RASA Autocam Limited vs Registrar of Companies

,,,,,,

Subrata Kumar Dash, Member (Technical)",,,,,,

This is a joint First Motion Application filed by Applicant Companies namely; RASA Autocam Limited (Applicant No.1/Transferor Company,,,,,,

No.1), Rico Aluminium And Ferrous Auto Components Limited (Applicant No.2/Transferor Company No.2), Rico Investments Limited",,,,,,

(Applicant No.3/Transferor Company No.3) and Rico Auto Industries Limited (Applicant No.4/Transferee Company) under Section 230-232 of,,,,,,

Companies Act, 2013 (the Act) and other applicable provisions of the Act read with Rule 3 and 18 of the Companies (Compromises, Arrangements",,,,,,

and Amalgamations) Rules, 2016 (the Rules) in relation to the Scheme of Amalgamation between the Applicant Companies. The said Scheme is also",,,,,,

attached as Annexure-A of the Application.,,,,,,

It is submitted that the Applicant Companies have prayed for dispensing with the requirement of convening meetings of the Equity Shareholders and,,,,,,

Secured Creditors of the Applicant No.1, No.2 & No.3 and Unsecured Creditors of Applicant No.3. It is further prayed for calling and convening the",,,,,,

meetings of the Equity Shareholders and Secured creditors of the Applicant No.4 and Unsecured Creditors of Applicant No.1, No.2 and No.4.",,,,,,

The Applicant No.1 to 4 are presently engaged in the business of manufacturing, assembling, buying, selling, exporting, importing and dealing in",,,,,,

wholesale and in retail in Automobile Parts, Two-Wheeler Parts, Passenger Car Parts, Tractor Parts, Auto Electronic and Electrical Parts and",,,,,,

Engineering items and assemblies etc.,,,,,,

It is submitted that the registered offices of the Applicant Companies are situated in the State of Haryana and, therefore, the jurisdiction of all the",,,,,,

applicant companies lies with this Tribunal.,,,,,,

The rationale of the Scheme is given below:-,,,,,,

i. The Transferor Company-1 was engaged in manufacturing of auto components such as aluminium die casting auto parts, clutch outer, manifold etc., and also earns",,,,,,

income from rental and investments. Whereas the Transferor Company-2 is engaged in manufacturing of auto components such as ferrous die casting parts for,,,,,,

transmission and engine such as case differential, flywheel, ground sleeve and shaft, retainer bearing case etc., which supports business of the Transferee Company.",,,,,,

The Transferor Company-3 is an investment company having investment in the shares of group companies engaged in manufacturing auto components and is the,,,,,,

holding company of Transferor Companies-1 and 2. The Transferee Company is a listed company engaged in manufacturing of auto components two-wheelers and,,,,,,

four-wheelers such as rear and front wheel hubs, clutches, break systems, engine housings, crank housings, and transmission parts etc. Accordingly, to leverage the",,,,,,

existing strength and capabilities of group entities engaged in similar businesses, to have optimised legal structure of the group with elimination of multiple legal",,,,,,

entities, it is proposed to amalgamate the above Transferor Companies with their existing business activities in the Transferee Company.",,,,,,

ii. With the proposed amalgamation, the merged entity, i.e., the Transferee Company will be able to combine infrastructural facilities such as space, land, plant and",,,,,,

machinery, etc., and optimally utilise the same and house substantial manufacturing in a single combined entity for propose business expansion unlocking growth",,,,,,

potential.,,,,,,

iii. On amalgamation, the combined entity would have improved financial health and better ability to also raise finances with the largest asset base and customer",,,,,,

network to boost its future growth.,,,,,,

iv. With the proposed amalgamation, the combined entity will overcome operational and production constraints including availability of workforce/employees,",,,,,,

expertise and supervision, other common resources, etc., being faced by the industry as such and more from the impact due to Covid-19 pandemic which may last for",,,,,,

long.,,,,,,

v. The amalgamation would result in significant reduction in multiplicity of legal and regulatory compliances, multiple record-keeping and cost saving by way of",,,,,,

