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Judgment
Prabhat Kumar, Member (Technical)
This Bench is convened through Video Conferencing.
The present Application is an Application for Scheme of Amalgamation of Argus Chemtech Private Limited, the First Transferor Company; Linlite Sales Private Limited, the Second Transferor Company; Polyox Manufacturing Private Limited; the Third Transferor Company with Rasendra Chemexport Private Limited, the Transferee Company and their respective Shareholders under sections 232 read with Section 230 of the Companies Act, 2013.
The Board of Directors of the Applicant Companies approved the Scheme of Amalgamation on 21st January, 2023. The appointed date of Scheme of Amalgamation is 1st April, 2022.
That the First Transferor Company is engaged in the business of manufacturing and trading of Textile processing chemicals, the Second Transferor Company is engaged in the business of trading in goods, the Third Transferor Company is engaged in the business of manufacturing Textile processing chemicals and the Transferee Company is engaged in the business of trading in Chemicals, polymer products, wrapper cloth etc.
The rationale for the Scheme is as under:
i. The Transferor Companies and the Transferee Company have their registered offices in Mumbai, Maharashtra and the Transferor and Transferee Companies are owned, managed, controlled and promoted by the same family.
ii. The Transferor Companies and Transferee Company are in similar line of business. The management of all these Companies are of an informed opinion that if such resources of the Transferor Companies are absorbed by the Transferee Company it will prove useful and beneficial for the business of the Transferee Company.
iii. The First Transferor Company and Second Transferor Company may attract the provisions of Non-Banking Financial Companies (NBFC) and thus it is desired to amalgamate the same into Transferee Company so that the NBFC provisions are not attracted post-merger.
iv. The combined resources of all the Transferor Companies will enable the Transferee Company to better utilise the assets in more efficient manner and earn higher profits by taking benefits of synergies.
v. The proposed merger will result into decrease in cost of carrying business operations. The proposed merger will also result in strengthening the financial position and ability to raise resources for conducting the business.
vi. Elimination of duplication in administrative, compliance and other overhead costs and multiple record keeping thus resulting in cost savings for the Companies.
The authorized, issued, subscribed and paid-up share capital of the First Applicant Company/ Transferor Company as on 30th September, 2022 is as under:
Share Capital
Amount in Rs.
Authorized Share Capital
10,000 Equity Shares of Rs.10/- each
1,00,000
Total
1,00,000
Issued, Subscribed and Paid-Up Capital
10,000 Equity Shares of Rs.10/- each
1,00,000
Total
1,00,000
The authorized, issued, subscribed and paid-up share capital of the Second Applicant Company / Transferor Company as on 30th September, 2022 is as under:
Share Capital
Amount in Rs.
Authorized Share Capital
1,00,000 Equity Shares of Rs.10/- each
10,00,000
Total
10,00,000
Issued, Subscribed and Paid-Up Capital
10,000 Equity Shares of Rs.10/- each
1,00,000
Total
1,00,000
The authorized, issued, subscribed and paid-up share capital of the Third Applicant Company / Transferor Company as on 30th September, 2022 is as under:
Share Capital
Amount in Rs.
Authorized Share Capital
1,00,000 Equity Shares of Rs.10/- each
10,00,000
Total
10,00,000
Issued, Subscribed and Paid-Up Capital
22,500 Equity Shares of Rs.10/- each
2,25,000
Total
2,25,000
The authorized, issued, subscribed and paid-up share capital of the Fourth Applicant Company / Transferee Company as on 30th September, 2022 is as under:
Share Capital
Amount in Rs.
Authorized Share Capital
25,000 Equity Shares of Rs.100/- each
25,00,000
25,000 Preference Shares of Rs.100/- each
25,00,000
Total
50,00,000
Issued, Subscribed and Paid-Up Capital
25,000 Equity Shares of Rs.100/- each
25,00,000
Total
25,00,000
That there are 2 (two) Equity Shareholders in the First Applicant Company amounting to Rs. 1,00,000/-, there are 2 (two) Equity Shareholders in the Second Applicant Company amounting to Rs. 1,00,000/-, there are 3 (three) Equity Shareholders in the Third Applicant Company amounting to Rs. 2,25,000/- and there are 4 (four) Equity Shareholders in the Fourth Applicant Company/ Transferee Company amounting to Rs. 25,00,000/-. All of them have given their consent to the Scheme by way of Consent Affidavits. In view of this, the meeting of the Equity Shareholders of the First Applicant Company, Second Applicant Company, Third Applicant Company and Fourth Applicant Company/ Transferee Company is dispensed with, subject to filing of consent affidavits from the shareholders along with valid authority in favour of such person swearing the affidavit on behalf of shareholder.
That there are no Secured Creditors in all the Applicant Companies.
There are no Unsecured Creditors in all the Transferor Companies.
