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Judgment
Kishore Vemulapalli, Member (Judicial)
This Bench is convened through Video Conferencing.
The Learned Counsel for the Applicant Companies submits that the present Scheme is a Scheme of Amalgamation between First Transferor Company, Second Transferor Company, Third Transferor Company, Fourth Transferor Company, Fifth Transferor Company into Sixth Applicant/ Transferee Company and their respective Shareholders under sections 232 read with Section 230 of the Companies Act, 2013.
The Learned Counsel for the Applicant Companies submits that:
a. First Applicant Company is engaged in the business of: “manufacturers, processors, designers, buyers, sellers, exporters, importers, and/or otherwise dealers in printed and lacquered metal sheets, components, rigid cans, containers including those known as ‘Crown Corks’ and right processed metal articles.”
b. Second Applicant Company is engaged in the business of:
“invest in, acquire, hold, underwriter, sell or otherwise deal in any Shares, Stocks, Debentures, Debenture-Stock, Bonds, Negotiable Instruments, Securities of any Company, Government, Public Body or Authority, Municipal and Local Bodies, whether in India or abroad, by original subscription, Tender, purchase, exchange or otherwise and to subscribe for the same either conditionally or otherwise, and to exercise and enforce all rights and powers conferred by or incidental to the ownership thereof and to carry on business as share and Stock Brokers. To provide finances for any company, Body Corporate Firm Person or Association by way of advances, loans, deposits inter corporate deposits, Bridge Finance, hire purchases, lease finance, underwriting or in other forms of finance, to finance industrial enterprises.”
c. Third Applicant Company is engaged in the business of :
“merchant banking in all its aspects, to act as Manager to issue, adviser to the issue, Registrar to the issue, transfer agent to the issue and offers, whether by way of public offer or otherwise, of shares, debentures, bonds, units, participation certificates, deposit certificates, notices, bills, warrants or any other instrument whether or not transferrable or negotiable, commercial or other paper of scripts.”
d. Fourth Applicant Company is engaged in the business of:
“dealer, trader, importer, exporter of all and to deal in textiles items, yarns, fabrics, iron, steels, aluminum items, engineering goods, electronic items, machineries, chemicals, drugs, cosmetics, detergents, rubber, plastic items, tyre tubes, computers, software’s, automobiles accessories, agriculture products, grocery, provisions, garments, papers, packing, materials, stones and minerals.”
e. Fifth Applicant Company is engaged in the business of:
“acquire, hold, exchange, sell and deal in shares, stocks, debentures, debenture-stocks, bonds, obligations and securities issues or guaranteed by any company constituted or carrying on business in India, United Kingdom or in any colony or dependency, or possessions thereof, or in any foreign country, and debentures, debentures stocks, bonds, obligations and securities issued or guaranteed by any Government, Sovereign, Ruler, Commissioner, Public Body authority, supreme, Municipal, local or otherwise whether in India, the United Kingdom or elsewhere.
To amalgamate with any other company of which all or any of their objects companies having similar to the objects of the company in any manner whether with or without the liquidation.
To acquire in any such shares, stocks, debentures, debentures-stocks, bonds, obligations or securities, by original subscription, tender, purchase, exchange or otherwise and to subscribe for the same either conditionally or otherwise and to guarantee and underwrite the subscription thereof, and exercise and enforce all rights and powers conferred by or incident to the ownership thereof.
To barrow or raise or secure the payment of money in such manner as the Company shall think fit and in particular by the issue of debentures, debenture-stocks, bonds, obligations, notes and securities of all kinds and to frame constitute and secure the same as may seem expedient with full powers to make the same transferrable by delivery or by instrument of transfer or otherwise, and either perpetual or terminable and either redeemable or otherwise, and to charge or secure the same by trust deeds or otherwise, on the undertaking of the company or upon any specific property and rights, present and future of the Company (including and if thought fit, uncalled capital) or otherwise howsoever. To advance and lend money and assets of all kinds upon such terms as may be thought fit.
To facilities and encourage the creation, issue or conversion of debenture, debenture-stocks, bonds, obligations, shares, stocks and securities and to take part in the conversion and business concerns.”
f. Sixth Applicant Company is engaged in the business of
“To carry on in India or elsewhere the business of buying, selling, importing, exporting, trading, marketing, dealing, distributing or otherwise deal in sports, health, nutritious food/drinks or food/drinks supplements and other related products whether medicinal or otherwise.”
The Board of Directors of the Applicant Companies approved the Scheme of Amalgamation Vide resolutions as mentioned below :-
Sr No.
Applicant Number
Date of Resolution
1
First Applicant
May 04, 2021
2
Second Applicant
May 03, 2021
3
Third Applicant
May 04, 2021
4
Fourth Applicant
May 03, 2021
5
Fifth Applicant
May 04, 2021
6
Sixth Applicant
May 03, 2021
The Appointed Date of the Scheme is April 01, 2021.
