Windmere Hospitality (India) Private Limited Vs

Kuldip Kumar Kareer, Member (Judicial)

Heard the Learned Counsel for the Petitioner Companies. No objector has come before this Tribunal to oppose the Scheme and nor has any party controverted any averments made in the Petitions to the said Scheme.

The sanction of the Tribunal is sought under Sections 230 to 232 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013 and the rules framed there under for the Scheme of Amalgamation of WINDMERE HOSPITALITY (INDIA) PRIVATE LIMITED, the Transferor Company with SARAYU INVESTMENTS PRIVATE LIMITED, the Transferee Company.

The Petitioner Companies have approved the said Scheme of Amalgamation by passing the Board Resolutions dated 31st January, 2022 which are annexed to the respective Company Scheme Petitions.

The Learned Advocate appearing on behalf of the Petitioners states that the Petitions have been filed in consonance with the Order passed

in the Company Scheme Application No. 176 of 2022 of the Hon’ble Tribunal.

The Learned Advocate appearing on behalf of the Petitioners further states that the Petitioner Companies have complied with all requirements as per directions of the National Company Law Tribunal, Mumbai Bench and they have filed necessary affidavits of compliance in the National Company Law Tribunal, Mumbai Bench.

The Learned Counsel for the Petitioner Companies states that the Petitioner Company No. 1 is presently carrying on business of Establishing, Maintaining and Conducting Hotels, Restaurants, Permit rooms and Holiday Resort, Recreation Complex and other facilities such as Health Clubs, Swimming Pool, Boutiques, Shopping Arcades and that the Petitioner Company No. 2 is presently carrying on the business of Invest in and deal with and acquire and hold shares, stocks debentures, debentures-stock, bonds, notes, obligations and securities issued or guaranteed by any company or body corporate and debentures, debentures-stocks, and securities issued or guaranteed by any state. or Central Govt. Public body or authority, Municipal local.

The rationale for the Scheme of Amalgamation of the Petitioner Companies is in the interest of the stakeholders of these companies and shall result in the following benefits:

The transferor company, due to the slack in the industry, is not carrying on any business operations presently. The management of the Transferor Company also decided not to carry on any future business. Presently, there is no revenue stream in transferor Company to sustain the company’s basic operations and running cost including compliance costs. This has resulted in the unproductive cost of administration of managing the company and compliances cost. Hence the Transferor Company decided to merge its business operations into the Transferee Company through following merger process as prescribed under section 230 of the Companies Act 2013 for effective management and unified control of operations to avoid duplication of administrative activities, reduce multiplicity of records and statutory compliances.

The Regional Director has filed his Report dated 13th March, 2023 inter-alia making the following observations in paragraphs 2 (a) to (i) which are reproduced hereunder:

Para

Observation by the Regional Director

Undertaking    of    the    Petitioner Company/Rejoinder

2(a)

In  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(ND AS-8) etc.

So    far    as    the    observation    in paragraph 2 (a) of the Report of the Regional  Director  is  concerned,  the Learned  Counsel  for  the  Petitioner Companies     submits     that     the Transferee     Company    undertakes that in addition to compliance of AS-

14   for   accounting   treatment,   the Transferee Company shall pass such accounting    entries    as    may    be necessary   in   connection   with   the Scheme    to    comply    with    other applicable     accounting     standards

such as AS-5 as applicable.

2(b)

As per the Definition of the Scheme.

" Appointed Date" means 1 April, 2021 or such other date as  may be proposed and approved by the Hon'ble Regional Director (Western    Region)    or    Hon'ble    National Company  Law Tribunal (as  the  case  may

be)  or  as  may  be  directed  by  the  Hon'ble

Regional   Director   (Northern   Region)   or Hon'ble  National  Company  Law  Tribunal;

And

“Effective  Date”  naans  the  date  on  which the last of the approvals/ events specified in  Clause  5  of  Part  V  of  the  Scheme  are obtained/    have    occurred.    The    words "scheme   becoming   effective"   or   similar words  in  the  Scheme  shall  be  construed accordingly;

So    far    as    the    observation    in paragraph 2 (b) of the Report of the Regional  Director  is  concerned,  the Petitioner  Companies  through  their Counsel submits that the Appointed Date is 1st  April, 2021. The Counsel further  submits  that  the  Petitioner will comply with the requirements as to Appointed Date and clarified vide circular  no.  F.  No.7/12/2019/CL-1 dated   21.08.2019   issued   by   the Ministry.

