Wardha Health Care Private Limited vs SMD Hospitals Private Limited

The sanction of the Tribunal is sought under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 (the Act) and the Rules framed thereunder for the Scheme of Amalgamation (the Scheme) of Wardha Health Care Private Limited with SMD Hospitals Private Limited and their respective shareholders.

We have heard the learned counsel for the Petitioner Companies and the Deputy Director, WR, MCA, Mumbai. No objector has come before this Tribunal to oppose the Scheme and nor has any party controverted any averments made in the Petition to the Scheme.

The Board of Directors of the Petitioner Companies have approved the Scheme in their respective Board meetings held on 25th February, 2020. The Appointed date fixed under the Scheme is 1st October, 2019.

The rationale for the Scheme is expected to have the following benefits:

a. To consolidate the pharmacy business of the group which is presently carried on by different group companies.

b. Economies in administrative and managerial costs by consolidating operations and would substantially reduce duplication of administrative responsibilities and multiplicity of records and legal and regulatory compliance.

c. Consolidating and improving the internal control systems and procedures which will bring greater management and operational efficiency due to integration of various similar functions being carried out by the entities such as human resources, finance, legal, management etc.

d. The consolidation of Wardha Healthcare Private Limited into SMD Hospitals Private Limited will strengthen the financials of the Amalgamated Company which in turn will help in raising finance at better terms.

e. Synergies arising out of the consolidation of supporting businesses through the amalgamation will lead to improved earnings and cash flow of Amalgamated Company and also in effective management of the movable and immovable properties of the Amalgamated Company.

f. Reflection of fair value of assets and liabilities of the Amalgamating Company.

g. Facilitating enhancement in value for all stakeholders.

The Company Petition is filed in consonance with sections 230 to 232 of the Act along with the Order dated 27th July, 2020 passed in the C.A. (CAA) 1030/MB-I/2020 by this Tribunal.

The Learned counsel for Petitioner Companies stated that the Petitioner Companies have complied with all requirements as per directions of the Tribunal and have filed necessary affidavits of compliance before the Tribunal. Moreover, the Petitioner Companies undertake to comply with all statutory/regulatory requirements, if any, as required under the Act and the Rules made thereunder. The undertaking given by the Petitioners is accepted.

The Regional Director (Western Region), Ministry of Corporate Affairs, Mumbai, has filed his Report dated 22nd January, 2021 inter alia stating therein the observations on the Scheme as stated in Paragraph IV (a) to (f) of the Report. In response to the observations made by the Regional Director, the Petitioner Companies have given necessary clarifications and undertakings. The observations made by the Regional Director and the clarifications and undertakings given by the Petitioner Companies are summarized in the table below:

Sr.

No.

Para (IV)

RD Report/Observations dated 22nd January, 2021

Response of the Petitioner Companies

(a)

In compliance of AS-14 (IND AS-I03), 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.

So far as the observation in paragraph IV (a) of the Report of the Regional Director is concerned, the

Learned Counsel for the Petitioner Companies submits that in addition to Compliance of AS-14 (Ind-AS 103), the Petitioner Companies 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 Definition of the Scheme.

"Appointed Date" means October 1, 2019 or any other date as may be appointed by the National Company Tribunal (Tribunal).

"Effective Date" shall mean the last of the dates on which the conditions and matters referred to in Clause 18 of the Scheme occur or have been fulfilled or waived and references in this Scheme to the date of "coming into effect of this Scheme" or "effectiveness of the Scheme" shall mean the Effective Date.

Further, the Petitioner may be asked to comply with the requirements and clarified vide circular no. F. No. 7/12/2019/CL-I date 21.08.2019 issued by the Ministry of Corporate Affairs.

So far as the observation in paragraph IV (b) of the Report of the Regional Director is concerned, the Learned Counsel for the Petitioner Companies submits that the Appointed Date is 1st October, 2019 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.

(c)

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 authorized capital shall be set-off against any fees payable by the transferee company on its authorized capital subsequent to the amalgamation and therefore, petitioners to affirm that

they comply the provisions of the section.

