Sukhmani Villa Private Limited vs Registrar of Companies

Rajasekhar V.K. Member (Judicial)

The instant petition has been filed under Section 232(3) and other applicable provisions of the Companies Act, 2013 (“Act”) for sanction of the Scheme of Amalgamation of Purvagiri Infratech Limited being the Petitioner No. 2 abovenamed ("“Transferor Company No. 1”" or “Petitioner No. 2”), Soni Highrise Private Limited being the Petitioner No. 3 abovenamed ("“Transferor Company No. 2”" or “Petitioner No. 3”), Sukhmani Awas Private Limited being the Petitioner No. 4 abovenamed ("“Transferor Company No. 3”" or “Petitioner No. 4”) and Sukhmani Towers Private Limited being the Petitioner No. 5 abovenamed ("“Transferor Company No. 4”" or “Petitioner No. 5”) with Sukhmani Villa Private Limited being the Petitioner No. 1 abovenamed ("“Transferee Company”" or “Petitioner No. 1”) whereby and whereunder the Transferor Companies are proposed to be amalgamated with the Transferee Company from the Appointed Date, viz 1st Day of April,2021 in the manner and on the terms and conditions stated in the said Scheme of Amalgamation (“Scheme”).

The Petition has now come up for final hearing. Ld. Authorised Representative for the Petitioners submits as follows:-

(a) The Scheme was approved unanimously by the respective Board of Directors of the Petitioner Companies at their meetings held on 13/09/2021 respectively.

(b) The circumstances which justify and/or have necessitated the Scheme and the benefits of the same are, inter alia, as follows:-

i. Simplification of corporate structure by reducing the number of legal entities and reorganizing the legal entities in the group structure;

ii. Significant reduction in the multiplicity of legal and regulatory compliances required at present to be carried out by Transferor Companies;

iii. Elimination of duplication in administrative costs and multiple record-keeping, thus resulting in cost savings;

iv. Concentrated effort and focus by the senior management to grow the business by eliminating duplicative communication and burdensome coordination efforts across multiple entities.

(c) The Statutory Auditors of respective Petitioner Companies have by their certificates dated 01/10/2021 confirmed that the accounting treatment in the Scheme is in conformity with the accounting standards prescribed under Section 133 of the Companies Act, 2013.

(d) No proceedings are pending under Sections 210 to 227 of the Companies Act, 2013 against the Petitioner(s).

(e) The exchange ratio of shares in consideration of the Amalgamation has been fixed on a fair and reasonable basis and on the basis of the Report thereon of Abhijit Negee, Chartered Accountant.

(f) The shares of Petitioner Companies are not listed in any Stock exchange.

(g) By an order dated 20th December,2021 in Company Application (CAA) No. 191/ KB /2021, this Tribunal made the following directions with regard to meeting(s) of shareholders and creditors under Section 230(1) :-

Meeting(s) dispensed: Meeting(s) of the Equity Shareholders of all Petitioner Companies and unsecured creditors as applicable for considering the Scheme were dispensed. Further, as all Petitioner Companies had no secured creditors, no meeting of secured creditors was required to be held.

(h) Consequently, the Petitioner(s) presented the instant petition for sanction of the Scheme. By an order dated 08/03/2022 the instant petition was admitted by this Tribunal and fixed for hearing on 25/04/2022 upon issuance of notices to the Statutory / Sectoral Authorities and advertisement of date of hearing. In compliance with the said order dated 08/03/2022, the Petitioner(s) have duly served such notices on the Regional Director, MCA on 22/03/2022, Registrar of Companies on 22/03/2022, Official Liquidator on 22/03/2022, Income Tax officer on 22/03/2022. The Petitioner(s) have also published such advertisements once each in the ‘Financial Express’ on 07/04/2022 and in ‘Aajkaal’ on 07/04/2022. An affidavit of compliance duly affirmed on 08/04/2022 in this regard has also been filed by them.

(i) All statutory formalities requisite for obtaining the sanction of the Scheme have been duly complied with by the Petitioners. The Scheme has been made bona fide and is in the interest of all concerned.

Pursuant to the said advertisements and notices the Regional Director, Ministry of Corporate Affairs, Kolkata (“RD”), Official Liquidator, High Court, Calcutta have filed their representations before this Tribunal.

The Official Liquidator has filed his report dated 21st April,2022 and concluded as under: -

“That the Official Liquidator on the basis of information submitted by the Petitioner Companies is of the view that the affairs of the aforesaid Transferor Companies do not appear to have been conducted in a manner prejudicial to the interest of its members or to the public interest as per the provisions of the Companies Act, 1956/the Companies Act, 2013 whichever is applicable.”

