J M Cotton Ginning And Pressing Companyprivate Limited Vs

Shyam Babu Gautam, Member (Technical)

The Court is convened by videoconference.

Heard the Learned Counsel for the Petitioner Companies. No objector has come before this Tribunal to oppose the Scheme and nor has any party controverted any averments made in the Petitions to the said Scheme.

The sanction of the Tribunal is sought under Sections 230 to 232 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013 and the rules framed there under for the Scheme of Amalgamation of J M COTTON GINNING AND PRESSING COMPANY PRIVATE LIMITED and KRISHI-DHAN CATTLE FEEDS PRIVATE LIMITED, the Transferor Companies with SETH BHIKAMCHAND JAIN OIL INDUSTRIES PRIVATE LIMITED, the Transferee Company.

The Petitioner Companies have approved the said Scheme of Amalgamation by passing the Board Resolutions dated 17th December, 2021 which are annexed to the respective Company Scheme Petitions.

The Learned Advocate appearing on behalf of the Petitioners states that the Petitions have been filed in consonance with the Order passed in the Company Scheme Application No. 27 of 2022 of the Hon’ble Tribunal.

The Learned Advocate appearing on behalf of the Petitioners further states that the Petitioner Companies have complied with all requirements as per directions of the National Company Law Tribunal, Mumbai Bench and they have filed necessary affidavits of compliance in the National Company Law Tribunal, Mumbai Bench.

The Learned Counsel for the Petitioner Companies states that the Petitioner Company No. 1 is presently engaged in the business of Ginning Pressing of Cotton Bales and that the Petitioner Company No. 2 is presently engaged in the business of renting agricultural land and that the Petitioner Company No.3 is presently engaged in the business of renting agricultural land.

The rationale for the Scheme of Amalgamation of the Petitioner Companies is in the interest of the stakeholders of these companies and shall result in the following benefits:

a. Reduction of shareholding layers, overheads, facilitates administrative convenience, enables cost savings and ensures optimum utilization of resources.

b. Simplification of corporate structure through absorption of the Transferor Companies by the Transferee Company.

c. It will provide the benefit of operational synergies to the combined entity, which can be put to the best advantage of the stakeholders.

d. Enables optimum utilization of funds and resources.

e. Improved organizational capability and leadership to compete successfully in an increasingly competitive industry. Greater efficiency in cash management and unfettered access to cash flow generated by the combined business which can be deployed more efficiently to fund organic and inorganic growth opportunities, to maximize shareholder value.

The Regional Director has filed his Report dated 15th July, 2022 inter-alia making the following observations in paragraphs 2 (a) to (g) which are reproduced hereunder:

Para

Observation     by     the     Regional Director

Undertaking    of    the    Petitioner Company/Rejoinder

2(a)

In  compliance  of  AS-14  (IND  AS-

103)  the  Petitioner  Companies  shall pass  such  accounting  entries  which are necessary in connection with the scheme    to    comply    with    other applicable    Accounting    Standards such as AS-5(IND AS-8) etc.

So    far    as    the    observation    in paragraph 2(a) of the Report of the Regional Director is concerned, the Petitioners   undertake   to   comply with AS-14 (IND AS-103) and such applicable accounting standards for Amalgamation   and   as   per   other applicable      provisions      of      the Companies Act, 2013 while passing necessary    entries    in    connection

with the Scheme.

2(b)

As per Definitions of the Scheme, “The   Appointed   Date"   means   1st April, 2021 or such other date as the Tribunal      or      other      competent authority may otherwise direct/fix

“The Effective Date" means the date on   which   certified   copies   of   the Order(s)  of  the Tribunal vesting the assets,  properties,  liabilities,  rights,

duties, obligations and the like of the

Transferor      Companies      in      the Transferee  Company  are  filed  with the      Registrar      of      Companies, Maharashtra,         Mumbai         after obtaining   the   necessary   consents, approvals,  permissions,  resolutions, agreements,  sanctions  and  orders  in this   regard.   In   this   regard,   it   is submitted that Section 232(6) of the Companies Act, 2013 states that the Scheme   under   this   section   shall clearly  indicate  an  appointed  date from which it shall be effective and the  scheme  shall  be  deemed  to  be effective from such date and not at a date   subsequent   to   the   appointed date.  However,  this  aspect  may  be decided   by   the   Hon’ble   Tribunal taking   into   account   its   inherent powers

"Further,   the   Petitioners   may   be asked      to      comply      with      the requirements    and    clarified    vide circular  no.  F.  No.  7/12/2019/CL-I dated   21.08.2019   issued   by   the Ministry of Corporate Affairs.”