That the integration, consolidation and amalgamation of the Transferor Companies with the Transferee Company would inter alia have the following benefits:
i. Pooling of the management, and administration to result in saving of costs.
ii. Eliminating duplication of work in area likes accounts, company law and tax assessments and resulting in cost savings.
iii. Ease in decision making at the group level.
iv. Reflecting the consolidated net worth of the companies in one balance sheet.
v. The amalgamation of all companies to the scheme would result in benefit to the shareholders, creditors and all other stakeholders of all companies and all concerned and the scheme shall not in any manner be prejudicial or adversely affecting the interest of concerned shareholders, creditors and other stakeholders or the general public at large.
The Learned Counsel of the Applicant Companies submits that with the above objectives, management of Applicant Companies considered that the proposed Scheme of Amalgamation would be in the interest of the respective entities and their respective Shareholders, Employees and Creditors.
The authorized, issued, subscribed and paid-up share capital of the First Transferor Company as on March 31, 2021 is as under:
Share Capital
Amount in Rs.
Authorized Share Capital
50,000 Equity Shares of Rs.10/- each
5,00,000
Total
5,00,000
Issued, Subscribed and Paid-Up Capital
50,000 Equity Shares of Rs.10/- each
5,00,000
Total
5,00,000
The authorized, issued, subscribed and paid-up share capital of the Second Transferor Company as on March 31, 2021 is as under:
Share Capital
Amount in Rs.
Authorized Share Capital
10,000 Equity Shares of Rs.10/- each
1,00,000
Total
1,00,000
Issue, Subscribed and Paid-up Capital
10,000 Equity Shares of Rs. 10/- each
1,00,000
TOTAL
1,00,000
The authorized, issued, subscribed and paid-up share capital of the Third Transferor Company as on March 31, 2021 is as under:
Share Capital
Amount in Rs.
Authorized Share Capital
2,50,000 Equity Shares of Rs. 10/- each
25,00,000
Total
25,00,000
Issued, Subscribed and Paid-Up Capital
1,00,000 Equity Shares of Rs. 10/- each
10,00,000
Total
10,00,000
The authorized, issued, subscribed and paid-up share capital of the Fourth Transferor Company as on March 31, 2021 is as under:
Share Capital
Amount in Rs.
Authorized Share Capital
10,000 Equity Shares of Rs. 10/- each
1,00,000
Total
1,00,000
Issued, Subscribed and Paid-Up Capital
10,000 Equity Shares of Rs. 10/- each
1,00,000
Total
1,00,000
The authorized, issued, subscribed and paid-up share capital of the Fifth Transferor Company as on March 31, 2021 is as under:
Share Capital
Amount in Rs.
Authorized Share Capital
5,000 Equity Shares of Rs.100/- each
5,00,000
Total
5,00,000
Issued, Subscribed and Paid-Up Capital
2,000 Equity Shares of Rs.100/- each
2,00,000
Total
2,00,000
The authorized, issued, subscribed and paid-up share capital of the Transferee Company as on March 31, 2021 is as under:
Share Capital
Amount in Rs.
Authorized Share Capital
35,000 Equity Shares of Rs. 100/- each
35,00,000
Total
35,00,000
Issued, Subscribed and Paid-Up Capital
12,993 Equity Shares of Rs. 100/- each
12,99,300
Total
12,99,300
That the Petitioner Companies submits details of Equity Shareholders of the Applicants Companies is stated below :-
Name of the Company
Particular
Equity Shareholders
Balaji Crown and Containers Private Limited
No. of Equity Shareholders
5
Apurva Caplease and Finance Private Limited
No. of Equity Shareholders
14
Skyland Securities Private Limited
No. of Equity Shareholders
13
Sorabh Trading Private Limited
No. of Equity Shareholders
14
Premier Commercial Company Private Limited
No. of Equity Shareholders
4
Bigflex Enterprises Private Limited
No. of Equity Shareholders
14
All shareholders of the petitioner Companies have filed their Affidavits signifying Consent to the proposed scheme. In view of this, the meetings of the Equity Shareholders of the Applicant Companies are hereby dispensed with.
That there are no Secured Creditors in the Transferor Companies and Transferee Company.
The details of Unsecured Creditors and details of consent from Unsecured Creditors in the form of affidavit is mentioned below:
Name of the Company
Particulars
Unsecured Creditors
Total outstanding Amount in Rs.
Balaji Crown and Containers Private Limited
No. of Unsecured Creditors
1
5,000/-
Apurva Caplease and Finance Private Limited
No. of Unsecured Creditors
2
19,17,360/-
Skyland Securities Private Limited
No. of Unsecured Creditors
1
37,625/-
Sorabh Trading Private Limited
No. of Unsecured Creditors
2
52,360/-
Premier Commercial Company Private Limited
No. of Unsecured Creditors
3
1,42,27,360/-
Bigflex Enterprises Private Limited
No. of Unsecured Creditors
2
1,26,73,369/-
In view of the fact that 100% in value of the Unsecured Creditors of the Transferor Company 1, Transferor Company 2, Transferor Company 3, Transferor Company 4, Transferor Company 5 with the Transferee Company have given affidavits consenting to the Proposed Scheme and for dispensing with the Tribunal Convened meeting, the meetings of the Unsecured Creditors of the Applicant Companies are hereby dispensed with.