The RD has filed his reply affidavit dated 22nd April, 2022 (“RD affidavit”) which has been dealt with by the Petitioner(s). The observations of the RD and responses of the Petitioner(s) are summarized as under: -

Paragraph No. 2 (a) of RD affidavit

(a) It is submitted that on examination of the report of the Registrar of Companies, West Bengal, it appears that no complaint and /or representation regarding the proposed Scheme of Amalgamation has been received against the Petitioner Companies, Further, as per available records all the petitioner companies are updated in filing their Statutory Returns for the year ended 31/03/2021. However, in the said report, the ROC, WB made some observations regarding non filing of form MGT-14 u/s 179(3) of the Companies Act, 2013 for the financial year 2016-17 and 2017-18 against M/s Purvagiri Infratech Limited (Copy of the said report, marked as Annexure-1 is enclosed herewith for perusal and ready reference

Paragraph 5(a) of Rejoinder

(a) With reference to para 2 (a), it stated that inadvertently MGT-14 u/s 179(3) of the Companies Act, 2013 for the financial year 2016-17 and 2017-18 by M/s Purvagiri Infratech Limited was not been filed whereas for other years it was filed. On receipt of the said reply, immediately meeting of Board of director was called but due to delay in filing, the said delay has to be condoned and it will take time. Accordingly, immediately it was decided that said resolution be filed so that it can be on record and in the meantime for the said delay necessary application be filed for condonation of delay. Copy of challans and MGT-14 filed are annexed herewith and marked as Annexure ‘A”.

Paragraph No. 2 (b) of RD affidavit

(b) Petitioner company should undertake to comply with the provisions of section 232(3)(i) of the Companies Act, 2013 through appropriate affirmation.

Paragraph 5(b) of Rejoinder

(b) With reference to para 2 (b), it is stated that the petitioners' companies undertake to comply with the provisions of section 232(3)(i) of the Companies Act 2013. Further, Part-III of Clause 25 of the Scheme relating to authorised capital is in accordance with section 232(3)(i) of the Companies Act 2013.

Paragraph No. 2 (c) of RD affidavit

(c) That the Transferee Company should be directed to pay applicable stamp duty on the transfer of the immovable properties from the Transferor Companies to it.

Paragraph 5(c) of Rejoinder

(c ). With reference to para 2 (c), it is stated that the petitioners companies undertakes to pay applicable stamp duty on the transfer of the immovable properties immediately after sanction of scheme and the Scheme becomes effective.

Paragraph No. 2 (d) of RD affidavit

(d) The Transferor Company, Soni Highrise Pvt Ltd is functioning as a Non-Banking Financial Company. Its financial statement as at 31.03.2021 exhibit that more than 50% of its total assets were financial assets and more than 50% of its income was financial income as follows:

Total asset(Rs.)

Financial asset(Rs)

Total Income (Rs)

Financial income(Rs)

183,60,571

140,00,000 [Unsecured loans Rs. 90,00,000 and investment in shares Rs 50,00,000)

12,29,670

9,83,250 (interest on loan)

The company is NBFC, but not having been registered with Reserve Bank of India under section 451A of the Reserve Bank of India Act 1934. NOC from Reserve Bank of India shall be of crucial relevance in respect of the application for the merger of the said Transferor companies. Further, the company had given unsecured loans, the outstanding amount of which as on 31.3.2020 and 31.3.2021 was Rs.90 lakhs and Rs.90 lakhs respectively.

Therefore, the loan was subsisting for more than a year. But to save the company from being reckoned as NBFC the Auditor of the company, in the Auditors' Report for 2020-21 misleadingly reported that the loan was a temporary phenomenon.

Paragraph 5(d) of Rejoinder

(d) With reference to para 2 (d), it is stated that the said Transferor Company (Soni Highrise Pvt Ltd) have surplus fund and the said fund was invested mainly in Mutual Fund and bank fixed deposit. Transferee Company is carrying Real estate business and mainly having rental business . After the scheme is sanctioned, the fund of said Transferor Company will be transferred to the Transferee Company and used by Transferee Company. It is further stated that said Transferor Company was carrying business of investment in Real Estate. The surplus fund invested in Mutual fund consist of sale proceed realized during the period 01/04/2016 to 31/03/2017 on sale of flat amounting to Rs 1,15,00,000/-. Further Petitioner Companies undertake in case it is found that the Transferee and Transferor companies has violated any provision of the Reserve Bank of India Act then the Directors of the Transferee Company, said Transferee Company shall be liable for breaching the applicable provisions of the Reserve Bank of India Act irrespective of the sanction of the Scheme. Copy of Audited accounts is annexed herewith and marked with “Letter B”.

Paragraph No. 2 (e) of RD affidavit

(e) The Hon'ble Tribunal may kindly direct the Petitioners to file an 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.

