Sanjoyog Trade Link Private Limited, (STPL) Vs

Heard Learned Counsel for the Petitioner Companies. No objector has come before the Tribunal to oppose the petition 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 between Sanjoyog Trade-Link Private  Limited  with  Intensive  Finance  Private  Limited  and  their respective Shareholders under the provisions of Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 and Rules framed thereunder.

The Petitioner Companies submits that the Transferee Company is the Non-Banking Finance Corporation registered with the Reserve Bank of India and is engaged in the business of borrowing and lending funds as well as making other secured investments, the Transferor Company is engage d in trading of securities and others as mentioned in the Memorandum of Association of the Company.

The Share Capital of the Petitioner Companies as on March 31, 2023 is as under:

i. The Authorised Share Capital of the First Petitioner Company is Rs. 21,00,000 divided into 2,10,000 equity shares of Rs.10 each. Issued, subscribed and paid-up capital of the First Petitioner Company is Rs. 20,76,500 divided into 2,07,650 equity shares of Rs.10 each fully paid up.

ii. The Authorised Share Capital of the Second Petitioner Company is Rs. 3,41,00,000 divided into 34,10,000 Equity Shares of Rs.10/- each. Issued, subscribed and paid-up capital of the Second Petitioner Company is Rs. 2,33,54,000 divided into 23,35,400 Equity Shares of Rs.10/- each fully paid up.

The Petitioner further submits the introduction and rationale for the Scheme: -

The Transferor Company 1 / The First Petitioner Company

Presently the First Petitioner Company is engaged in trading of securities and others as mentioned in the Memorandum of Association of the Company. The First Petitioner Company is the Wholly owned subsidiary of the Transferee Company.

The Transferee Company / The Second Petitioner Company

The Second Petitioner Company is engaged in the business of NBFC Business and is registered with RBI.

Rationale of the Scheme:

The Rationale for the scheme is as under:

The Amalgamation would have the following benefits:

• The Scheme is presented under Section 232 of Companies Act 2013 and it provides for amalgamation of Transferor Company with the Transferee Company with a view to maintain a simple corporate structure, to take effect of synergy gains and eliminate duplicate corporate procedures it is desirable to merge and amalgamate all the undertakings of Transferor Company with Transferee Company wherein Transferor Company is the wholly owned subsidiary of the Transferee Company.

• The amalgamation would create economy in administrative and managerial costs by consolidating operation and would substantially reduce duplication of administrative responsibilities and multiplicity of records and legal and regulatory compliances.

• For Efficient utilization of capital for better shareholder’s return it is desirable to merge and amalgamate all the Transferor Company into Transferee Company.

• The amalgamation of all undertakings of Transferor Company with Transferee Company shall facilitate consolidation of all the undertakings and enable effective management and unified control of operations.

• The rationale for continuing with separate entities no longer exists. It is considered prudent and appropriate to consolidate the entities. Such restructuring will lead to simplification of group structure by eliminating multiple companies thus enabling focus on core competencies.

• The combined managerial resources of the Transferor Company would enhance the capability of the Transferee Company to invest in larger and sophisticated projects to ensure rapid growth and would consolidate the strategic strength of the Amalgamated Company/ Transferee Company.

• It would also lead to growth prospects for the personnel and organizations connected with these Companies and the proposed scheme is in the interest of all the Parties including all its stakeholders.

As the Transferor Company is the wholly owned subsidiary of the Transferee Company upon the Scheme coming into effect, no shares of the Transferee Company shall be issued and allotted by the Transferee

Company either to itself or its nominees or to the shareholders of the Transferor Company.

The Petitioner Companies have approved the Scheme by passing their respective Board Resolutions dated June 19, 2023 and have approached the Tribunal for sanction of the Scheme.

The Petitioner Companies submits that the Petition has been filed in consonance with the order dated August 18, 2023 passed by this Tribunal in C.A. (CAA) No.170/MB-IV/2023.

The Petitioner Companies states that the Petitioner Companies have complied with all the requirements as per the directions of this Tribunal.