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 27.08.2019   issued   by   the   Ministry   of Corporate Affairs.

2(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 and stamp duty paid by    the    transferor    company    on    its authorised  capital shall be  set-off  against

fees   and   stamp   duty   payable   by   the

transferee    company    on    its    authoised capital  subsequent  to  the  amalgamation and   therefore,   petitioners   to   undertake that the transferee company shall pay the difference of fees and stamp duty.

So    far    as    the    observation    in paragraph 2 (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  Authorised  Share Capital  shall  be  in  accordance  with provisions  of section 232(3)(i)  of the Companies Act, 2013.

2(d)

The Hon’ble Tribunal may kindly seek the undertaking  that  this  Scheme  is  approval by  the  requisite  majority  of  members  and creditors as per Section 230(6) of the Act in meetings  duly  held  in  terms  of  section 230(1) read with 7 subsection (3) to (5) of Section  230  of  the  Act  and  the  Minutes thereof    are    duly    placed    before    the Tribunal.

So    far    as    the    observation    in paragraph 2 (d) of the Report of the Regional  Director  is  concerned,  the Petitioner Companies undertake that this   Scheme   is   approved   by   the requisite  majority  of  members  and notice was served to creditors as per the order given by the NCLT.

2(e)

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 regards,   the   petitioner   company   shall ensure  compliance  of  all  the  provisions  of Income Tax Act and Rules thereunder.

So    far    as    the    observation    in paragraph 2 (e) of the Report of the Regional  Director  is  concerned,  the Learned  Counsel  for  the  Petitioner Companies     submits     that     the Petitioner   Company   shall   ensure compliance  of  all  the  provisions  of Income     Tax     Act     and     Rules

thereunder.

2(f)

ln the provided Audited Balance Sheet as on 31.03.2022 of the Transferor Company, Security  Premium  of  Rs.  2,30,00,000/-  at premium of Rs. 1,150/- per share (Nominal Value of Rs. 100/- per share) is showing in the Balance Sheet, however, details of the allottee   is   not   showing   on   the   portal, therefore    petitioner    company    may    be directed  to  place  on  record  the  details  of

the allottee and valuation of shares at the

time of issue at high premium.

ln  view  of  the  above,  if  agreed,  Hon'ble NCLT may ask the Transferor Company to satisfy  that  Income  Tax  Department  has properly  assessed  the  increase  of  share capital  from  time-to-time  u/s.  68  of  the Income Tax Act, 1961 and also payment of Income  Tax  by  existing  shareholders,  if they have purchased shares at lower price than issued price from original allotees or seek the reply from Income tax department about   issue   of   share   capital   at   high premium on

So    far    as    the    observation    in paragraph  2  (f)  of  the  Report  of  the Regional  Director  is  concerned,  the Learned  Counsel  for  the  Petitioner Companies     submits     that     the Petitioner   Company   the   Securities Premium Account was raised by the Transferor      Company      as      on

07/02/2004 and that thereafter the

income     Tax     Department     had assessed    the    increase    of    share capital  u/s  68  of  the  Income  Tax Department

2(g)

It    is    observed    from    the    portal    that Transferor   Company   has   not   fled   its Annual  return  for  the  year  2020-21  and 2021-2022 anil Balance Sheet for the year 2018-19,2019-20,    2020-21    and    2021-

2022, however, along with the documents provided    to    this    Directorate,    Audited financials account for the year 2021-2022 has   been   provided,   therefore,   petitioner company  may  be  directed  to  clarify  the compliance of provisions of Companies Act, 2013  and  may  also  be  directed  to  file pending   Annual   returns   and   Balance Sheets before sanctioning of the scheme so that   no   regulatory   authority   including Income     Tax     Department     shall     face ambiguity     in     absence     of     financial statements  &  Annual  returns,  which  are required  to  be  filed  on  MCA-21  portal  in compliance of Provisions of Companies Act,

2013.   Transferee   Company   shall   also

undertake   that   the   transferee   company shall      file       compounding/adjudication application before ROC.

So    far    as    the    observation    in paragraph 2 (g) of the Report of the Regional  Director  is  concerned,  the Learned  Counsel  for  the  Petitioner Companies     submits     that     the Petitioner  Company  they  have  filed the with the Income Tax Department for  the  year  2018-19,  2019-20  and 2021-22.     Annexed     hereto     and marked  as  Exhibit  1  colly  are  the acknowledgement    copies    of    the Income     Tax     Submissions.     The Petitioner       Companies       further submits  that  they  undertake  to  file the same as and when the Version 3 of  the  MCA  portal  is  updated.  The Petitioner  Company  further  submits that the Transferee Company further undertake    to    file    compounding/adjudication application before ROC, Mumbai if required.

