court held that:
‘A company court does not exercise appellate jurisdiction over a scheme and its jurisdiction is limited to ascertaining fairness, justness
and reasonableness of the Scheme and to ensure that neither any law has been violated or public interest compromised in the process.’
14. Right to apply for the sanction of the Scheme has been statutorily provided under Section 230-234 of the Companies Act, 2013 and therefore, it is
open to the applicant companies to avail the benefits extended by statutory provisions and the Rules.
15. It has also been affirmed in the petition that the Scheme is in the interest of all the transferor companies and the transferee company including
their shareholders, creditors, employees and all concerned.
16. In view of the foregoing, upon considering the approval accorded by the members and creditors of the Petitioner companies to the proposed
Scheme, and the affidavits filed by the Regional Director, Northern Region, Ministry of Corporate Affairs and the report of official liquidator, there
appears to be no impediment in sanctioning the present Scheme.
17. Consequently, sanction is hereby granted to the Scheme under Section 230 to 232 of the Companies Act, 2013.
18. The Petitioners shall however remain bound to comply with the statutory requirements in accordance with law.
19. Notwithstanding the above, if there is any deficiency found or, violation committed qua any enactment, statutory rule or regulation, the sanction
granted by this court to the scheme will not come in the way of action being taken, albeit, in accordance with law, against the concerned persons,
directors and officials of the petitioners.
20. While approving the Scheme as above, we further clarify that this order should not be construed as an order in any way granting exemption from
payment of stamp duty, taxes or any other charges, if any, and payment in accordance with law or in respect to any permission/compliance with any
other requirement which may be specifically required under any law.
21. THIS TRIBUNAL DO FURTHER ORDER
1. That the Transferor Company shall stand dissolved without following the process of winding-up; and
2. That all the property, rights and powers of the Transferor Company, be transferred without further act or deed, to the transferee
company and accordingly the same shall pursuant to Section 232 of the Companies Act, 2013, be transferred to and vest in the transferee
company.
3. That all the liabilities and duties of the Transferor Company, be transferred without further act or deed, to the transferee company and
accordingly the same shall, pursuant to Section 232 of the Act, be transferred to and become the liabilities and duties of the transferee
company; and
4. That all proceedings now pending by or against all the Transferor Company, be continued by or against the transferee company; and
5. That all the employees of the Transferor Company 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 condition not less favorable than those subsisting in the concerned Transferor Companies on the said date.
6. That Petitioner companies shall within thirty days of the date of the receipt of this order cause a certified copy of this order to be
delivered to the Registrar of Companies .for registration and on such certified copy being so delivered to the Transferor Company shall be
dissolved and the Registrar of Companies shall place all documents relating to the Transferor Companies registered with him on the file
kept by him in relation to the transferee company and the files relating to all the petitioner companies shall be consolidated accordingly;
and
7. That any person interested shall be at liberty to apply to the Tribunal in the above matter for any directions that may be necessary.
The petition stands disposed of in the above terms.
Let copy of the order be served to the parties.