The Regional Director has filed his report dated November 10, 2023 (‘Report’) praying that this Tribunal may pass such orders as it thinks fit, save and except as stated in paragraph No. 2. In response to the observations made by the Regional Director, the Petitioner Companies have also given necessary clarifications and undertakings vide their rejoinder affidavit dated November 17, 2023 The observations made by the Regional Director and the clarifications and undertakings given by the Petitioner Companies are summarized in the table below:-

Para

Observation        by        Regional

Director

Undertaking         of         the

Petitioner Companies

2(a)

That on examination of the report of  the  Registrar  of  Companies, Mumbai dated 30.10.2023 for the Petitioner Companies falls within the jurisdiction of ROC, Mumbai (Annexed as Annexure A-1) It is submitted that no representation regarding  the  proposed  scheme of     Amalgamation     has     been received   against   the   Petitioner companies.          Further,  the Petitioner   companies  have  filed Financial     Statements     up     to 31.03.2023 further observations in ROC    report    dated    30.10.2023 which are as under:-

As  regards  the  observation made  in  Paragraph  2  (a)  of the said Report is concerned, Petitioner Companies submit that  the  jurisdiction  of  both the Petitioner Companies fall within   ROC   Mumbai   and further    confirm     that    no complaint  or  representation has been received against the petitioner companies.

i.    That  the  ROC  Mumbai  in  his report   dated   30.10.2023   has also   stated   that   no   Inquiry, inspection,    investigation    & prosecution    and    complaint under   CA   2013   have   been pending against the Petitioner companies.

As  regards  the  observation made in Paragraph 2 (a) (i) of the said Report is concerned, the    Petitioner    Companies confirm    that    no    enquiry, inspection,   investigation   & prosecution      is      pending against        the        Petitioner Companies.

ii.    The  Transferee  Company  is an  NBFC.  Therefore,  notice should be served to RBI.

As  regards  the  observation made  in  Paragraph  2  (a)  (ii) of     the     said     Report     is concerned,   The   Transferee Company   being   an   NBFC, therefore the Notice has been

duly served to RBI.

iii.   As   per   the   provisions   of Section     230(3)(i)     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

setting-off   the   fees   already paid     by     the     transferor company   on   its  authorized capital,  must  be  paid  by  the transferee   company   on   the increased  authorized  capital subsequent           to           the amalgamation

As  regards  the  observation made in Paragraph 2 (a) (iii) of     the     said     Report     is concerned,    The    Petitioner Companies   undertake   that the setting off of fees paid by the Transferor Companies on its Authorized Share Capital shall  be  in  accordance  with the  provision  of  Section  230

(3) (i) of the Companies Act, 2013. Further, the Transferor Company  is  wholly  owned subsidiary   company   so   no new shares are issued under this amalgamation.

iv.   Both the applicant companies not  filed  e-form  GNL-1  till date.

As  regards  the  observation made  in  Paragraph  2  (a)(iv) of  the  said  Report,  Both  the Companies   have   filed   e   – form GNL-1 copy of Challan are   attached to the affidavit in rejoinder as  Annexures “2 and 3”.

v.    Interest     of     the     creditors should be protected

As  regards  the  observation made in Paragraph 2(a) (v) of the       said       Report,       the Transferor     Company     i.e. Sanjoyog Trade-Link Private Limited  does  not  have  any secured        or        unsecured creditor, The    Transferee    Company does  not  have  any  secured creditor          and     have     7 unsecured     creditors     and have  received   the   consent/ NOC from all the unsecured creditors and no objections to the     Scheme     have     been received   by   the   Petitioner Companies.     Further,     the Transferee   Company undertake    to    protect    the interest    of    the    creditors. There  is  no  compromise  or arrangement  with  creditors who are being paid off in the ordinary course of business.

2(b)

The  Transferee  company  should undertake to comply with section 232(3)(i) of Companies Act, 2013, through  appropriate  affirmation in   respect   of   fees   payable   by Transferee Company for increase

of  share  capital  on  account  of merger of transfer of companies..

As   regard   the   observation made in paragraph 2(b) The    Petitioner    Companies undertake that the setting off of fees paid by the Transferor Companies           on           its Authorized    Share    Capital

shall  be  in  accordance  with the  provision  of  Section  232

(3) (i) of the Companies Act, 2013. Further, the Transferor Company  is  wholly  owned subsidiary   company   so   no new shares are issued under

this amalgamation.

2(c)

In compliance of AS-14 (IND AS- 103), the Transferor company and 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.

As  regards  the  observation made  in  Paragraph  2(c)  of this Report is concerned, the Transferor     company     and Transferee Company hereby undertakes           that           in compliance   of   AS-14   (IND AS-103),      the      Transferor company     and     Transferee Company   shall   pass   such accounting entries which are necessary in connection with the  Scheme  to  comply  with all    applicable    Accounting

Standards such as AS-5 (IND

AS-8),       to       the       extent

applicable

2(d)

The Hon’ble Tribunal may kindly direct  the  petitioner  Companies to file and affidavit to the extent that  the  Scheme  enclosed  to  the Company       Application       and Company  petition  are  one  and same and there is no discrepancy, or no change is made.