reduction of overheads, administrative, managerial and other expenditure.",,,,,,

vi. The amalgamation would result in improved competitive position of the Transferee Company as a combined entity and achieving economies of scale.,,,,,,

vii. Structured, sharper and better management focusing on holistic growth of the businesses could be achieved by the proposed amalgamation.",,,,,,

viii. Concentrated effort and focus by the management to grow the business by eliminating duplicative communication and burdensome co-ordination efforts across,,,,,,

multiple entities.,,,,,,

It is stated that the Board of Directors of all the Applicant Companies in their respective meetings held on 26.07.2021 have considered and,,,,,,

approved the Scheme of Amalgamation subject to sanctioning of the same by this Tribunal. The copy of the Board Resolutions of the Applicant No.1,",,,,,,

Applicant No.2, Applicant No.3 and Applicant No.4 are at Annexures B3, C3, D3 and E3 respectively of the application. The Applicant Companies",,,,,,

have authorized Mr. Om Prakash Aggarwal, Mr. Rakesh Kumar Sharma, Mr. B.M. Jhamb, Mr. Sanjeev Garg, Mr. Jagdish Chand Dwivedi and Mr.",,,,,,

S. Kartik, to do all acts and deeds and things in relation to the Scheme. The affidavits of Mr. Jagdish Chand Dwivedi, Mr. Sanjeev Garg, Mr. Om",,,,,,

Prakash Aggarwal and Mr. B.M. Jhamb, on behalf of all the Applicant Companies have been filed in support of contents of the application for seeking",,,,,,

appropriate orders/directions.,,,,,,

The Appointed Date of the Scheme is 01.04.2021 as mentioned in the Clause 4.4 of Scheme of Amalgamation attached as Annexure-A of the,,,,,,

application.,,,,,,

It is stated that all the Applicant Companies have filed the audited financial statements as on 31.03.2021 at Annexure-B2, C2, D2 and E2",,,,,,

respectively of the application.,,,,,,

It is submitted that no investigation or proceedings are pending under the provisions of the Companies Act, 2013, against any of the Applicant",,,,,,

Companies.,,,,,,

It is further submitted that the Scheme does not provide for any corporate debt restructuring with any of the secured and unsecured creditors of,,,,,,

the Applicant Companies.,,,,,,

It is submitted that in pursuance of the proviso to Sec. 230 (7) and Section 232 (3) of the Act, the Applicant Companies have filed the certificate",,,,,,

dated 03.09.2021 issued by Statutory Auditors of Applicant Companies certifying that the Scheme is in compliance with the Accounting Standards,,,,,,

under Section 133 of the Act is at Annexure-B7, C7, D7 and E7 respectively of the application.",,,,,,

It is submitted by the learned counsel that the Scheme (Annexure-A) also takes care of the interests of the staff/workers and employees of the,,,,,,

Applicant Companies. It is stated in Clause 14.1 of the Scheme that upon coming into effect of this Scheme:,,,,,,

a) All staff, workmen and employees who are in employment of the Transferor Companies on the Effective Date shall become the staff, workmen and employees of the",,,,,,

Transferee Company with the effect from the Appointed Date on the basis that:,,,,,,

(i) their employment shall be deemed to have been continuous and not interrupted by reasons of the said transfer; and,,,,,,

(ii) the terms and conditions of their employment after such transfer shall not in any way be less favourable to them than those applicable to them immediately,,,,,,

preceding the said transfer.,,,,,,

It is stated that the Applicant No.1, Applicant No.2 and Applicant No.3 are public limited company and are not listed in any stock exchange in",,,,,,

India and the companies does not have any other specific sectoral regulator other than Central Government through Regional Director, Registrar of",,,,,,

Companies, Official Liquidator and Income Tax Authorities. The aforesaid affidavits duly signed by the authorised representative of the respective",,,,,,

applicant companies are attached as Annexure-F of the application. It is also deposed by the authorised representative of the Applicant No.4 that it is,,,,,,

