Polyplast Agencies India Private Limited Vs

Shyam Babu Gautam, Member (Technical)

The hearing is conducted through Virtual Mode.

Heard Learned Counsel for Petitioner Companies. No objector has come before the Tribunal to oppose the petition and 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 ("Act") and in the matter of Scheme of Amalgamation of Polyplast Agencies (India) Private Limited ('First Transferor Company') and Poly-Resin Agencies (India) Limited ('Second Transferor Company') and Resin Distributors Limited ('Third Transferor Company') and Silvassa Polyplast (India) Private Limited ('Fourth Transferor Company') with Tufropes Private Limited ('Transferee Company') and their respective shareholders (the Scheme).

The Learned Counsel for the Petitioner Companies submits that First Petitioner Company is engaged in the business of Agency commission business along with Investment and Rent income. The Second Petitioner Company is engaged in the business of Depot Management Service along with Investment income. The Third Petitioner Company is engaged in the business of Agency commission business along with Rent Income. The Fourth Petitioner Company is engaged in the business of manufacturing of reprocessed plastic products and other allied products along with Investment Income. The Fifth Petitioner Company is engaged in the business of manufacturing and sale of ropes, nets, twines, rope articles, fabrics.

The Learned Counsel for the Petitioner Companies submits that that the proposed amalgamation will be beneficial to the Petitioner Companies, their respective shareholders and creditors, employees and other stakeholders and they will have following benefits:

- Consolidation of companies within the Group;

- Reduction of intra - group transactions and compliance requirements under various laws;

- Reduction of operating and compliance costs; and

- Achieve administrative, operational and management efficiencies.

The Counsel for the Petitioner Companies further submits that the Board of Directors in their respective meeting held on 24 June 2020 has approved the Scheme and have approached the Tribunal for sanction of the Scheme

Learned Counsel for the Petitioner Companies submits that the Petition has been filed in consonance with the order dated 29 July 2020 passed by this Tribunal in CA (CAA) 1034/MB-II/2020.

The Regional Director has filed its report dated 12 November 2020 ("the Report") stating that, save and except the observations as stated in paragraph IV (a) to (h) of the report, this Tribunal may pass such order or orders as deemed fit and proper in the facts and circumstance of the case. The observation stated in para IV of the Report of the Regional Director are as under:

a. In addition to compliance of AS-14 (IND AS-103) 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 (IND AS-8) etc.

b. As per Part-A-Definitions Clause 1 (1.2 & 1.4) of the Scheme.

"Appointed Date" means April 1, 2020 or such other date as may be approved by the National Company Law Tribunal at Mumbai Bench or any other competent authority for the purposes of amalgamation of Poly-Resin Agencies and Resin Distributors and Polyplast Agencies and Silvassa Polyplast with Tufropes;

"Effective Date" or "coming into effect of this Scheme" or "upon the scheme becoming effective" or "effectiveness of the scheme" means the date on which the certified copies of the orders of National Company Law Tribunal having Judicature at Mumbai sanctioning this Scheme, is filed by Poly-Resin Agencies, Resin Distributors, Polyplast Agencies, Silvassa Polyplast and Tufropes with the Registrar of Companies at Mumbai, Maharashtra;

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-1 dated 21.08.2019 issued by the Ministry of Corporate Affairs.

c. 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.

d. Hon'ble NCLT may kindly direct the petitioners to file an affidavit to the extent that the Scheme enclosed to Company Application &

Company Petition, are one and same and there are no discrepancy/any change/changes are made, for changes if any, liberty be given to Central Government to file further report if any required.

e. The Petitioners under provisions of section 230(5) of the Companies Act, 2013 have to serve notices to concerned authorities which are likely to be affected by Amalgamation. Further, the approval of the scheme by this Hon'ble Tribunal may not deter such authorities to deal with any of the issues arising after giving effect to the scheme. The decision of such Authorities is binding on the Petitioner Company(s).

f. Petitioner Company have to undertake to comply with section 232(3)(i) of Companies Act, 2013, where the transferor company is dissolved, the fee, if any, paid by the transferor company on its authorised capital shall be set-off against any fees payable by the transferee company on its authorised capital subsequent to the amalgamation and therefore, petitioners to affirm that they comply the provisions of the section.

g. As regards Part-B Clause 12 (12.1to 12.6) of the Scheme (Combination of Authorized Share Capital); Upon the sanction of the Scheme, the authorized share capital of Transferee Company Shall automatically stand increased. In this regard it is submitted that Hon'ble Tribunal may kindly direct the petitioner to comply with provisions of Section 13, Section 14 & Section 61 of the Companies Act, 2013 or any other applicable provision of the Act.

h. In view of the observation raised by the ROC Mumbai, mentioned at para 18 above Hon'ble NCLT way pass appropriate orders/ orders as deem fit.