So far as the observation in paragraph IV (c) of the Report of the Regional Director is concerned, the Learned Counsel for the Petitioner Companies submits that the setting off of fees paid by the Transferor Company on its Authorized Share Capital shall be accordance with provisions of section 232(3)(i) of the Companies Act, 2013.

(d)

ROC Mumbai Report dated 05.01.2021 has inter alia mentioned that there are no prosecution, no technical scrutiny, no inquiry, no inspection, no complaint are pending..

Further mentioned that:-

There are two charges open as on date of Rs.3,21,97,000/- & Rs4,00,00,000/-in respect of Transferor Company

Interest of the creditors should be

Protected

The above observation may be

considered and the matter may be decide

on merit.

So far as the observation in paragraph IV (d) of the Report of the Regional Director is concerned, the Learned Counsel for the Petitioner Companies submits that the charges which is created with the Transferor Company will be transferred to the Transferee Company.

(e)

As per Financial Statement 2018-19, Wardha Health Care Private Limited (Transferor Company) has taken loan from relatives of directors as below:- Prem Grover - Rs. 14,810,000/- Sangeeta Grover - Rs. 35,190,000/- Company may give undertaking w.r.t compliance with the companies (Acceptance of Deposits) Second Amendment Rule, 2015

So far as the observation in paragraph IV (e) of the Report of the Regional Director is concerned, the Learned Counsel for the Petitioner Companies submits that the Transferee Company will comply with the Companies (Acceptance of Deposits) Second Amendment Rules, 2015.

(f)

As per Financial Statement 2018-19, Wardha Health Care Private Limited (Transferor Company) has given loans to Primus finance Private Limited amounting Rs.57,800,000/-. The amount of loan as per Balance Sheet as on 31.12.2019 is Rs.91,990,074/- it is to be noted that Sagar Meghe and Sameer Meghe are Directors in Primus Financial private Limited and also majority shareholders of transferee company, SMD hospitals Private Limited, (Transferee Company), the company is required to company with Provisions of Section 186 and 189 of the Companies Act, 2013.

So far as the observation in paragraph IV (f) of the Report of the Regional Director is concerned, the Learned Counsel for the Petitioner Companies submits that the company will comply with Provisions of Section 186 and 189 of the Companies Act, 2013.

The observations made by the Regional Director and clarifications & undertakings given by the petitioner companies have been verified and accepted.

The Official Liquidator has filed his report on 1st February, 2021 inter alia stating therein that the affairs of the Transferor Company have been conducted in a proper manner not prejudicial to the interest of the Shareholders of the Transferor Company.

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) 1083/MB/2020 is made absolute in terms of prayer made in the Petition. Hence ordered.

ORDER

The Petition be and the same is allowed subject to the following:

(i) The Scheme, with the Appointed Date fixed as 1st October, 2019 placed at Page Nos.168 to 202 (Exhibit - E) of the Company Petition is hereby sanctioned. It shall be binding on the Petitioner Companies and all concerned including their respective shareholders, Secured Creditors and Unsecured Creditors/Trade Creditors and Employees.

(ii) The Transferor Company be dissolved without being wound up.

(iii) The Registrar of this Tribunal shall issue certified copy of this Order along with the Scheme forthwith. Petitioners are directed to file a copy of this Order along with a copy of the Scheme with the Registrar of Companies concerned, electronically in E-Form INC-28, within 30 days from the date of receipt of the Order from the Registry.

(iv) The Petitioner Company shall lodge a copy of this Order and the Scheme duly authenticated by the Registrar of this Tribunal within 60 days from the date of receipt of the Order, with the Superintendent of Stamps concerned, for the purpose of adjudication of stamp duty, if any payable.

(v) The Petitioner Companies shall comply with the undertakings given by them.

(vi) The Petitioner Companies shall, within 15 days of receipt of this order, issue newspaper publications with respect to approval of the Scheme, in the same newspapers in which previous publications were issued.

(vii) The Petitioner Companies shall take all consequential and statutory steps required under the provisions of the Act in pursuance of the Scheme.

(viii) All concerned shall act on a copy of this Order along with the Scheme duly authenticated by the Registrar of this Tribunal.

(ix) Any person interested in the above matter shall be at liberty to apply to the Tribunal for any direction that may be necessary.