Wings Biotech Limited And Ors vs Wings Pharmaceuticals Private Limited

B.S.V. Prakash Kumar, J

This joint petition has been filed by the petitioner companies under sections 230 and 232 of the Companies Act, 2013 read with the Companies (Compromise, Arrangement and Amalgamation) Rules, 2016 and the National Company Law Tribunal Rules, 2016, for the purpose of the approval of the Scheme of Amalgamation of all the three Petitioner Companies into Transferee Company.

The "Transferor Company No. 1" Wings Biotech Limited was incorporated on 05.12.2011, having its registered office at D-6, Udyog Nagar Industrial Area, Near Peeragarhi Metro Station Delhi-110041.

The "Transferor Company No. 2" Wings Plastics Private Limited was incorporated on 23.06.1994, having its registered office at 1706, 2nd Floor, Bhagirath Place Delhi-110006.

The "Transferor Company No. 3" Goverdhan Financial Services Limited was incorporated on 13.12.201993, having its registered office at H-17, Udyog Nagar Industrial Area, Near Peeragarhi Metro Station Delhi-110041.

The "Transferee Company" Wings Pharmaceuticals Private Limited was incorporated on 03.04.1987, having its registered office at J-13, Udyog Nagar, Industrial Area, Near Peeragarhi Chowk, New Delhi-110041.

A perusal of the petition discloses that initially the First Motion application No. CA(CAA)/34/PB/2018 seeking directions for convening/dispensation of the meeting of Equity Shareholders, Secured Creditors and Unsecured Creditors was filed before this Hon'ble NCLT. On 24.04.2018, the Hon'ble Tribunal vides its order dispensed with the requirement of convening of meetings of the Equity Shareholders based on the consent provided by the Equity Shareholders of all the four petitioner companies. Further, convening of meeting of Secured Creditors and Unsecured Creditors of all the four petitioner companies have also been dispensed with, due to consent having been provided which does not necessitate convening of such meetings.

Thereafter this second motion petition for sanctioning of the Scheme has been jointly filed by the petitioners before this Tribunal. On 11.07.2018 the Petitioners were directed to carry out publication in newspapers namely, "Business Standard" (English, Delhi edition) and "Business Standard" (Hindi, Delhi edition). In addition to the public notice, notices were directed to be served on to the Regional Director (Northern Region), Registrar of Companies, NCT of Delhi and Haryana, Official Liquidator, Income Tax Department and other sectoral regulators.

It is seen from the records that the Petitioners have filed an affidavit dated 14.08.2018 affirming compliance of the order passed by the Tribunal dated 11.07.2018. A perusal of the affidavit discloses that the petitioners have effected the newspaper publication as directed in one issue of "Business Standard" (English, Delhi edition) on 19.07.2018 as well as in "Business Standard" (Hindi, Delhi edition) on 19.07.2018 in relation to the date of Hearing of Petition. Further affidavit also discloses that copies of petition have been duly served to the Registrar of Companies, Regional Director, Northern Region, Official Liquidator and Income Tax Department in compliance of the order and in proof of the same acknowledgement made by the respective offices have also been placed on record.

The Regional Director has filed its representation dated 17.10.2018 in which it has been submitted that the Registrar of Companies have some observations, for which petitioners submitted its reply to RoC observations. These observations were regarding -

(i) Case is pending against Transferee Company u/s 233B of the Companies Act, 1956 before Hon'ble Court at Tis Hazari;

(ii) In Transferor Company No. 1 there has been a loss largely on account of expenditure over revenue earned;

(iii) In Transferor Company No. 1, regarding confirmation of sundry debtors/creditors/MSME and provisions of gratuity.

In response to aforementioned observations, petitioners filed its reply to Registrar of Companies, explaining regarding -

(i) That there was no such complaint that was pending before any Court. It was concerning the Financial Year 2013-14 for which the Compounding was duly made before Ld. Magistrate, Tis Hazari Court with Compounding fee deposited on 27.07.2017 and Form-INC-28 was also filed with your good office on 03.08.2017 vide SRN-G49656671;

(ii) The Company is engaged in Pharmaceuticals Marketing Business and has to compete with the MNC Pharmaceuticals Companies and to incur lot of expenditure to achieve the sales. And the expenditure mainly incurred on staff strength and their mainly marketing and field force salary, Travelling Exp, Reimbursement of staff, Business Promotion and other selling and administrative expenses which is incidental to running of such type of business;