Status of ROC Report

ROC Mumbai vide report/letter No. ROC/STA(S)/69639/230-232/1925 dated 21-09-2020 has mentioned that No investigation, inspection, inquiry proceedings. No Complaint, Prosecution.

Observation of the ROC, Mumbai is as under: -

1st, 2nd, 3rd & 4th Transferor Companies are wholly owned subsidiaries Companies of the Transferee Company.

Interest of the Creditors should be protected May be decided on its merits."

In response to the above observations of the Regional Director, the Petitioner Companies have filed an Affidavit in rejoinder dated 4 December 2020 and have clarified as follows:

a. In so far as observations made in paragraph IV (a) of the Report of Regional Director is concerned, the First Petitioner Company, Second Petitioner Company, Third Petitioner Company, Fourth Petitioner Company and Fifth Petitioner Company through its Counsel undertake that they will comply with AS14 (Ind AS 103) and 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.

b. In so far as observations made in paragraph IV (b) of the Report of Regional Director is concerned, the First Petitioner Company, Second Petitioner Company, Third Petitioner Company, Fourth Petitioner Company and Fifth Petitioner Company state that Part -A Definitions Clause 1 (1.2 & 1.4) of the Scheme "Appointed Date" means "Appointed Date" means April 1, 2020 or such other date as may be approved by the National Company Law Tribunal at Mumbai Bench or any other competent authority for the purposes of amalgamation of Polyplast Agencies (India) Private Limited and Poly-Resin Agencies (India) Limited and Resin Distributors Limited and Silvassa Polyplast (India) Private Limited with Tufropes Private Limited. "Effective Date" or "coming into effect of this Scheme" or "upon the scheme becoming effective" or "effectiveness of the scheme" means the date on which the certified copies of the orders of National Company Law Tribunal having Judicature at Mumbai sanctioning this Scheme, is filed by Polyplast Agencies (India) Private Limited and Poly-Resin Agencies (India) Limited and Resin Distributors Limited and Silvassa Polyplast (India) Private Limited with Tufropes Private Limited with the Registrar of Companies at Mumbai, Maharashtra. Further, the First Petitioner Company, Second Petitioner Company, Third Petitioner Company, Fourth Petitioner Company and Fifth Petitioner Company undertakes to comply with requirements vide circular no. F. No. 7/12/2019/CL-1 dated 21-08-2019 issued by the Ministry of Corporate Affairs to the extent applicable.

c. In so far as observations made in paragraph IV (c) of the Report of Regional Director is concerned, the First Petitioner Company, Second Petitioner Company, Third Petitioner Company, Fourth Petitioner Company and Fifth Petitioner Company through its Counsel states that in pursuance of an Order dated July 29, 2020 passed by this Tribunal in CA (CAA) 1034/MB.II/2020, the requirement to convene meeting of the Equity Shareholders of the First Petitioner Company, Second Petitioner Company, Third

Petitioner Company and Fourth Petitioner Company was dispensed with in view of consent affidavit provided by all the equity shareholders of the First Petitioner Company, Second Petitioner Company, Third Petitioner Company and Fourth Petitioner Company and accordingly the requirement of taking approval of shareholders by a meeting is not applicable. Further, there are no Secured Creditors in First Petitioner Company, Second Petitioner Company, Third Petitioner Company and Fourth Petitioner Company. Further, as per the order issued by this Tribunal in CA (CAA) 1034/MB-II/2020, notices have been served to Unsecured Creditors of First Petitioner Company, Second Petitioner Company, Third Petitioner Company and Fourth Petitioner Company. Further, as per the order issued by this Tribunal in CA (CAA) 1034/MB.II/2020, the requirement to convene meeting of the Equity Shareholders and issue of notice to Secured and Unsecured Creditors of the Fifth Petitioner Company was dispensed with in view of the fact that First Petitioner Company, Second Petitioner Company, Third Petitioner Company and Fourth Petitioner Company are wholly owned subsidiaries of Fifth Petitioner Company. The Tribunal may kindly take the same on record.