There are 30 (Thirty) Unsecured Creditors in the Transferee Company having a value of Rs. 14,26,75,704/-. Since, the present Scheme does not involve an arrangement with Creditors and there will be no diminution of the liability towards the said Unsecured Creditor, meeting of the Unsecured Creditors of the Transferee Company be dispensed with. Since, individual notices is being sent to all the Creditors, meeting of the Creditors is dispensed with, subject to filing of service of proof evidencing service of notice(s) on such creditors on an affidavit duly sworn by the director of petitioner companies.
This Bench hereby directs the Applicant Companies to issue notice through Registered Post-AD/ Speed Post/ hand delivery and e-mail to its all Unsecured Creditors respectively and individually, as required under Section 230(3) of the Companies Act, 2013 with a direction that they may submit their representations, if any, to the Tribunal and copy of such representations shall simultaneously be served upon the Applicant Transferee Company. The Notice shall state that “If no representation/ response is received by the Tribunal from Unsecured Creditor(s), within a period of thirty days from the date of receipt of such notice, it will be presumed that Unsecured Creditor(s) has no representation/ objection to the proposed Scheme as per Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016”.
The Learned Authorised representative submits that upon this Scheme becoming effective and in consideration of amalgamation of the Transferor Companies with Transferee Company in terms of this Scheme, the Transferee Company shall, without any application, act or deed, issue and allot equity shares, credited as fully paid up, to the extent indicated below, to the members of the Transferor Companies holding fully paid up equity shares of Transferor Companies as on the Record Date, or to such of their respective heirs, executioners, administrators or other legal representatives or other successors in title as may be recognised by the Board of Directors of the Transferee Company in the following ratio:
To the Shareholders of First Transferor Company:
“198 (One Hundred Ninety Eight) fully paid-up Equity Shares of face value of Rs. 100/- (Rupees One Hundred Only) of the Transferee Company for every 100 (One Hundred) fully paid-up Equity Share of Rs.10/- (Rupees Ten Only) held in the First Transferor Company.”
To the Shareholders of Second Transferor Company:
“160 (One Hundred Sixty) fully paid-up Equity Shares of face value of Rs. 100/- (Rupees One Hundred Only) of the Transferee Company for every 100 (One Hundred) fully paid-up Equity Share of Rs.10/- (Rupees Ten Only) held in the Second Transferor Company.”
To the Shareholders of Third Transferor Company:
“45 (Forty Five) fully paid-up Equity Shares of face value of Rs. 100/- (Rupees One Hundred Only) of the Transferee Company for every 1000 (One Thousand) fully paid-up Equity Share of Rs.10/- (Rupees Ten Only) held in the Third Transferor Company.”
That the Applicant Companies are directed to serve notices along with copy of Scheme under the provisions of Section 230 (5) of the Companies Act, 2013 and Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 upon the -
(i) Central Government through the office of Regional Director, Western Region, Mumbai;
(ii) Jurisdictional Registrar of Companies;
(iii) Jurisdictional Income Tax Authority within whose jurisdiction the Applicant Company’s assessment are made; and the Nodal Authority in the Income Tax Department having jurisdiction over such authority i.e. Pr. CCIT, Mumbai, Address:- 3rd Floor, Aayakar Bhawan, Mahrishi Karve Road, Mumbai – 400 020, Phone No. 022-22017654 [E-mail: mumbai.pccit@incometax.gov.in];
(iv) Jurisdictional GST Authority(s) (proper officer), within whose jurisdiction such companies are assessed to tax under GST law;
(v) Ministry of Corporate Affairs;
(vi) Reserve Bank of India; and
(vii) Any other Sectoral/ Regulatory Authorities relevant to the Petitioner Companies or their business.
The Transferor Companies are also directed to serve the Copy of Scheme upon the Official Liquidator, pursuant to section 230(5) of the Companies Act, 2013 and as per Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.
The Notice shall be served through by Registered Post-AD/ Speed Post/ Hand Delivery and email along with copy of Scheme and state that “If no response is received by the Tribunal from the concerned Authorities within 30 days of the date of receipt of the notice it will be presumed that the concerned Authorities has no objection to the proposed Scheme”. It is clarified that notice service through courier shall be taken on record only in cases where it is supported with Proof of Delivery having acknowledgement of the noticee.
The Applicant Companies will submit –
a. Details of Corporate Guarantee, Performance Guarantee and Other Contingent Liabilities, if any.
b. List of pending IBC cases, if any, along with all other litigation pending against the Applicant Companies having material impact on the proposed Scheme.
c. The Applicant Companies shall submit details of all Letters of Credit sanctioned and utilized as well as Margin Money details; if any.
The Applicant Companies to file affidavit of service within 15 (fifteen) days from the last of the compliances as stated in above paragraphs are made and do report to this Tribunal that the directions regarding the issue of notices have been duly complied with.