So    far    as    the    observation    in paragraph 2(b) of the Report of the Regional Director is concerned, the Petitioners      confirm      that      the definition “Appointed Date” means 1st April, 2021. Further, Clause 4.5 of  the  Scheme  specifies  that  the appointed  date  shall  be  1st  April, 2021.     Further,     the     Petitioners confirm  that  the  “Effective  Date”

shall   be   the   date   on   which   the certified  or  authenticated  copies  of the  Order  sanctioning  this  scheme by  the  Mumbai  Bench  of  National Company   Law   Tribunal   is   filed with  the  Registrar  of  Companies, Maharashtra,     Mumbai     by     the Transferor    Companies    and    the Transferee   Company   as   required under     the     provisions     of     the Companies      Act,      2013.      The Transferee       Company       further undertakes   to   comply   with   the circular  no.  F.  No.7/12/2019/CL-1 dated   21.08.2019   issued   by   the Ministry  of  Corporate  Affairs.  The Petitioner   Companies   clarify   that the  amalgamation  as  embodied  in the  Scheme  shall  take  effect  from the  Appointed  Date  i.e.  1st  April, 2021.

2(c)

Petitioner

Company

have

to

So

far

as

the

observation

in

undertake   to   comply   with   section 232(3)(i)   of   the   Companies   Act, 2013, where the transferor company is dissolved, the fee and stamp duty paid  by  the  transferor  company  on its authorised capital shall be set-off against fees and stamp duty payable by  the  transferee  company  on  its authorised  capital  subsequent  to  the amalgamation        and        therefore, petitioners   to   undertake   that   the transferee   company   shall   pay   the difference of fees and stamp duty.

paragraph 2(c) of the Report of the Regional Director is concerned, the Petitioner  Companies  undertake  to comply   with   the   provisions   of Section 232(3)(i) of the Companies Act,  2013  with  respect  to  payment of differential fees and stamp duty, payable if any.

2(d)

The  Hon’ble  Tribunal  may  kindly seek    the    undertaking    that    this Scheme is approved by the requisite majority  of  members  and  creditors as  per  Section  230(6)  of  the  Act  in meetings   duly   held   in   terms   of Section 230(1) read with subsection (3) to (5) of Section 230 of the Act and  the  Minutes  thereof   are  duly placed before the Tribunal.

So    far    as    the    observation    in paragraph 2(d) of the Report of the Regional Director is concerned, the Petitioner  Companies  state  that  the meetings of members of J M Cotton Ginning   And   Pressing   Company Private       Limited,       (Transferor Company  No.  1)  and  Krishi-Dhan Cattle     Feeds     Private     Limited, (Transferor  Company  No.  2)  and the  meeting  of  creditors  of  J  M Cotton    Ginning    And    Pressing Company         Private         Limited, (Transferor     Company     No.     1); Krishi-Dhan   Cattle   Feeds   Private Limited,  (Transferor  Company No.

2)  and  Seth  Bhikamchand  Jain  Oil Industries         Private         Limited (Transferee       Company)       were dispensed   with   by   the   Hon’ble Tribunal  vide  its  Order  dated  11th March,     2022.     Therefore,     the requirement      of      holding      the meetings     and     furnishing     the minutes    for    the    above    is    not applicable.  The  Petitioners  further undertake    that    the    meeting    of shareholders  of  Seth  Bhikamchand Jain  Oil  Industries  Private  Limited (Transferee Company) was held on Tuesday, 26th April, 2022 at 11:00 a.m.    as    per    the    directions    of Hon’ble Tribunal and the resolution for   approval     of     scheme     of amalgamation was approved by the requisite  majority  of  shareholders as  per  the  requirements  of  Section 230 of the Companies Act, 2013. A certified  extract  of  Minutes  of  the meeting   of   shareholders   held   on Tuesday,   26th   April,   2022   been enclosed  herewith  and  marked  as

‘Annexure B’ to this affidavit.

