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Judgment
Rohit Kapoor , Member(J)
The Petitioner Companies have preferred the present application under Sections 230-232 of the Companies Act, 2013 seeking sanction of this Tribunal to the Proposed Scheme of Amalgamation between Cachar Ispat Private Limited (CIPL) and Ladi Steel Industries Private Limited (LSIPL) and with their respective Shareholders.
The Rationale of the proposed company Scheme is stated as under:
a) Considering the consents received by the Companies from their shareholders, the meetings of Equity shareholders of both the applicant companies be dispensed with.
b) Considering the consents received by the Companies from their creditors, the meetings of creditors of both the applicant companies be dispensed with.
c) It is prayed that necessary directions be given as to the notice to be given to the sectorial regulators or authorities as required under Section (5) of Section 230 of the Act.
d) To sanction the proposed Scheme of amalgamation of the Transferor Company with the Transferee Company whereby all the properties, assets, rights and claims whatsoever of the Transferor Company with its entire undertaking together with all rights and obligations relating thereto are proposed to be transferred to and vest in the Transferee Company on terms and conditions as fully stated in the Scheme of Amalgamation.
e) To permit the amalgamation of both the Companies in accordance with the provision of the Act and in the greater interest of both the Companies.
f) To permit filing of application by the Petitioners for second motion for sanctioning of the Scheme of Amalgamation.
g) To pass such other order or orders or further order be made affording complete relief to the petitioners as to the authority deem fit and proper.
This Company Petition filed by Cachar Ispat Private Limited (CIPL), the Transferor Company and Ladi Steel Industries Private Limited (LSIPL), the Transferee Company came up for hearing for sanction of Scheme of Amalgamation between the Transferor and the Transferee Company and their respective shareholders. A copy of the said Scheme of Arrangement has been annexed hereto and marked as Annexure "7".
It is submitted that:
The Transferor Company is inoperative for last few years and is not carrying on its main business activities for some years because of the fact that the Plant and Machinery and other Fixed Assets owned by it have become obsolete. The Transferor Company is having reserves, surplus and various resources in the form of assets generated from its previous business activities which the Transferee Company intends to utilize for its business activities and hence your petitioners have decided to amalgamate with each other so that the assets and the resources of the Transferor Company can be properly utilized and the business activity of the Transferee Company can be carried on smoothly and in a better manner.
4.1. The Transferee Company is looking forward to further expansion of its production and the availability of the Transferor Company's resources would be of great convenient in this respect. In view, inter alia, of the aforesaid, operationally it is considered more convenient to merge the Transferor Company with the Transferee Company than vice versa.
4.2. The amalgamation will enable appropriate consolidation of the undertakings of the Transferor Company and the Transferee Company. The business of the amalgamated entity will be carried on more efficiently and economically as a result, inter alia, of pooling and more effective utilization of the combined resources of the said companies and substantial reduction in costs and expenses which will be facilitated by and follow the amalgamation.
4.3. The merger will also result in the formation of a larger company having greater capacity to raise and access funds for growth and expansion of its business and marketing on more favorable terms.
4.4. All the properties, rights and interest of the 'Transferor Company' be transferred to and be vested without any further act or deed in Transferee Company and accordingly the same shall pursuant to Section 232 (1) of the Companies Act, 2013 be transferred to and be vested in the Transferee Company for all the estates and interest of 'Transferor Company' subject never the less to all charges, now affecting the same.
4.5. All the liabilities and duties of 'Transferor Company' be transferred without further act or deed and accordingly the same shall pursuant to Section 232 (1) of the Companies Act, 2013 be transferred to and become the liabilities and duties of 'Transferee Company'.
4.6. All proceedings and/or suits and/or appeals now pending by or against 'Transferor Company' be continued by or against 'Transferee Company'.
The necessary particulars about the Applicants Companies are reproduced below:
Sl. No. A
Transferor Company
CACHAR ISPAT PRIVATE LIMITED (CIPL)
A1
Shares
Objects of Company (In Brief)
Authorized Share Capital of
Rs. 50,00,000/- (Rupees Fifty lakhs Only) and Issued, Subscribed and Paid-up Capital of Rs. 34,74,500/- (Rupees Thirty Four Lakhs Seventy Four Thousand Five Hundred Only)
A2
· To carry on the business as manufacturers, dealers, traders of Steel Ingots, Billets and castings by melting M.S scraps in induction melting furnace, iron masters, iron founders, iron workers, steel makers, electric and blast furnace proprietors, brass founders and metal makers, refiners, cold twisted deformed bar makers, M.S plain round, TMT Rod and bar makers, and workers generally, iron and steel Rollers and Rerollers, converters, smiths, tin palte makers, manufacturers of machineries, tools and implements, boiler makers and metallurgists.
