Bermuda Insurance Brokers Private Limited And Ors. vs Nagdevi Trading And Investment Company Limited

Santanu Kumar Mohapatra, Member(T)

This Joint petition has been filed by the Petitioner Companies under Sections 230 to 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and the National Company Law Tribunal Rules, 2016, for the purpose of the approval of the Scheme of Amalgamation of all the transferor companies with the transferee company. Copy of the said Scheme of Amalgamation (hereinafter referred as "Scheme") has been placed on record.

The "Transferor Company No. 1", M/s. Bermuda Insurance Brokers Private Limited, is a private company incorporated under the provisions of the Companies Act, 1956 on 4th December, 1980 and presently has its registered office at 105 Ashoka Estate, 24 Barakhamba Road, New Delhi- 110001.

The "Transferor Company No. 2", M/s. Neha Credit -and Investment Private Limited, is a private company incorporated under the provisions of the Companies Act, 1956 on 15th April, 1991, and presently has its registered office at 105 Ashoka Estate, 24 Barakhamba Road, New Delhi 110001.

The "Transferor Company No. 3", M/s. Vigil Investment Private Limited, is a private company incorporated under the provisions of the Companies Act, 1956 on 5th October, 1993 and presently has its registered office at 105 Ashoka Estate, 24 Barakhamba Road, New Delhi-110001.

The "Transferor Company No. 4", M/s. Cabot Trading and Investment Co Pvt Ltd, is a private company incorporated under the provisions of the Companies Act, 1956 on 5th March, 1982 and presently has its registered office at 105 Ashoka Estate, 24 Barakhamba Road, New Delhi-110001.

The "Transferor Company No. 5", M/s. Shri Atam Fabrics Limited, is a public company incorporated under the provisions of the Companies Act, 1956 on 2nd April, 1981 and presently has its registered office at 105 Ashoka Estate, 24 Barakhamba Road, New Delhi-110001.

The "Transferor Company No. 6", M/s. White Tiger Breweries and Distilleries Limited, is a public company incorporated under the provisions of the Companies Act, 1956 on 6th May, 1994, and presently has its registered office at 105 Ashoka Estate, 24 Barakhamba Road, New Delhi 110001.

The "Transferee Company", M/s. Nagdevi Trading and Investment Company Limited is a public company incorporated under the provisions of the Companies Act, 1956 on 30th May, 1980 and presently has its registered office at 105 Ashoka Estate, 24 Barakhamba Road, New Delhi - 110001.

A perusal of the petition discloses that initially the First Motion joint application seeking directions for convening or dispensing with the meetings of Equity Shareholders, Secured Creditors and Unsecured Creditors of all the petitioner companies was filed before this Bench vide Company Application (CAA) No. 184 /(PB) /2018 and based on such joint application moved under Sections 230 to 232 of the Companies Act, 2013, the meetings of the equity Shareholders, secured creditors and unsecured creditors of all the petitioner companies were dispensed with vide order dated 07.12.2018.

Thereafter, on 23.01.2019 the Petitioners were directed to carry out publication in the newspapers "Business Standard" (English, Delhi edition) and "Jansatta" (Hindi, Delhi edition). In addition to the public notice, notices were directed to be served on the Regional Director (Northern Region), Official Liquidator, Registrar of Companies, NCT of Delhi and Haryana, the Income Tax Department and to the other relevant sectoral regulators.

It is seen from the records that the Petitioners have filed an affidavit dated 01.03.2019 affirming compliance of the order passed by the Tribunal dated 23.01.2019. A perusal of the affidavit discloses that the petitioners have affected the newspaper publication as directed in one issue of the 'Business Standard' English edition on 25.02.2019 as well as in 'Business Standard' Hindi edition on 25.02.2019 in relation to the date of hearing of the petition. Further, the affidavit also discloses that copies of petition have been duly served to the Registrar of Companies, Regional Director, Northern Region, Official Liquidator and Income Tax Department in compliance of the order and in proof of the same acknowledgement made by the respective offices have also been enclosed.

The Regional Director has filed its representation and initially had raised some objections. However, the Regional Director has filed a report on 15.10.2019 and submitted that the reply of the petitioner companies appears to be satisfactory. In the said report the Regional Director has not raised any specific objection against the Scheme. The same fact has been duly recorded in the order dated 19.11.2019 passed by this Bench.

The Official Liquidator has filed its report wherein no material objection has been raised by them in relation to the Scheme. It is submitted in the report that the official liquidator has not received any complaint against the proposed Scheme from any person/party interested in the Scheme in any manner. It is further submitted that the affairs of the all the transferor companies do not appear to have been conducted in a manner prejudicial to the interest of its members or to public interest.

Despite several opportunities afforded no response has been filed by the Department of Income Tax. The same fact has been duly reflected in the order dated 19.11.2019. It is also mentioned in the same order that Official Liquidator has not raised any objection against the Scheme.

Be that as it may, it is clarified that there shall be no limitation on the power of the Income tax Department for recovery of pending Income Tax dues, including imposition of penalties etc. from all the petitioner companies as provided in law.

In the joint petition it has also been affirmed that no proceeding for inspection, inquiry or investigation under the provisions of the Companies Act, 2013 or under provisions of Companies Act, 1956 is pending against the Petitioner Companies.

Certificates of respective Statutory auditors of all 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.

The shareholders of the applicant companies are the best Judges of their interest, fully conversant with market trends, and therefore, their decision should not be interfered with by the 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.

In the case of Hindustan Lever Employees Union Vs. 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."

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.

The petitioner companies have filed an affidavit confirming that no objection has been received against the Scheme from any party or from any person interested in the Scheme in any manner.

It has also been affirmed in the petition that Scheme is in the interest of all the Transferor Companies and the transferee company including their shareholders, creditors, employees and all concerned.

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 report filed by the Regional Director, Northern Region, Ministry of Corporate Affairs, official liquidator and in the absence of any objection against the Scheme, there appears to be no impediment in sanctioning the present Scheme.

Consequently, sanction is hereby granted to the Scheme under Section 230 to 232 of the Companies Act, 2013.

The Petitioners shall however remain bound to comply with the statutory requirements in accordance with law.

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.

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.

THIS TRIBUNAL DO FURTHER ORDER

i. That all the Transferor Companies shall stand dissolved without following the process of winding-up; and

ii. That all the property, rights and powers of all the Transferor Companies, he 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; and

iii. That all the liabilities and duties of all the Transferor Companies, 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

iv. That all proceedings now pending by or against all the Transferor Companies, be continued by or against the transferee company; and

v. That all the employees of all 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 condition not less favorable than those subsisting in the respective Transferor Company on the said date.

vi. 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 all the Transferor Companies shall be dissolved and the Registrar of Companies shall place all documents relating to all 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

vii. 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.