Owens Corning Industries (India) Private Limited Vs

Kuldip Kumar Kareer, Member (Judicial)

This Bench convened through video conferencing.

Heard the Authorised Representative appearing for the Petitioner Companies. No objector has come before this Tribunal to oppose the Scheme nor has any party controverted any averments made in the Petition.

The sanction of this Tribunal is sought under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, to the Scheme of Merger by Absorption for the merger of Owens Corning Industries (India) Private Limited (“First Petitioner Company” or “First Transferor Company”) and Owens Corning Enterprise (India) Private Limited (“Second Petitioner Company” or “Second Transferor Company”) with InterWrap Corp Private Limited (“Third Petitioner Company” or “Transferee Company”) and their respective shareholders (‘Scheme’).

The Authorised Representative for the Petitioner Companies submits that the First Petitioner Company was engaged in the business of manufacture and trading of Composite Solution Business (CSB) and related products thereof. Presently, the First Petitioner Company is not engaged in any active business and the Second Petitioner Company was engaged in the business of selling of Fibre Glass Reinforcement Fabrics and was engaged in the business of shared services in the Finance & Accounting Function to various group companies. Presently, the Second Petitioner Company is not engaged in any active business and the Third Petitioner Company was engaged in the business of trading in packaging material, industrial fabrics, woven coated and printed fabrics and providing business auxiliary (back-office processing) services to its group companies. Presently, the Third Petitioner Company is not engaged in any active business.

The Authorised Representative for the Petitioner Companies submits that the rationale for the Scheme is as under:

• The Scheme will achieve rationalization of costs by simplification of management structure leading to better administration and cost savings;

• The Scheme will result in significant reduction in the multiplicity of legal and regulatory compliances required at present to be carried out by the Companies; and

• The Scheme will be beneficial, advantageous and not prejudicial to the interests of the shareholders, creditors and other stakeholders of the Transferor Companies and Transferee Company;

The Appointed Date means 1st April, 2022 or such other date as may be fixed or approved by the National Company Law Tribunal, Mumbai Bench.

The Authorised Representative for the Petitioner Companies submits that consideration of the Scheme is as follows:

For the equity shareholders of the First Petitioner Company / First Transferor Company

“1,472 Equity Shares having face value of INR 10/- each of Transferee Company to be issued to the shareholders of the First Transferor Company for every 100 Equity Share having face value INR 10/- each in the First Transferor Company”.

For the equity shareholders of the Second Petitioner Company / Second Transferor Company

“33 Equity Shares having face value of INR 10/- each of Transferee Company to be issued to the shareholders of the Second Transferor Company for every 100 Equity Share having face value INR 10/-each in the Second Transferor Company”.

The Authorised Representative for the Petitioner Companies states that the Board of Directors of the First Petitioner Company and the Second Petitioner Company in their respective meetings held on 16th May, 2022 and the Board of Directors of the Third Petitioner Company vide their meeting held on 31st May, 2022 have approved the Scheme by passing the Board Resolutions which are annexed to the Company Scheme Petition.

The Hon’ble Tribunal in C.A.(C.A.A.)/158/MB/2022 vide its order dated 11th November, 2022 has directed the following with respect to meeting of equity shareholders, secured creditors and unsecured creditors of the Petitioner Companies:

Sr.

No.

Name of the Company

Meeting of Equity Shareholders

Meeting of the Secured Creditors

Meeting of the Unsecured Creditors

1

Owens Corning Industries (India)    Private Limited  /  First Petitioner Company

Dispensed  with  in view of the consent affidavits of all the Equity Shareholders

No      Secured Creditors     as on   31st     May, 2022.

Dispensed  as  there was no compromise or arrangement with the          Unsecured Creditors.   Further, directions         were given      to      serve notices   to   all   the Unsecured Creditors           and procure  Consent  or No Dues Certificate. The  First  Petitioner Company           has procured    the    No Dues       Certificate

from        all        the Unsecured Creditors as on 31st May,  2022.  Copies of    the    same    are attached              as Annexure G1 & G2 to    the    Company

Scheme Petition.

2

Owens Corning Enterprise (India)    Private Limited           / Second Petitioner

Company

Dispensed  with  in view of the consent affidavits of all the Equity Shareholders

No      Secured Creditors     as on   31st     May, 2022.

No          Unsecured Creditors as on 31st May, 2022.

3

Interwrap  Corp Private  Limited

/              Third

Petitioner Company

Dispensed  with  in view of the consent affidavits of all the Equity Shareholders

No      Secured Creditors     as on   31st     May, 2022.

Dispensed  as  there was no compromise or arrangement with the          Unsecured Creditors.   Further, directions         were given      to      serve notices  to  sole  the Unsecured  Creditor and             procure Consent or No Dues Certificate.         The Third        Petitioner Company           has procured    the    No Dues       Certificate from sole Unsecured Creditor  as  on  31st May, 2022. Copy of the same is attached as  Annexure  H  to the            Company Scheme Petition.