As  regards  the  observation made  in  Paragraph  2(d)  of this Report is concerned, the petitioner   companies   state that  the  Scheme  enclosed  to the    Company    Application and   Company   petition   are one and same and there is no discrepancy , or no change is

made.

2(e)

The Petitioner Companies 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 the Amalgamation or arrangement.        Further,        the approval  of  the  scheme  by  the Hon’ble  tribunal  may  not  deter such authorities to deal with any of  the  issue  arising  after  giving

effect to the scheme. The decision

of    such    authorities    shall    be binding      on      the      petitioner companies concerned.

As  regards  the  observation made  in  Paragraph  2  (e)  of this       Report,       Petitioner Companies have duly served notices       upon       all       the regulatory authorities i.e. the Regional   Director,    Official Liquidator,      Registrar      of Companies,     Income     Tax Authorities     and     Reserve bank        of        India,        the observations   made   by   the

concerned   authorities   have been   duly   responded   and dealt  with  by  the  Petitioner Companies.   The   Petitioner Companies      hereby      also undertake  and  confirm  that the  approval  of  the  Scheme by the Hon’ble Tribunal will not     deter     any     of     the authorities  to  deal  with  any of  the  issues  in  accordance with  the  provisions  of  law, arising  after  giving  effect  to the  Scheme.  The  decision  of such   Authorities    shall   be binding   on   the   Petitioner companies concerned.

2(f)

As per Definition of the Scheme, "Appointed      Date"      For      the purpose  of  this  Scheme  and  for Income    Tax    Act,    1961,    the “Appointed    Date”    means    1st April, 2023 or such other date as the    National    Company    Law

Tribunal  NCLT  Mumbai  or  any other    Competent    Government Authority may direct, which shall be   the   date   with   effect   from which  this  Scheme  shall become effective   and   with   effect   from which     date     the     Transferor Companies    shall    amalgamate with the Transferee Company in terms  of  the  Scheme,  upon  the order   sanctioning   this   Scheme becoming effective.; And "Effective      Date"      shall      the Appointed   Date   as   defined   in section  232  (6)  of  the  Company Act,    2013.    Reference    in    this Scheme  to the date of "upon the Scheme   becoming   effective"   or "effectiveness    of    the    Scheme" shall  mean  the  Appointed  Date subject       to       fulfillment       of conditions   under   Clause   17   of

this Scheme;

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.

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  regards  the  observation made  in  Paragraph  2  (f)  of this   Report,   the   Petitioner Companies      confirm      the Petitioner Companies undertakes          that  the Appointed  Date  is  1st   April

2023   as   mentioned   in   the Scheme       which       is       in compliance     with     Section 232(6) of the Companies Act, 2013  and  the  Scheme  shall take      effect      from      such Appointed Date and no other date.  Further,  the  Petitioner Companies    undertakes    to comply            with            the requirements   clarified   vide circular     No.7/12/2019/CL-I dated  21.08.2019  issued  by the   Ministry   of   Corporate Affairs.

2(g)

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

regard,  the  petitioner  company ensure   compliance   of   all   the provisions of Income Tax Act and Rules thereunder

As  regards  the  observation

made  in  Paragraph  2  (g)  of

the said Report, the Transferee   Company   is   in compliance  with  provisions

of    Section    2(1B)    of    the Income     Tax     Act,     1961. Further        the        Petitioner Companies    ensure compliance      of      all      the provisions of Income Tax Act and Rules thereunder and all issues    arising    under    the Income Tax Act 1961 will be met      and      answered      in accordance with law.

2(h)

Petitioner       Companies       shall undertake   to   comply   with   the directions   of   the   Income   Tax Department & GST Department , if any

As  regards  the  observation made  in  Paragraph  2  (h)  of the       said       Report,       the Petitioner Companies hereby undertake   to   comply   with the  directions  of  the  Income tax department, if any issued and  further  state  that  Both Petitioner   Companies      are not     supposed     to          be registered         with         GST department..

2(i)

Petitioner Companies may satisfy the    Hon’ble    NCLT    that    the interest    of    creditors    shall    be protected  on  implementation  of the scheme.

As  regards  the  observation made  in  Paragraph  2(i))  of the       said       Report,       the Transferor     Company     i.e. Sanjoyog Trade-Link Private Limited  does  not  have  any secured        or        unsecured creditor,

The    Transferee    Company does  not  have  any  secured creditor       and       have       7 unsecured     creditors     and have  received   the   consent/ NOC from all the unsecured creditors  and  also  received no  objections  to  the  Scheme Further,       the       Petitioner companies     undertake     to protect   the   interest   of   the creditors at all times

2(j)

Petitioner    company    may    be directed        to        submit        an undertaking  stating  the  name  of

Sectorial      regulator      of      the

petitioner    company    and    also

undertake  that  prior  notice  has

been served to sectorial regulator

and    all    requirements    of    the

concern regulator, if any has been

complied with.