Name of the

Applicant

Companies","Shareholders along with their

consent on

affidavit",,Creditors along with their consents on affidavit,,,

,"Equity

Shareholders","Consents

submitted on

affidavit","Secured

Creditors","Consents

submitted on

affidavit","Unsecured

Creditors","Consents

submitted on

affidavit

Applicant No.1,7,100%,Nil,NA,22,Nil

Applicant No.2,7,100%,Nil,NA,377,Nil

Applicant No.3,7,100%,Nil,NA,Nil,NA

Applicant No.4,"75,280",Nil,10,Nil,1184,Nil

differing views of coordinate Benches, this Bench has followed the decisions of the Hon’ble NCLAT in DLF Phase-IV Commercial Developers",,,,,,

Limited and Others with DLF Limited, (Company Appeal (AT) No.180 of 2019) dated 19.08.2019 and Alovera Tradelink Pvt. Limited and Others Vs.",,,,,,

Ostwal Physchem (India) Limited in Company Appeal (AT) No.178/2019 decided on 06.08.2019 on this issue and has held that “depending on the,,,,,,

facts and circumstances of each case, the NCLT has the powers to dispense with the meetings of shareholders and others by using judicial",,,,,,

discretionâ€​.,,,,,,

Accordingly, the directions of this Bench in the present case are as under:-",,,,,,

I. In relation to Applicant No.1/Transferor Company No.1:,,,,,,

a. The meetings of the Equity Shareholders is dispensed with keeping in view the shareholding and ownership pattern of the company and the fact that the consents,,,,,,

by way of affidavits have been received;,,,,,,

b. Since, there are no Secured Creditors in the Applicant No.1. Therefore, there is no scope for any meeting;",,,,,,

c. The meeting of the Unsecured Creditors is to be convened as prayed for on 02.04.2022 at 10:00 AM through Video Conferencing with facility of remote e-voting,",,,,,,

subject to notice of meeting being issued. The quorum of the meeting of the unsecured creditors shall be 9 in number or 40% in value of the unsecured creditors;,,,,,,

II. In relation to Applicant No.2/Transferor Company No.2,,,,,,

a. The meetings of the Equity Shareholders is dispensed with keeping in view the shareholding and ownership pattern of the company and the fact that the consent,,,,,,

by way of affidavits has been received;,,,,,,

b. Since, there are no Secured Creditors in the Applicant No.2. Therefore, there is no scope for any meeting;",,,,,,

c. The meeting of the Unsecured Creditors is to be convened as prayed for on 02.04.2022 at 12:30 PM through Video Conferencing with facility of remote e-voting,",,,,,,

subject to notice of meeting being issued. The quorum of the meeting of the unsecured creditors shall be 151 in number or 40% in value of the unsecured creditors;,,,,,,

III. In relation to Applicant No.3/Transferor Company No.3 :,,,,,,

a. The meetings of the equity shareholders is dispensed with keeping in view the shareholding and ownership pattern of the company and the fact that the consents,,,,,,

by way of affidavits have been received;,,,,,,

b. Since, there are no Secured Creditors in the Applicant No.3. Therefore, there is no scope for any meeting;",,,,,,

c. Since, there are no Unsecured Creditors in the Applicant No.3. Therefore, there is no scope for any meeting;",,,,,,

IV. In relation to Applicant No.4/Transferee Company:,,,,,,

a. The meetings of the Equity Shareholders is to be convened as prayed for on 03.04.2022 at 12:30 PM through Video Conferencing with facility of remote e-voting,",,,,,,

subject to notice of meeting being issued. The quorum of the meeting of the equity shareholders shall be 30,112 in number or 40% in value of the equity shareholders;",,,,,,

b. The meeting of the Secured Creditors is to be convened as prayed for on 03.04.2022 at 10:00 AM through Video Conferencing with facility of remote e-voting,",,,,,,

subject to notice of meeting being issued. The quorum of the meeting of the secured creditors shall be 4 in number or 40% in value of the unsecured creditors;,,,,,,

c. The meeting of the Unsecured Creditors is to be convened as prayed for on 02.04.2022 at 2:30 PM through Video Conferencing with facility of remote e-voting,",,,,,,

subject to notice of meeting being issued. The quorum of the meeting of the unsecured creditors shall be 474 in number or 40% in value of the unsecured creditors;,,,,,,