The Authorised Representative for the Petitioner Companies states that the Company Scheme Petition has been filed in consonance with the order dated 11th November, 2022 passed by the National Company Law Tribunal, Mumbai Bench in the Company Scheme Application bearing C.A.(C.A.A.)/158/MB/2022.

The Authorised Representative for the Petitioner Companies states that the Petitioner Companies have complied with all requirements as per directions of this Hon'ble Tribunal and they have filed necessary affidavits of compliance with this Hon'ble Tribunal. Moreover, Petitioner Companies undertake to comply with all statutory requirements, if any, as required under the Companies Act, 2013 and the Rules & Regulations made there under. The said undertaking is accepted.

The Central Government through the Regional Director, Western Region, Mumbai has filed his Report dated 13th March 2023 with certain observations to the Scheme in paragraph 2 (a) to (g) therein. The observations made by the Central Government through the Regional Director, Western Region, Mumbai have been dealt with by the Petitioner Companies in their Affidavit in Reply dated 14th March 2023. The observations made by the RD and the response from the Petitioner Companies, are mentioned hereunder: -

Para

No. 2

Observations of the Regional

Director, Western Region

Response from the Petitioner

Companies

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.

As    far    as    observation    made    in paragraph   2   (a)   of   the   Report   of Regional  Director   is   concerned,   the Transferee Company undertakes that in addition to compliance of AS-14, the

Transferee Company shall pass such accounting      entries      which      are necessary   in   connection   with   the scheme     to     comply     with     other applicable Accounting Standards such

as AS-5, etc.

b)

As per Definition of the Scheme,

“Appointed   Date”  means   1   April, 2022  or  such  other  date  as  may  be

fixed   or   approved   by   the   National Company    Law    Tribunal,    Mumbai Bench; And

“Effective Date” means the last of the

dates on  which  the certified copies of the  orders  sanctioning  this  Scheme, passed by the National Company Law Tribunal at Mumbai, are filed with the Registrar of Companies, Mumbai by the Transferor     Companies     and     the Transferee  Company.  Any  references in this Scheme to the date of  “coming into effect of this Scheme” or “upon the Scheme becoming effective” shall mean the Effective Date.

In this regard, it is submitted that 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.

The   Petitioners   may   be   asked   to comply   with   the   requirements   as clarified   vide   circular   no.   F.   No. 7/12/2019/CL-I   dated   21.08.2019

issued  by  the  Ministry  of  Corporate

Affairs.

As    far    as    observation    made    in paragraph   2   (b)   of   the   Report   of Regional  Director   is   concerned,   the Petitioner Companies submits that as per  Clause  1.3  of  the  Scheme,  the Appointed Date  means the 1st  day of April, 2022 or such other date as may be   fixed   or   approved   by   National Company    Law    Tribunal,    Mumbai Bench.

Further,   as   per   Clause   1.5   of   the Scheme, the Effective Date means the last of the dates on which the certified copies  of  the  orders  sanctioning  this Scheme,   passed   by   the   National Company  Law  Tribunal  at  Mumbai, are    filed    with    the    Registrar    of Companies, Mumbai by the Transferor Companies     and     the     Transferee Company.   Any   references   in   this Scheme  to  the  date  of  “coming  into effect  of  this  Scheme”  or  “upon  the Scheme    becoming    effective”    shall mean the Effective Date.

The    same    therefore,    meets    the requirements clarified vide circular no.

F.      No.      7/12/2019/CL-I     dated

21.08.2019 issued by the Ministry of Corporate Affairs.

c)

Petitioner Company have to undertake to   comply   with   section   232(3)(i)   of 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.

As   far   as   the   observation   of   the Regional    Director,    as    stated    in paragraph   2(c)    is   concerned,   the Transferee Company, hereby submits that   on   Scheme   of   Amalgamation becoming   Effective   on   the   Effective date, where the Transferor Companies are dissolved, the ROC fees or stamp duty,  if  any,  paid  by  the  Transferor Companies  on  its  authorised  share capital shall be deemed to have been so paid by the Transferee Company on the     combined     authorised     share capital, and the Transferee Company shall pay differential ROC fees/stamp duty for the increase of the authorised share capital, after setting-off fees and stamp   duty   already   paid   by   the Transferor Companies. The aggregate authorised    share    capital    of    the Transferee          Company          shall automatically stand increased to that effect  by  simply  filing  the  requisite forms  with  the  relevant  Registrar  of Companies  without  any  further  act, instrument  or  deed  on  the  part  of Transferee  Company.  The  Transferee Company  undertakes  to  comply  with the provisions of Section 232(3)(i) of the Companies  Act,  2013  for  payment of differential ROC fees and Stamp Duty, if  any  on  the  increased  authorized share capital.