The Learned Counsel for the Applicant Companies submitted that The Scheme (as defined hereinafter) envisages the amalgamation of the five Transferor Companies into the Transferee Company, resulting in the consolidation of business of the Transferor Companies in one entity and strengthening the position of the merged entity, by enabling it to harness and optimize the synergies of the Transferor Companies. Accordingly, it would be in best interests of the Transferor Companies and the Transferee Company and their respective Shareholders and Creditors.
It was further submitted that the amalgamation of the Transferor Companies into the Transferee Company is in line with the global trends to achieve size, scale, integration and greater financial strength and flexibility and in the interests of maximizing shareholder value. The merged entity is to achieve higher long-term financial returns that could be achieved by the companies individually. The Transferor Companies and the Transferee Company believe that the financial, managerial and technical resources and personnel capabilities, skills, expertise and technology of the Transferor Companies and the Transferee Company pooled in the merged entity, will lead to increased competitive strength, cost reduction and efficiencies, productivity gains and logistic advantages, thereby significantly contributing to future growth. Therefore, the management of Transferor Companies and the Transferee Company believe that the Scheme of Amalgamation would benefit the respective companies and other stake holders of respective companies, inter-alia, on account of following reasons:
a) Pooling of the management and administration to result in saving of costs.
b) Pooling of human and various other resources to result in saving of costs
c) Eliminating duplication of work in areas like accounts, compliances under various laws and tax assessments resulting in cost savings.
d) Ease in decision making at the group level.
e) Reflecting the consolidated net worth of the companies in one Balance sheet.
The amalgamation and vesting of the Transferor Companies with the Transferee Company, with effect from the Appointed Date is in interest of the shareholders, creditors, stakeholders and employees as it would enable a focused business approach for the maximization of benefits to all the stakeholders and for the purposes of synergies of business.
Further, the unsecured creditors of the Applicant Companies are also not likely to be affected by the Scheme being approved as post amalgamation they will be paid in the ordinary course of business.
That the Applicant Companies are directed to serve notices along with copy of Scheme under the provisions of Section 230 (5) of the Companies Act, 2013 and Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 upon the-
(i) Central Government through the office of Regional Director, Western Region, Mumbai;
(ii) Jurisdictional Registrar of Companies;
(iii) Jurisdictional Income Tax Authority within whose jurisdiction the Applicant Company’s assessment are made; and the Nodal Authority in the Income Tax Department having jurisdiction over such authority i.e. Pr. CCIT, Mumbai, Address:- 3rd Floor, Aayakar Bhawan, Mahrishi Karve Road, Mumbai – 400 020, Phone No. 022-22017654 [E-mail: Mumbai.pccit@incometax.gov.in];
(iv) Jurisdictional GST Authority(s) (proper officer), within whose jurisdiction such companies are assessed to tax under GST law;
(v) Ministry of Corporate Affairs;
(vi) SEBI in case of Petitioner No. 3;
(vii) Reserve Bank of India in case of Petitioner Company No. 2 & 5; and
(viii) Any other Sectoral/ Regulatory Authorities relevant to the Petitioner Companies or their business.
The Transferor Companies are also directed to serve the Copy of Scheme upon the Official Liquidator, pursuant to section 230(5) of the Companies Act, 2013 and as per Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.
The Notice shall be served through by Registered Post-AD/ Speed Post/ Hand Delivery and email along with copy of Scheme and state that “If no response is received by the Tribunal from the concerned Authorities within 30 days of the date of receipt of the notice it will be presumed that the concerned Authorities has no objection to the proposed Scheme”. It is clarified that notice service through courier shall be taken on record only in cases where it is supported with Proof of Delivery having acknowledgement of the noticee.
The Applicant Companies will submit –
a. Details of Corporate Guarantee, Performance Guarantee and Other Contingent Liabilities, if any.
b. List of pending IBC cases, if any, along with all other litigation pending against the Applicant Companies having material impact on the proposed Scheme.
c. The Applicant Companies shall submit details of all Letters of Credit sanctioned and utilized as well as Margin Money details; if any.
In case of Shareholder(s) other than individuals, the Petitioner Companies shall file Board Resolution recording the fact of consent and the person who is authorized to give consent for waiver of the meeting along with extract of minutes of relevant meeting.
The Applicant Companies will file Affidavit of Service in the Registry with regard to the directions given in this Order and do report to this Tribunal that the directions regarding the issue of notices have been duly complied with.
Order accordingly.