2(e)

The  Petitioner  Company  states  that the Transferee  Company shall  be  in compliance     with     provisions     of Section  2(1B)  of  the  Income  Tax Act,   1961.   In   this   regards,   the petitioner    company    shall    ensure compliance  of  all  the  provisions  of Income     Tax     Act     and     Rules thereunder.

So    far    as    the    observation    in paragraph 2(e) of the Report of the Regional Director is concerned, the Petitioner    Companies    undertake that  Transferee  Company  shall  be in  compliance  with  provisions  of Section  2(1B)  of  the  Income  Tax Act,    1961    and    the    petitioner companies shall ensure compliance of all the provisions of Income Tax

Act and Rules thereunder.

2(f)

That on examination of the report of the Registrar of Companies, Mumbai dated     08.07.2022     (Annexed     as Annexure    –    A-1)    that    all    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    companies    have    filed Financial          Statements          upto 31.03.2021.  further  observations  in ROC report are as under:

i.   That   the   ROC   Mumbai   in   his report    dated    08.07.2022 has stated  that no Inquiry, inspection,     investigation     & prosecution  is  pending  against the subject applicant companies ii.   It   is   submitted   that   as   per   the provisions  of  Section  230(3)(i)  of the  Companies  Act,  2013,  where the      transferor      company is dissolved,  the  fee,  if  any,  paid  by the transferor   company   on   its authorized  capital  shall  be  set-off against  any  fees  payable  by  the Transferor      company      on      its authorized   capital   subsequent   to the      amalgamation.  Therefore, remaining fee, it any, after setting- off  the  fees  already  paid  by  the transferor  company on its authorized capital, must be paid by the   transferee   company   on   the increased capital subsequent to the amalgamation.

iii.  Interest  of  the  Creditors  should  be protected

So    far    as    the    observation    in paragraph 2(f) of the Report of the Regional  Director  with  respect  to observation      of      Registrar      of Companies,  Mumbai  is  concerned, the Petitioner Companies undertake to

(1)  comply  with  the  provisions  of Section     232(3)(i)     of     the Companies    Act,    2013    with respect      to      payment      of differential    fees    and    stamp duty, payable if any; and

(2)   protect the interest of creditors at all times

The observations made by the Regional Director have been explained by the Petitioner Companies in Para 9 above. The Representative of the RD has submitted that the explanations and clarifications given by the petitioner companies are found satisfactory and that they have no objection to the Scheme.

The Official Liquidator has filed his report on 14th October, 2022 in the Company Scheme Petition No. 108 of 2022, inter alia, stating therein that the affairs of the Transferor Company have been conducted in a proper manner not prejudicial to the interest of the Shareholders of the Transferor Companies and that the Transferor Company may be ordered to be dissolved by this Tribunal.

From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy.

Since all the requisite statutory compliances have been fulfilled, Company Scheme Petition No. 108 of 2022 is made absolute in terms of clauses (a) to (c) of the said Company Scheme Petition

The First and Second Petitioner Company be dissolved without winding up.

Petitioners are directed to file a copy of this Order along with a copy of the Scheme of Amalgamation with the concerned Registrar of Companies, electronically along with E-Form INC-28, in addition to physical copy within 30 days from the date of receipt of the Order from the Registry.

The Petitioner Companies to lodge a copy of this Order and the Scheme duly authenticated by the Deputy Registrar or Assistant Registrar, National Company Law Tribunal, Mumbai Bench, with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty payable within 60 days from the date of receipt of the Order, if any.

All authorities concerned to act on a copy of this Order along with Scheme duly authenticated by the Deputy Director or Assistant Registrar, National Company Law Tribunal, Mumbai.

The Appointed Date is 1st April, 2021.

Ordered Accordingly. Pronounced in open court today.