d. In so far as the observation in paragraph IV (d) of the Report of the Regional Director is concerned, the Learned Counsel for the First Petitioner Company, Second Petitioner Company, Third Petitioner Company, Fourth Petitioner Company and Fifth Petitioner Company confirms that the scheme enclosed to the Company Scheme Application and Company Scheme Petition are one and same.

e. In so far as the observation in paragraph IV (e) of the Report of the Regional Director is concerned, the First Petitioner Company, Second Petitioner Company, Third Petitioner Company, Fourth Petitioner Company and Fifth Petitioner Company submit that the notices have been served to the concerned authorities as per the provisions of section 230(5) of the Companies Act, 2013. The First Petitioner Company, Second Petitioner Company, Third Petitioner Company, Fourth Petitioner Company and Fifth Petitioner Company have filed a Compliance Report on August 24, 2020 with this Tribunal regarding service of these notices.

f. In so far as the observation made in paragraph IV (f) of the Report of Regional Director is concerned, the First Petitioner Company, Second Petitioner Company, Third Petitioner Company, Fourth Petitioner Company and Fifth Petitioner Company states that it would comply with the provisions set out in Section 232(3)(i) of the Companies Act, 2013 and that the fee, if any, paid by the First Petitioner Company, Second Petitioner Company, Third Petitioner Company and Fourth Petitioner Company on its authorized share capital shall be set off against any fees payable by the Fifth Petitioner Company on its authorized share capital subsequent to the amalgamation, if applicable.

g. In so far as the observation made in paragraph IV (g) of the Report of Regional Director is concerned, the First Petitioner Company, Second Petitioner Company, Third Petitioner Company, Fourth Petitioner Company and Fifth Petitioner Company states that the combination of authorised capital will be in compliance with the provisions of section 13 and section 61 of the Companies Act, 2013 and other applicable provisions of the Act.

h. In so far as the observation made in paragraph IV (h) of the Report of Regional Director is concerned, the First Petitioner Company, Second Petitioner Company, Third Petitioner Company, Fourth Petitioner Company and Fifth Petitioner Company states that there is no impact on the creditors of the respective companies as post the Scheme is effective, the creditors of the respective companies shall become creditors of the Transferee Company and with respect to the creditor of the Transferee Company there will be no reduction in their claims and the assets of the Transferee Company, post amalgamation, will be more than sufficient to discharge their claims. Also, the net worth of the Transferee Company is and will continue to remain highly positive post- merger. Accordingly, the Tribunal may take on record that there is no impact to the Creditors and their interest are protected.

The observations made by the Regional Director have been explained by the Petitioner Companies in Para 9 above. The clarifications and undertakings given by the Petitioner Companies are accepted.

The Regional Director has filed his Supplementary Report dated 18 March 2021, stating therein that the Petitioner Companies in their Affidavit-in-Rejoinder have submitted its replies on all issues in regard to the observations made by the Regional Director in his report.

The Official Liquidator, High Court, Bombay, has filed his report dated 21 September 2020, inter alia, stating therein that the affairs of First Transferor Company, Second Transferor Company, Third Transferor Company and Fourth Transferor Company have been conducted in a proper manner, not prejudicial to the interest of the shareholders of First Transferor Company, Second Transferor Company, Third Transferor Company and Fourth Transferor Company and that First Transferor Company, Second Transferor Company, Third Transferor Company and Fourth Transferor Company may be ordered to be dissolved without winding up by this Tribunal.

Since all the requisite statutory compliances have been fulfilled, CP (CAA) 1022/MB-II/2020 is made absolute in terms of the prayer clauses of the said Company Scheme Petition.

The Scheme is hereby sanctioned with the Appointed Date of 1 April 2020.

The Petitioner Companies are directed to file a copy of this Order along with a copy of the Scheme with the concerned Registrar of Companies, electronically along with e-form INC-28 within 30 days from the date of receipt of the certified copy of order by the Petitioner Companies.

The First Transferor Company, Second Transferor Company, Third Transferor Company and Fourth Transferor Company stand dissolved without the process of winding up.

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

All concerned regulatory authorities to act upon a copy of this order along with Scheme duly certified by the Deputy Director or the Assistant Registrar, National Company Law Tribunal, Mumbai Bench.

Any person interested is at liberty to apply to this Tribunal in the above matters for any directions that may be necessary.

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

Ordered accordingly.