Paragraph 5(e) of Rejoinder

(e) With reference to para 2 (e), it is stated that the Scheme enclosed to the Company Application and Company Petition are one and same and there is no discrepancy and no change.

Paragraph No. 2 (f) of RD affidavit

(f) It is submitted that as per instructions of the Ministry of Corporate Affairs, New Delhi, a copy of the scheme was forwarded to the Income Tax Department on 11/01/2022 with a request to forward their comments/observations/ objections, if any. However, the same is still awaited.

Paragraph 5(f) of Rejoinder

(f) With reference to para 2 (f), it is stated that under provisions of section 230(5) of the Companies Act 2013 and in terms of the order of Hon’ble NCLT twice notices to all concerned assessing officer of the Income Tax Department having jurisdiction has been served and till date have received no communication. Further the Transferee Company undertakes that even after the sanction of scheme, the Transferee Company will be liable for all liabilities including of all Transferor Companies. The Petitioner Companies undertakes that concerned statutory authorities decision shall be binding on the petitioner Company concerned and Transferee Company will comply with the decision of the said statutory authority.

Further, it is undertaken that in case it is found that the if Transferor companies has violated any provision of the Reserve Bank of India Act then the Directors of the Transferor Companies and the transferee company shall be liable for breaching the applicable provisions of the Reserve Bank of India Act irrespective of the sanction of the Scheme.

After hearing submissions made by the Ld. Counsel appearing for the Petitioners, it is ordered that in case of any default including any Provisions of Income Tax Act in this respect of the Transferor Companies the Income Tax department , the ROC, West Bengal and all other Statutory Departments shall be at liberty to initiate appropriate proceedings against the Transferee Company, which after the sanction of the scheme by this Tribunal is in any case responsible for the liabilities/non-compliance of the Transferor Companies also.

Further, heard submissions made by the Ld Counsel appearing for the Petitioner, Mr Harihar Sahoo, Joint Director for and on behalf of RD, who appeared and were heard. Upon perusing the records and documents in the instant proceedings and considering the submissions, we allow the petition and make the following orders:-

(a) the Scheme of Amalgamation mentioned in paragraph 1 of the petition, being Annexure "A" hereto, is hereby sanctioned by this Tribunal with appointed date as 1st Day of April,2021 (“Appointed Date”) and shall be binding on Transferor Companies and Transferee Company, their respective shareholders and creditors and all concerned;

(b) all the property, rights and powers of the Transferor Companies, including those described in the Schedule of Assets herein, be transferred from the said Appointed Date, without further act or deed, to the Transferee Company and, accordingly, the same shall pursuant to Section 232(4) of the Companies Act, 2013, be transferred to and vest in the Transferee Company for all the estate and interest of the Transferor Companies therein but subject nevertheless to all charges now affecting the same, as provided in the Scheme;

(c) all the debts, liabilities, duties and obligations of the Transferor Companies be transferred from the said Appointed Date, without further act or deed to the Transferee Company and, accordingly, the same shall pursuant to Section 232(4) of the Companies Act, 2013, be transferred to and become the debts, liabilities, duties and obligations of the Transferee Company;

(d) the employees of the Transferor Companies shall be engaged by the Transferee Company, as provided in the Scheme;

(e) all proceedings and/or suits and/or appeals now pending by or against the Transferor

Companies be continued by or against the Transferee Company, as provided in the Scheme;

(f) The Transferee Company do without further application issue and allot to the shareholders of the Transferor Companies , the shares in the Transferee Company to which they are entitled in terms of the Scheme;

(g) leave is granted to the Petitioner(s) to file the Schedule of Assets and liabilities of the

Transferor Companies in the form as prescribed in the Schedule to Form No.CAA7 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 within three weeks from the date of receiving a copy of this order;

(h) That any person interested shall be at liberty to apply to this Tribunal in the above matter for any directions that may be necessary.

(i) The Transferor Companies and the Transferee Company shall each within thirty days of the date of the receipt of this order, cause a certified copy thereof to be delivered to the Registrar of Companies for registration and on such certified copies being so delivered, the Transferor Companies shall be dissolved without winding up with effect from the date or last of the dates of filing of the certified copies of the order, as aforesaid (Effective Date) and the Registrar of Companies shall place all documents relating to the Transferor Companies  and registered with him on the file kept by him in relation to the Transferee Company and the files relating to the said companies shall be consolidated accordingly.

The Petitioner(s) shall supply legible print out of the scheme and schedule of assets and liabilities in acceptable form to the Registry and the Registry will append such printout, upon verification to the certified copy of the order.

Company Petition C.P.(CAA) No. 9/(KB)/2022 is disposed accordingly.

Urgent certified copy of this order, if applied or, be supplied to the parties, subject to compliance with all requisite formalities.