As  regards  the  observation made in Paragraph 2 (j) of the said   Report,   the   Petitioner

Companies    undertakes    to

comply with the directions of

the       concerned       sectoral

Regulatory,    to    the    extent

applicable, if so required.

2(k)

It is observed that the Transferee

company  is  an  NBFC  company

therefore,    petitioner    company

may   be   directed   to   place   on

record prior notice issued to RBI

and obtain NOC from RBI.

The    Transferee    Company

being   an   NBFC   company,

therefore  the  Notice  is  duly

served        to        RBI        and

representation  from  RBI has

been received by their letter

dated  17th    November  2023.

The    Transferee    Company

undertakes  to  comply  with

the requisitions contained in

letter  dated  17th    November

2023   post   sanctioning   and

receipt  of  certified  copy  of

the order.

2(l)

Further,  it  is  observed  from  the

financial      statements      as      at

31.032023,         the         petitioner

Transferor     Company     namely

Sajoyog       Trade-link       Private Limited   has   issued   shares   at security  premium  and  collected total premium of Rs. 375.54 Lacs. The  issue  raised  primarily  falls under the domain of Income Tax Department     and     amount     is brought  into  company  prior  to 2012-13  by  giving  allotments  to Kolkatta     based     allottees     on 31.032010  at  high  premium  per share  @  Rs.  190/-  premium  per shares  over  face  value  of  shares and    later    on    transferred    to existing  shareholders  at  Rs.  10/- each.   Further   the   money   were infused through accommodation entries by  allotment  of shares  to Kolkata based shell Companies. Thus,  Petitioner  Company  may be  asked  to  satisfy  the  Hon'  ble NCLT  about  infusion  of  money into petitioner companies by way of legal source and assessment of share   capital   u/   s.   68   of   the Income Tax Act, 1961, for issue of shares  at  fair  value  in  order  to confirm   compliance   of   Income Tax Laws or Hon'ble NCLT may seek the comments from Income Tax  department,  if  any,  on  this issue  in  light  of  CBDT  Circular dated   17.032023   nominated   Sr. Principal       Commissioner       of Income  Tax,  Mumbai  as  Nodal Officer  in  the  matter  of  Section 230-232 of the Act and the matters falls under domain of Income Tax Act, 1961 and this Directorate has pointed  out  above  observations based     on     information     from MCA21    records    and    relevant portion of reply of the Company as  enclosed  as  Annexure  —  A2 collectively.

Petitioner Company

(transferor     company)     i.e

Sanjoyog Trade-Link Private

Limited had issued shares at

premium       as       per       the Companies  Act,  1956  in  the financial  year  2009-10.    The Income  Tax  Assessment  of the Petitioner Company had been    done    for    the    said financial year and the copy of Assessment        Order        is enclosed as Annexure “4” to the   affidavit   in   rejoinder. Further   there   is   no   notice issue under section 68 of the Income Tax Act 1961 and this matter is very old and is time barred as per the Income tax laws.

Further  Petitioner  Company would  like  to  state  that  the Notice  under  section  230(5) of  the  Companies  Act  2013 also    served    to    Principal Commissioner of Income tax Mumbai   as   Nodal   Officer

and      not      received      any

observation    from    Income Tax authority. Copy of notice served   is   attached   as   per Annexure “5”

Ms. Aparna M., Deputy Director, Office of RD (WR) appeared on the date of hearing and submits that above explanations and clarifications given by the Petitioner Companies in rejoinder are satisfactory and they have no further objection to the Scheme.

The clarifications and undertakings given by the Petitioner Companies are accepted by this Tribunal.

The Official Liquidator has filed his report on 30th October 2022 inter alia, stating therein that the affairs of the Transferor Company have been conducted in a proper manner.

From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy.

Since all the requisite statutory compliances have been fulfilled, C.P.(CAA) No. 170/MB/ 2023 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 April 01, 2023.

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 Scheme will become effective on filing of the copy of this order with the concerned Registrar of Companies.

The Petitioner Companies to lodge a copy of this Order along with the Scheme duly authenticated / certified by the Designated Registrar of this Tribunal 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 of this Tribunal.

All concerned regulatory authorities to act on a copy of this Order along with Scheme duly certified by the Designated Registrar of this Tribunal.

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.