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 7 subsection (3) to (5) of Section 230 of the  Act  and  the  Minutes  thereof  are duly placed before the Tribunal.

As    far    as    observation    made    in paragraph   2   (d)   of   the   Report   of Regional  Director   is   concerned,   the Petitioner Companies submits that as per  the  directions  contained  in  the Order   dated   11th     November,   2022 passed by the Tribunal in C.A. (CAA) 158/MB/2022,     dispensation     was granted from convening the meeting of Equity Shareholders and Creditors of the  Petitioner  Companies.  Hence,  no statement under Section 230(3) of the Companies Act, 2013 has been sent to Equity   Shareholders   and   Creditors. There were no Secured Creditors in the Petitioner   Company.   Further   there were  no  Unsecured  Creditors  in  the Second   Petitioner   Company.   NCLT, had    directed    the    First    Petitioner Company   and   the   Third   Petitioner Company  to  send  notices  to  all  its Unsecured    Creditors    and    procure consent  letters  or  no  dues  certificate from all their Unsecured Creditors as on 31st  May, 2022. The First Petitioner Company   and   the   Third   Petitioner Company   have   procured   no   dues certificates  from  all  their  Unsecured Creditors   which   is   annexed   to   the Petition  as  Annexure G1  & G2 and Annexure H, respectively.

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.

As   far   as   the   observation   of   the Regional    Director,    as    stated    in paragraph    2(e)   of    the    Report   is concerned,  the  Petitioner  Companies, undertake     to     comply     with     the provisions of  the Income Tax Act and rules       &       regulations       framed

thereunder.

f)

It is observed from latest MGT-7 for the year  ending  31.03.2022  filed  by  the petitioner   companies   that   petitioner companies  have  following  corporate body  shareholders  having  more  than 10% shareholding, but form Ben-2 has not been filed:

Name of the Company

Name of the Shareholder

Percent age of  Shareholding

Status of Ben2

OWENS CORNING INDUSTRI ES (INDIA) PRIVATE LIMITED (Transferor Company No.1)

OCV Chambers/ International

100%

Not filed

OWENS CORNING ENTERPRI SE (INDIA) PRIVATE LIMITED (Transferor Company No.2)

OC NL Invest Cooperat ief U.A.

100%

Not filed

INTERWR AP CORP PRIVATE LIMITED (Transferee Company)

Owens Corning Canada Holdings ULC (formerly known as Interwra p Inc.)

100%

Not filed

Therefore, petitioner company may be directed to clarify and comply with the same as required u/s. 90 of the Companies Act, 2013 r.us. companies (Significant Beneficial Owners) Rules, 2018

As   far   as   the   observation   of   the Regional    Director,    as    stated    in paragraph    2(f)    of    the    Report    is concerned with respect to non-filing of Form   No.   BEN-2   with   ROC,   the Petitioner  Companies  hereby  submit that,      none      of      the      individual shareholders of the holding companies of  petitioner  companies  are  holding majority stake (i.e. more than 50%) in holding   companies.   Hence   filing   of Form  No.  BEN-2  is  not  applicable  in case  of  the  Petitioner  Companies.  To the best of the knowledge and belief, the requirement of filing eForm BEN-2 is   not   applicable   to   the   corporate shareholders,  as  stated  hereinabove. Without  prejudice  to  the  above,  the Petitioner         Companies         hereby undertake to comply with provisions of Section 90 of the Companies Act, 2013 read  with  the  Companies  (Significant Beneficial    Owners)    Rules,    2018, amended from time to time and make

necessary   filings   with   Registrar   of Companies,  if  applicable,  or  comply with directions, if any issued by the concerned Registrar of Companies in this regard.

g)

That on examination of the report of the Registrar of Companies, Mumbai dated     12.01.2023     (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 up to 31.03.2022  further  observations  in ROC report are as under:-

i.  That   the   ROC   Mumbai   in   his report    dated    07.12.2022    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  232(3)(1)  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 Transferee company on its authorized capital subsequent to the amalgamation. Therefore, remaining fee, if any after settingoff the fees already paid by the transferee company on the increased authorized capital subsequent to the amalgamation. iii. Interest of the Creditor should be protected. iv. May be decided on its merit.