Sl. No. B
Transferee Company
LADI STEEL INDUSTRIES LIMITED (LSIPL)
PRIVATE
B1
Shares
Authorized Share Capital of
Rs. 1,75,00,000/- (Rupees One Crore Seventy Five Lakhs Only) and Issued, Subscribed and Paid-up Capital of Rs. 1,74,83,100/- (Rupees One Crore Seventy Four Lakhs Eighty Three Thousand and One Hundred only)
B2
Objects of Company (In Brief)
· To carry on the business of manufacturers, processor, fabricators, drawers, rollers and re-rollers of ferrous and non- ferrous metals, steels, alloy steels, special and stainless steels, shaftings bars, rods, flats, squares from scraps, billets, ingots, including wires, nails, screws, bolts, nuts, rivets, expanded metal hinges, plates, sheet utensils, stripes, hoops, rounds, circles, angles, steel tubes and pipe fittings, tools, implements plants, machineries and to manufacture, process, buy, sell, import, export or otherwise deal in any other products of Iron, steel, brass, copper, lead and any other ferrous metals of all sizes, specifications and descriptions.
The Petitioner Companies have submitted that the Board of Directors of both the Transferor Company and the Transferee Company, have at their respective meetings, by resolutions passed unanimously, approved the said Scheme of Amalgamation on 25th June, 2021. Certified copies of the said board resolutions of the Transferor Company and the Transferee Company have been annexed to the Petition marked as Annexure "8".
The Petitioners have submitted the following Details of Directors of the Transferor Company as well as the Transferee Company:
TRANSFEROR COMPANY:
Name
DIN
Address
Designation
Date of
appointment
Gulab Devi Surana
00384469
12, M.S Road,
Fancy Bazar, Guwahati-781001,
Assam
DIRECTOR
17-03-2018
Rajesh Choraria
02676034
Arihant, Ward No- 23, Central Road, Silchar, Cachar,
Assam-788001
DIRECTOR
31-10-2009
TRANSFEREE COMPANY:
Name
DIN
Address
Designation
Date of
appointment
Rakesh Kumar Surana
00375068
12, M.S Road,
Fancy Bazar, Guwahati-781001,
Assam
DIRECTOR
15-07-1986
Gulab Devi Surana
00384469
12, M.S Road,
Fancy Bazar,
Guwahati-781001, Assam
DIRECTOR
23-04-2018
Rajendra Choraria
00384493
315A, Central
Road, Near Oriental Cinema Hall, Silchar,
Cachar, Assam- 788001
DIRECTOR
08-01-1999
It is submitted by the Petitioners that:
A copy of the certificate of the Auditor certifying the list of Creditors and an affidavit by the Directors of the Company verifying the list of the Transferor Company have been annexed and marked as ANNEXURE "5".
8.1. A copy of the certificate of the Auditor certifying the list of Creditors and an affidavit by the Directors of the Company verifying the list of the Transferee Company has been annexed herewith and marked as ANNEXURE "6".
8.2. There are no investigations or proceedings pending against any of the petitioner companies. However, certain demands were raised by Income Tax Department and Central Excise Departments, which have been disputed by the Companies. We further declare that the said demands are not in the nature of investigation or proceedings. Further, as per the scheme, the said matters of disputes and litigations shall continue in the Transferee Company.
It is again stated that the exchange ratio of shares of the applicant companies have been fixed on fair and reasonable basis and on the basis of valuation report prepared by Dharmesh Kumar V., Registered Valuer bearing IBBI registration no. IBBI/RV/02/2019/11324. The share exchange ratio has been fixed as 760:1000 i.e. shareholders of the transferor company will be entitled to 760 shares in the transferee company against every one thousand shares held by them in the transferor company.
A copy of the valuation Report has been annexed and marked as ANNEXURE "9".