2(h)

It    is    observed    from    latest    Audited financials for the year ending  31.03.2022 provided  by  the  Transferor  company  that transferor      company      has      following corporate  body  shareholders  having  more than  10%  shareholding,  but  form  Ben-2 has not been filed:-

So    far    as    the    observation    in paragraph 2 (h) of the Report of the Regional  Director  is  concerned,  the Learned  Counsel  for  the  Petitioner Companies     submits     that     the Petitioner  Company  they  have  not filed    the    BEN-2    form    due    to migration   of   MCA   website   from Version 2 to version 3 and that they further undertake that the ROC may adjudicate  the  Petitioner  Company for non-filling of BEN-2.

Name   of   the Company

Name

of     the shareho lders

Perce ntage of shar ehold ing

Status of  Ben- 2

Windmere Hospitality (India0 Private Limited (Transferor Company)

Blue Zephyre Ltd.-

U.A.E

100%

Not filed

Therefore,   petitioner   company   may   be directed  to  clarify  and  comply  with  the same    as    required    u/s.    90    of    the Companies   Act,   2013   r.w.   companies (Significant    Beneficial    Owners)    Rules, 2018.

2(i)

That  on  examination  of  the  report  of  the

Registrar   of   Companies,   Mumbai   dated

07.09.2022  (Annexed  as  Annexure  A-1)) that   all   the   Petitioner   Companies   fall within  the  jurisdiction of  ROC, Mumbai.  It is  submitted  that  no  complaint  and  /or representation    regarding    the    proposed scheme    of    Amalgamation    has    been received against the Petitioner Companies. Further,   the   petitioner   companies   have filed      Financial      Statements      up      to 31.03.2018 and Transferee Company has filed  till  31.02.2022,  further  observations in ROC report are as under:-

i.         That the ROC Mumbai in his report dated  07.12.2022  has  stated  that no  Inquiry,  inspection,  investigation &  prosecution  is  pending  against the subject applicant companies.

ii.        Interest   of    Creditors    should    be protected.

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, it 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.

iv.       May be decided on its merits.

So    far    as    the    observation    in

paragraph 2(i)(i) of the Report of the Regional  Director  is  concerned,  the Learned  Counsel  for  the  Petitioner Companies  submits  that  it  is  the facts of the case.

So    far    as    the    observation    in paragraph 2 (i)(ii) of the Report of the Regional  Director  is  concerned,  the Learned  Counsel  for  the  Petitioner Companies submits that the interest of creditors will be protected.

So    far    as    the    observation    in paragraph  2  (i)(iii)  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 Authorised  Share  Capital  shall  be accordance     with     provisions     of section  232(3)(i)  of  the  Companies Act, 2013

The observations made by the Regional Director have been explained by the Petitioner Companies in Para 9 above. Ms. Rupa Sutar, Authorised representative of the Regional Director, MCA (WR), Mumbai, who was present at the time of Final hearing has submitted that the clarifications, submissions and undertakings given by the Petitioner Companies are hereby accepted and that they have no objection for approving the scheme by the Tribunal.

The Official Liquidator has filed his report on 30th January, 2023 in the Company Scheme Petition No. 07 of 2023, 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 Companies and that the Transferor Company may be ordered to be dissolved by this Tribunal.

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, Company Scheme Petition No. 07 of 2023 is made absolute in terms of clauses (a) to (c) of the said Company Scheme Petition

The First Petitioner Company be dissolved without winding up.

Petitioners are directed to file a copy of this Order along with a copy of the Scheme of Amalgamation with the concerned Registrar of Companies, electronically along with E-Form INC-28, in addition to physical copy within 30 days from the date of receipt of the Order from the Registry.

The Petitioner Companies to lodge a copy of this Order and the Scheme duly authenticated by the Deputy Registrar or Assistant Registrar, National Company Law Tribunal, Mumbai Bench, with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty payable within 60 days from the date of receipt of the Order, if any.

All authorities concerned to act on a copy of this Order along with Scheme duly authenticated by the Deputy Director or Assistant Registrar, National Company Law Tribunal, Mumbai.

The Appointed Date is 1st April, 2021.

Ordered Accordingly.