Master Piece Investment Private Limited And Ors vs Avenir Finvest And Leasing Limited And Ors

Ch. Mohd. Sharief Tariq, J

Under consideration is the Company Petition No. CAA-45/ND/2019 filed under Sections 230 to 232 of the Companies Act, 2013 r/w the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The present petition has been filed by the Petitioner Companies named above for the purpose of the approval of the Scheme of Arrangement, as contemplated between the Companies and its Shareholders by way of Amalgamation of Transferor Companies with the Transferee Company.

As per the Scheme of Amalgamation (in short, 'Scheme'), Transferor Companies " Master Piece Investment Private Limited" "Buxom Fincap Private Limited" "Avenir Finvest and Leasing Limited" is proposed to get merged with "Signature Global India Private Limited" (hereinafter referred to as 'Transferee Company'] as a going concern.

The companies involved in the 'scheme' under reference are falling within the jurisdiction of this bench. The other necessary requirements have also been fulfilled as per the Order dated 13.02.2019 passed by New Delhi Bench in CA (CAA) 121 (ND)/2018.

The Counsel appearing for the petitioner companies has described the rationale for the scheme as follows;

a. All the transferor and the Transferee Companies are closely held group companies. The proposed scheme would result in business synergy, consolidation and pooling off their resources.

b. The proposed scheme will result in formation of a larger company enabling further growth and development of the businesses of the said company. The scheme will enable the undertakings and business of the concerned companies to obtain greater facilities possessed and enjoyed by one large company to some small companies for raising capital, securing and conducting trade and business on favourable terms and other related benefits.

c. Transferor company number 3 is wholly owned subsidiary of the Transferee company, it holds 100% shares of the transferor company and its nominee shareholders.

d. The proposed scheme would enable sustainable long-term growth, profitability, cost reduction and efficiencies and continuous customer service through focused management attention as different set of skills and resources would be available to meet competitive, regulatory environment and customer service requirements.

e. The amalgamation enables to pool in their financial, managerial, technical and other resources and use the financial, managerial technical and marketing and distribution expertise of each other.

f. The scheme will have beneficial results for the said companies, Their shareholders, their Creditors, employees and all concerned.

The Regional Director (RD), Northern Region, MCA to whom notice was issued has filed the Report on 19.11.2019 and observed that under clause 10(c) of the scheme, the Transferor Company be directed to comply with the provision of Section 232 (3)(i) of the Companies Act, 2013 by paying fee on its revised authorised share capital. The RD has referred to the report of auditor which indicates that transferee company has been defaulting payments to various statutory authorities. Further note 38 of balance sheet of transferee company indicates that search and survey operations were carried out by the IT authorities under Section 133A of the IT Act, 1961 at the office premises of the company.

The report of the Official Liquidator (OL) had been filed on 25.10.2019 in which it is stated that on the basis of information submitted by the Petitioner Companies the affairs of the transferor company do not appear to have been conducted in a manner prejudicial to the interest of its members or to public interest as per the provisions of the companies Act, 1956 or the companies Act, 2013 whichever is applicable.

Paragraph 11(a) of the Scheme provides that amalgamation shall be an "amalgamation in the nature of merger" as defined in the Accounting Standard (AS) 14 as prescribed under the companies (Accounting Standards) Rules, 2006 and shall be accounted for under the "pooling of interests" method in accordance with AS-14.

In paragraph 11(b) of the Scheme, it is mentioned that all the assets and liabilities recorded in the books of the Transferor Companies shall be transferred to and vested in the Transferee company pursuant to the scheme and shall be recorded by the transferee company at the respective book values as reflected in the books of the transferor companies as on the appointed date.

Paragraph 7 (a) of the Scheme envisages that all the employees of the transferor companies in service on the date immediately preceding the date on which the scheme finally takes effect, shall become the employee of the transferee company on such date without any break or interruption in service and upon terms and conditions not less favourable than those subsisting in the concerned transferor company on the said date.

There is no additional requirement for any modification and the Scheme of Amalgamation appears to be fair and reasonable and is not contrary to public policy and not violative of any provisions of law. All the statutory compliances have been made under Sections 230 to 232 of the Companies Act, 2013.

Taking into consideration the above facts, the Company Petition is allowed and the Scheme of Amalgamation annexed with the Petitions is hereby sanctioned. The Scheme approved shall be binding on the Shareholders, Creditors and employees of the Companies involved in this Scheme. The Appointed date of the Scheme is 1st April, 2018.

While approving the Scheme as above, it is further clarified that this Order will not be construed as an order granting exemption from payment of stamp duty or taxes or any other charges, if payable, as per the relevant provisions of law or from any applicable permissions that may have to be obtained or, even the statutory compliances that may have to be made as per the mandate of law.

The Companies to the said Scheme or other person interested shall be at liberty to apply to this Bench for any direction that may be necessary with regard to the working of the said Scheme.

A certified copy of this Order shall be filed with the concerned Registrar of Companies within 30 days of the receipt of this Order.

The Transferor Company shall be dissolved without winding up from the date of the filing of the certified copy of this Order with the concerned Registrar of Companies.

Upon receiving the certified copy of this Order, the ROC concerned is directed to place all documents relating to the Transferor Companies with that of the Transferee Company and the files relating to the Transferor Companies shall be consolidated with the files and records of the Transferee Company.

The Order of sanction to this Scheme shall be prepared by the Registry as per the relevant format provided under the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 notified on 14th December, 2016.

Accordingly, the Scheme stands sanctioned and CAA-45/ND/2019 stands disposed of.

This Order of the Bench Consisting of above mentioned Members was pronounced in the open court on behalf of the Bench by one of the member under Rule 151.