V. In case the required quorum as noted above for the meetings is not present at the commencement of the meeting, the meeting shall be adjourned by 30 minutes and",,,,,,

thereafter the persons present and voting shall be deemed to constitute the quorum.,,,,,,

VI. Aashish Chopra, Senior Advocate, office address #112, Sector 16-A, Chandiagrh-160015, Mobile No. +91-172-2540434, 2770434, +91-9815322112, email",,,,,,

id:aashish@aachopra.com, is appointed as the Chairperson for the meeting to be called under this order. An amount of ₹2,00,000/- (Rupees Two Lakhs Only) be paid",,,,,,

for his/her services as the Chairperson.,,,,,,

VII. Mr. Raghav Kakkar, Advocate, R/o 246 K, Ground Floor, Omaxe, Phase-1, New Chandigarh 140901, Mobile No.7677555550, e-mail id:",,,,,,

raghav.kakkar@kakkarchambers.co.in, is appointed as the Alternate Chairperson for the meeting to be called under this order. An amount of ₹1,50,000/-(Rupees One",,,,,,

Lakh Fifty Thousand Only) be paid for his/her services as the Alternate Chairperson.,,,,,,

VIII. Rahul Jogi, Advocate, address: 1526, Sector 18D, Chandigarh-160018, Mobile No.9990540888, email id: csrahuljogi@gmail.com, is appointed as the Scrutinizer for",,,,,,

the above meeting to be called under this order. An amount of ₹1,00,000/- (Rupees One Lakh Only) be paid for his/her services as the Scrutinizer.",,,,,,

IX. The fee of the Chairperson, Alternate Chairperson and Scrutinizer and other out of pocket expenses for them shall be borne jointly by the Applicant No.1,",,,,,,

Applicant No.2 and Applicant No.4.,,,,,,

X. It is further directed that individual notices of the said meetings shall be sent by the Applicant No.1, Applicant No.2 and Applicant No.4 through registered post or",,,,,,

speed post or through courier or e-mail, 30 days in advance before the schedule date of meeting, indicating the day, date, the place and time as aforesaid, together",,,,,,

with a copy of the Scheme, copy of explanatory statement as discussed in paras 4 of this order required to be sent under the Companies Act, 2013 and the applicable",,,,,,

Rules and any other documents as may be prescribed under the Act shall also be duly sent with the notice.,,,,,,

XI. It is further directed that along with the notices, Applicant No.1, Applicant No.2 and Applicant No.4 shall also send, statements explaining the effect of the",,,,,,

scheme on the creditors, key managerial personnel, promoters and non-promoter members etc. along with effect of the amalgamation on any material interests of the",,,,,,

Directors of the Company or the debenture trustees, if any, as provided under sub-section 3 of Section 230 of the Act.",,,,,,

XII. It is also directed that the provisional accounting statement of Applicant No.1, Applicant No.2, Applicant No.3 and Applicant No.4 as on 30.09.2021 or as on a",,,,,,

subsequent date be also circulated for the aforesaid meeting in terms of Section 232 (2) (e) of the Act.,,,,,,

XIII. That the Applicant No.1, Applicant No.2 and Applicant No.4 shall publish advertisement with a gap of at least 30 clear days before the aforesaid meeting,",,,,,,

indicating the day, date and place and the time of meeting as aforesaid, to be published in “Financial Express†(English, Delhi NCR Edition) and “Financial",,,,,,

Express†(Hindi, Delhi NCR Edition). It be stated in the advertisement that the copies of “Schemeâ€, the Explanatory Statement required to be published pursuant",,,,,,

to Section 230 to 232 of the Act. The Applicant No.1, Applicant No.2, and Applicant No.4 shall also publish the notice on its website, if any.",,,,,,