As   far   as   observation   made   in paragraph   2   (g)   of   the   Report   of Regional  Director  is  concerned,  the Petitioner Companies, hereby submit the following:

i.  As  far  as  the  observation  of  the Regional  Director,  as  stated  in paragraph 2(g)(i) of the Report is concerned,  the  contents  thereof are  correct  factual  observations and  thus,  does  not  require  any response.

ii. As  far  as  the  observation  of  the Regional  Director,  as  stated  in paragraph  2(g)(ii)  is  concerned, the Transferee Company, hereby submits   that   on   Scheme   of Amalgamation              becoming Effective  on  the  Effective  date, where the Transferor Companies are  dissolved,  the  ROC  fees  or stamp  duty,  if  any,  paid  by  the Transferor Companies on its authorised share capital shall be deemed to have been so paid by the Transferee Company on the

combined authorised share capital, and the Transferee Company shall pay differential

ROC fees/stamp duty for the increase of the authorised share capital, after setting-off fees and stamp duty already paid by the

Transferor Companies. The aggregate authorised share capital of the Transferee

Company shall automatically stand increased to that effect by simply filing the requisite forms with the relevant Registrar of Companies without any further act, instrument or deed on the part of Transferee Company. The Transferee Company undertakes to comply with the provisions of

Section 232(3)(i) of the Companies Act, 2013 for payment of differential ROC fees

and Stamp Duty, if any on the increased authorised share capital.

iii.As far as the observation of the Regional Director, as stated in paragraph 2(g)(iii) is concerned, the Transferee Company, hereby

undertakes to protect the Interest of the Creditors, if any.

iv. As far as the observation of the Regional Director, as stated in paragraph 2(g)(iv) is concerned, the Hon’ble Tribunal can decide

the Scheme on its merits.

The observations made by the Regional Director, Western Region are enlisted herein in Para 12 above along with response of the Petitioner Companies on the observation of the Regional Director, Western Region. The clarifications and undertakings given by the Petitioner Companies in Para 12 above are accepted by this Tribunal.

Ms. Rupa Sutar, Authorised representative of the Regional Director, MCA (WR), Mumbai, who was present at the time of Final hearing has submitted that the clarifications, submissions and undertakings given by the Petitioner Companies are hereby accepted and that they have no objection for approving the scheme by the Tribunal.

The Official Liquidator, High Court, Bombay has filed its report dated 28th March 2023, inter alia, stating therein that the affairs of the First Petitioner Company and the Second Petitioner Company have been conducted in proper manner.

From the material on record, the Scheme appears to be fair, reasonable and is not in violation of any provisions of law nor is contrary to public interest. None of the stakeholders concerned have come forward to oppose the Scheme. With effect from Appointed Date, all the assets and properties of the Transferor Companies, of whatsoever nature and wheresoever situated, shall, under the provisions of Sections 230 to 232 and all other applicable provisions, if any, of the Companies Act, 2013 without any further act or deed, be and stand transferred to and vested in the Transferee Company or be deemed to be transferred to and vested in the Transferee Company as a going concern so as to become the assets and properties of the Transferee Company.

Further, with effect from the Appointed Date, all the liabilities of the Transferor Companies, including all secured and unsecured debts, sundry creditors, liabilities (including contingent liabilities), duties and obligations and undertakings related to the Transferor Companies shall, pursuant to the sanction of this Scheme by the Tribunal under and in accordance with the provisions of Sections 230 to 232 and other applicable provisions, if any, of the Companies Act, 2013 without any further act, instrument, deed, matter or thing, be transferred to and vested in or be deemed to have been transferred to and vested in the Transferee Company, along with any charge, encumbrance, lien or security thereon, and the same shall be assumed by the Transferee Company in accordance with the Scheme.

Since all the requisite statutory compliances have been fulfilled, C.P. (CAA)/16/MB/2023 is made absolute in terms of the prayer clauses of the Company Scheme Petition.

The First Petitioner Company and the Second Petitioner Company are ordered to be dissolved without winding up.

The Scheme annexed to the Company Scheme Petition No. C.P.(CAA)/16/MB/2023 is hereby sanctioned. It shall be binding on the Petitioner Companies involved in the Scheme and all concerned including their respective shareholders, employees and/or any other stakeholders concerned.

The Petitioner Companies is directed to lodge a certified copy of this order along with a copy of the Scheme with the concerned Registrar of Companies, Mumbai electronically in e-form lNC-28 within 30 days or an extended timeline with payment of additional fees, as may be applicable from the date of receipt of order duly certified by the Designated Registrar of this Tribunal.

The Petitioner Companies shall lodge a copy of this order duly certified by the Deputy Registrar or Assistant Registrar of this Tribunal along with Scheme, with the concerned Superintendent of Stamps for the purpose of adjudication of stamp duty payable, if any, within a period of 60 working days from the date of the receipt of the certified copy of the order from the Registry of this Tribunal.

All the concerned regulatory authorities to act on a copy of this order along with the sanctioned Scheme, duly certified by Deputy/Assistant Registrar of this Tribunal.

Any concerned Authorities are at liberty to approach this Tribunal for any further clarification as may be necessary.

Ordered accordingly. Thus, the Company Scheme Petition with C.P. (CAA)/16/MB/2023 in C.A.(CAA)/158/MB/2022 shall stand to be disposed of.