It is also submitted that the aggregate assets of the applicant companies are sufficient to meet all the liabilities and the said scheme shall not adversely affect the rights of any of the creditors of the Applicant Companies in any manner whatsoever and due provisions have been made for payment of liabilities as and when the same fall due in usual course.
It is submitted that, both the petitioners have obtained consents in the form of affidavits from all their respective shareholders approving the Scheme of Amalgamation and consented to dispensing with the holding of the Members meeting for approval of the Scheme.
The consents received in the form of affidavits from the shareholders of the Transferor Company verified by an Affidavit are annexed and marked as ANNEXURE "10".
It is further submitted that:
Both the Petitioners have obtained consents in the form of affidavits from their respective creditors approving the Scheme of Amalgamation and consented to dispensing with the holding of the Creditors' meeting for approval of the Scheme. It is declared by the Petitioners that the consent received is in compliance of requirements of Section 230 (9) of the Companies Act, 2013 i.e. more than 90% of the creditors due.
The consents received in the form of affidavits from the creditors supported with the calculation of requisite consents of the Transferor Company verified by an Affidavit are annexed and marked as ANNEXURE "12".
The consents received in the form of affidavits from the creditors supported with the calculation of requisite consent of the Transferee Company verified by an Affidavit have been annexed and marked as ANNEXURE "13".
12.1. The Affidavit identifying the shareholders of Transferor Company together with list of shareholders as per the latest annual return filed with the MCA portal for the financial year 2019-20 and certified by the Auditor of the Company is annexed and marked as ANNEXURE "14".
12.2. The Affidavit identifying the shareholders of Transferee Company together with list of shareholders as per the latest annual return filed with the MCA portal for the financial year 2019-20 and certified by the Auditor of the Company is annexed and marked as ANNEXURE "15".
12.3. An Affidavit relating to the disclosures under Section 230(2) of the Companies Act, 2013 of both the Petitioners have been annexed and marked as ANNEXURE "17".
12.4 .The Auditor's Certificate for compliance of Section 133 of the Companies Act, 2013 of the Transferor Company is annexed and marked as ANNEXURE "18" and that of the Transferee Company is annexed and marked as ANNEXURE "19".
The Auditor's Certificate, that the Transferor Company and the Transferee Company are not NBFC, is annexed and marked as ANNEXURE "20" and ANNEXURE "21" respectively.
It is submitted that the Affidavit verifying that the Transferor Company and the Transferee Company are not ineligible under Section 29A of the Insolvency and Bankruptcy Code, 2016 are annexed and marked as ANNEXURE "22" and ANNEXURE "23" respectively.
Heard the learned Counsel for the Applicant Companies and considering the consent affidavits filed on behalf of the Shareholders/Members of the Transferor Company and the Transferee Company as well as by the Creditors of the Applicant Companies, the meetings of the Members/ Equity Shareholders of both the Applicant Companies and the Creditors of both the Applicant Companies are hereby dispensed with as prayed for.
Therefore, in our view, the present Company Applications deserve to be allowed. Accordingly, it is allowed in terms of the prayers clause and subject to the compliances of the following directions:
i. The Applicant Companies to issue notices, in Form No. CAA.3 along with disclosures mentioned under Rule 6, as per the provisions of Section 23 (5) read with Rule 8 of the Companies Act, to
(1) The Central Government through the Regional Director, North Eastern Region, Guwahati.
(2) The Registrar of Companies, NER, Guwahati
(3) The Official Liquidator, NER, Guwahati
(4) Income Tax Authorities, having jurisdictions over the affairs of the Companies.
by informing that their representations, if any, to be made within a period of 30 days from the date of receipt of such notice, failing which it would be presumed that they have no objections to make on the proposed Company Scheme/ proposal. Such notices shall be sent forthwith by Speed post or by hand delivery at the offices of the above Authorities as required by sub-rule (2) of the Rule 8 of the Companies (CAA) Rules, 2016. The aforesaid authorities who desire to make any representation under sub-section (5) of Section 230, shall send the same to the Tribunal, with a copy to the Petitioner Companies, within a period of 30 (Thirty) days from the date of receipt of such notice, failing which it would be deemed that they have no representations to make on the proposed arrangement/proposals. Affidavit of Service of Speed Post is to be filed by the Petitioner Companies within 2 weeks from today.
With the aforesaid directions/observations, the present Company Application, CA (CAA)/14/GB/2021 being the first motion petition stands allowed and disposed of.