XIV. It shall be the responsibility of the Applicant No.1, Applicant No.2 and Applicant No.4 to ensure that the notices are sent under the signature and supervision",,,,,,

of the authorized representative of the company on the basis of Board resolutions and that they shall file their affidavits in the Tribunal at least ten days before the,,,,,,

date fixed for the meeting.,,,,,,

XV. Voting shall be allowed on the “Scheme†through electronic means which will remain open for a period as mandated under Clause 8.3 of Secretarial Standards,,,,,,

on General Meetings to the Applicant No.1, Applicant No.2 and Applicant No.4 under the Act and the Rules framed thereunder.",,,,,,

XVI. The Scrutinizer’s report will contain his/her findings on the compliance to the directions given in Para X to XV above.,,,,,,

XVII. The Chairperson shall be responsible to report the result of the meeting to the Tribunal in Form No. CAA-4, as per Rule 14 of the Companies (Compromises,",,,,,,

Arrangements and Amalgamations) Rules, 2016 within 7 (seven) days of the conclusion of the meeting. He would be fully assisted by the authorized",,,,,,

representative/Company Secretary of the Applicant No.1, Applicant No.2 and Applicant No.4 and the Scrutinizer, who will assist the Hon’ble Chairperson and",,,,,,

Alternate Chairperson in preparing and finalizing the report.,,,,,,

XVIII. The Applicant No.1, Applicant No.2 and Applicant No.4 shall individually and in compliance of sub-section (5) of Section 230 of the Act and Rule 8 of",,,,,,

Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 send notices in Form No. CAA-3 along with copy of the Scheme, Explanatory Statement",,,,,,

and the disclosures mentioned in Rule 6 of the “Rules†to (i) Central Government through the Regional Director (Northern Region), Ministry of Corporate Affairs,",,,,,,

New Delhi (ii) Registrar of Companies, NCT of Delhi & Haryana (iii) Official Liquidator; (iv) Security Exchange Board of India (SEBI), (v) National Stock Exchange",,,,,,

(NSE), (vi) Bombay Stock Exchange (BSE) and (vii) Income Tax Department through the Nodal Officer â€" Principal Commissioner of Income Tax, NWR, Aayakar",,,,,,

Bhawan, Sector 17-E, Chandigarh by mentioning the PAN number of the Applicant Companies; and such other Sectoral Regulator(s) governing the business of the",,,,,,

Applicant No.1, Applicant No.2, Applicant No.3 and Applicant No.4, if any, stating that representation, if any, to be made by them shall be sent to the Tribunal within",,,,,,

a period of 30 days from the date of receipt of such notice and copy of such representation shall be simultaneously sent to the concerned companies, failing which it",,,,,,

shall be presumed that they have no objection to the proposed Scheme.,,,,,,

XIX. The Applicant Companies shall furnish a copy of the Scheme free of charge within one day of any requisition for the Scheme made by any creditor or,,,,,,

member/shareholder entitled to attend the meeting as aforesaid.,,,,,,

XX. The authorized representative of the Applicant No.1, Applicant No.2 and Applicant No.4 shall furnish an affidavit of service of notice of meeting and publication",,,,,,

of advertisement and compliance of all directions contained herein at least a week before the proposed meeting.,,,,,,

XXI. All the aforesaid directions are to be complied with strictly in accordance with the applicable laws including forms and formats contained in the Rules as well as,,,,,,

the provisions of the Companies Act, 2013 by the Applicant No.1, Applicant No.2 and Applicant No.4.",,,,,,

XXII. While moving the application for second motion in case the Scheme is approved in the respective meetings by the requisite majority, the applicant-company at",,,,,,

the time of second motion shall also file the financial statements upto 30.09.2021 or later.,,,,,,

With the aforesaid directions, this First Motion Petition stands disposed of. A copy of this order be supplied to the learned counsel for the",,,,,,

Applicant Companies who in turn shall supply a copy of the same to the Chairperson, Alternate Chairperson and the Scrutinizer immediately.",,,,,,