(iii) a) The Company is engaged in Pharmaceuticals Marketing business and there has been a frequent change of staff during the years. On account of this there is no such employee who has rendered his services continuously for more than five years. So, the gratuity provisions are not applicable to them and accordingly none of them were paid any Gratuity as such. Therefore Gratuity Valuation in accordance with AS-15 is not required in this case.

b) Balance confirmations/affidavits along with their NoCs from Sundry Creditors have been enclosed with and part of first motion petition.

c) There are no Micro, Small and Medium Enterprises suppliers trading with Company which is registered under "The Micro, Small and Medium Enterprises Development Act, 2006". Hence there is no mention of such in financial reports.

The Regional Director has filed before this Tribunal its further representation/affidavit dated 03.12.2018, on the basis of supplementary report dated 28.11.2018 of Registrar of Companies in response to the petitioners' reply to RoC's observations; and found the reply received from the petitioner companies satisfactory.

The Official Liquidator has filed its report wherein no material objection has been raised by them in relation to the Scheme. It is submitted in the report that the Official Liquidator has not received any complaint against the proposed Scheme from any person/party interested in the Scheme in any manner and that the affairs of the transferor companies do not appear to have been conducted in a manner prejudicial to the interest of its members or to public interest.

The income Tax Department had recorded certain observations in relation to the Scheme which were adequately replied by the Petitioner. Although in order to protect the interest of the revenue it is made clear that there shall be no limitation on the power of the Income Tax Department for recovery of pending Income Tax dues if any from petitioner companies, including imposition of penalties etc. as provided in law.

In view of the foregoing, upon considering the approval accorded by the members and creditors of the Petitioner Companies to the proposed Scheme, and the affidavits filed by the Regional Director, Northern Region, Ministry of Corporate Affairs and the reports of official Liquidator and, there appears to be no impediment in sanctioning the present scheme. Consequently, sanction is hereby granted to the scheme under section 230 to 232 of the Companies Act, 2013. The Petitioners shall however remain bound to comply with the statutory requirements in accordance with law.

Notwithstanding the above, if there is any deficiency found or, violation committed qua any enactment, statutory rule or regulation, the sanction granted by this court to the scheme will not come in the way of action being taken, albeit, in accordance with law, against the concerned persons, directors and officials of the petitioners. While approving the Scheme as above, we further clarify that this order should not be construed as an order in any granting exemption from payment of stamp duty, taxes including income tax, GST etc or any other charges, if any, and payment in accordance with law or in respect of any permission/compliance with any other requirement which may be specifically required under any law.

THIS TRIBUNAL DO FURTHER ORDER(S):

(A) WITH RESPECT TO TRANSFEROR COMPANIES AND TRANSFEREE COMPANY

That the Transferor Companies stand dissolved without being wound up; and

That all the property, rights and powers of all the Transferor Companies be transferred without further act or deed, to the Transferee Company and accordingly the same shall pursuant to Section 232 of the Act, be transferred to and vest in the Transferee Company for all the estates and interests of the Transferor Companies therein but subject nevertheless to all charges now affecting the same; and

That all the liabilities and duties of the Transferor Companies be transferred without further act or deed, to Transferee Company and accordingly the same shall, pursuant to section 232 of the Act, be transferred to and become the liabilities and duties of the Transferee Company;

That all proceedings now pending by or against the Transferor Companies by continued by or against the Transferee Company;

That all the employees of the Transferor Companies in Service, if any, on the date immediately preceding the date on which the scheme takes effect, i.e. the effective date shall become the employees of the Transferee Company on such date without any break or interruption in service and upon terms and conditions not less favourable than those subsisting in concerned Transferor Companies on the said date.

That Petitioner Companies shall within thirty days of the date of the receipt of this order cause a certified copy of this order to be delivered to the Registrar of Companies for registration and on such certified copy being so delivered the Transferor Companies shall be dissolved and the Registrar of Companies shall place all documents relating to the Transferor Companies registered with him on the file kept by him in relation to the Transferee Company and the files relating to all the petitioner companies shall be consolidated accordingly.

Any person interested shall be at liberty to apply to the tribunal in the above matter for any directions that may be necessary. The petition stands disposed of in the above terms.