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Judgment
The sanction of this Tribunal is sought under the Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 (the Act) and the Rules made thereunder for the Scheme of Amalgamation (the Scheme) of Babani Investments and Trading Private Limited, Multi Satco Investments Private Limited with Moneymart Securities Private Limited and their respective shareholders and creditors.
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 said Scheme.
The learned counsel for the Petitioners submitted that the Petitioner Company No. 1 and Petitioner Company No. 2 are engaged in the business as an investment company and to invest the capital and other monies of companies and for that purpose to purchase or otherwise acquire, become interested in, deal in, invest in, hold, sell, mortgage, pledge, or otherwise. The Petitioner Company No.3 is a non-banking finance company (NBFC).
The Board of Directors of Petitioner Companies have approved the Scheme in their respective meetings held on 1st February, 2020. The Appointed date fixed under the Scheme is 1st April 2019.
The rationale for the scheme is as follows:
a. Achieving operational and management efficiency;
b. Consolidation and simplification of the group structure;
c. Enhancement of net worth of the combined business to capitalise on future growth potential;
d. Optimal utilisation of resources resulting into reduction in operational and compliance cost; and
e. Elimination of multiple entities in the group; which will eliminate duplication of administrative functions and reduction in the multiplicity of legal and regulatory compliances required at present to be carried out by the Transferor Companies and the Transferee Company.
The Company Petition is filed in consonance with Sections 230 to 232 of the Act along with the order dated 15th September, 2020 passed in C.A. (CAA) 1049/MB-I/2020 by this Tribunal.
The learned counsel for the Petitioner Companies stated that Petitioner Companies have complied with all the requirements as per directions of the Tribunal and have filed necessary Affidavits of compliance with the Tribunal. Moreover, the Petitioner Companies undertake to comply with all the statutory requirements, if any, as required under the Act, and the Rules made thereunder. The undertaking given by the Petitioner Companies is accepted.
The Regional Director (Western Region), Ministry of Corporate Affairs, Mumbai, has filed his Report dated 2nd February, 2021 inter alia stating therein the observations on the Scheme as stated in para IV (a) to (d) 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 02.02.2021
Response of the Petitioner Companies
(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 Standard such as AS-5(IND AS-8) etc.
With reference to the observation in paragraph IV(a) of the report of the Regional Director, Mumbai is concerned, it is stated and undertaken for and on behalf of the Petitioner Companies that the Petitioner Companies will pass such accounting entries which are necessary in connection with the scheme to comply with other applicable Accounting Standard such as AS-5 (IND AS- 8), etc.
(b)
As per the Definition of the Scheme,
"Appointed Date" means the 1st day of April, 2019 or such other date as may be fixed or approved by the National Company Law Tribunal.
"Effective Date" means the last of the dates on which the certified copies of the orders sanctioning this Scheme, passed by the National Company Law Tribunal, at Mumbai, are filed with the Registrar of Companies, Mumbai by the Transferor Companies and the Transferee Company collectively. Any references in this Scheme to the date of coming into effect of this Scheme or upon the Scheme being effective shall mean the Effective date
Further, the Petitioners may be asked to comply with the requirement s and clarified vide circular no. F No. 7/12/2019/CL-1dated 21st August, 2019 issued by the Ministry of Corporate Affairs.
With reference to the observation in paragraph IV(b) of the report of the Regional Director, Mumbai is concerned, it is stated that the Petitioner Companies shall comply with the circular no. F. No. 7/12/2019/CL-1 dated 21st August, 2019 issued by the Ministry of Corporate Affairs. It is further stated that since the Scheme of Merger was approved on 1st February, 2020, the appointed date mentioned therein was 1st April, 2019 (i.e. start date of financial year).
(c)
Petitioner Company have to undertake to comply with Section 232(3)(i) of the Companies Act, 2013, where the transferor company is dissolved, the fee, if any, paid by the transferor company on its authorised capital subsequent to the amalgamation and therefore, petitioners to affirm that they comply the provisions of the section.
With reference to the observation in paragraph IV(c) of the report of the Regional Director, Mumbai is concerned, it is stated that the Petitioner Company undertakes to comply with Section 232(3) of the Companies Act, 2013, where the Transferor Company is dissolved, the fee, if any, paid by the Transferor Company on its authorized capital will be set-off against any fees payable by the transferee company on its authorized capital subsequent to the amalgamation and therefore, the Petitioner Companies affirm and undertake that they will comply with the provisions of the section.
(d)
ROC, Mumbai Report dated 19th January, 2021 has inter alia mentioned that there are no prosecution, no technical scrutiny, no inquiry, no inspection, no complaint are pending.
Further mentioned that:-
1) As per para 4.5 of the Scheme, as per master data the authorized and paid up capital of the company is Rs. 15,00,00,000/- and Rs. 10,33,42,990/- respectively which does not agree with the scheme.
The Company has mentioned the following in the scheme:-
Para. 4.5 - as on 31st March, 2019 (Moneymart Securities Private Limited- Transferee Company) Authorized Share Capital -Rs. 15,00,00,000/- Paid Up Share Capital- Rs. 9,01,81,500/-
Para 4.6- as on 1st February, 2020 (date of approved scheme)
Authorized Share Capital - Rs. 15,00,00,000/-
Paid Up Share Capital - Rs. 9,98,30,240/-
Applicant has also mentioned in the scheme that "since the date of approved of the scheme by the BoD of MSPL, there is no changes in authorized, issued, subscribed and paid up share capital of MSPL.
It has been noticed from the MCA21 records that the Transferee Company, MSPL has filed & PAS-3 E-forms, which has been approved.
Details are as follows:-
SRN- R41137068
Date of passing shareholders resolution - 16.03.2020
Date of allotment- 09.05.2020
Name and address of allottee
No. of equity shares
FV of shares
Premium
Consideration
EN Resourcs LLC 984, Kafy FWY, 925, Housto, Texas, 77024
1,75,153
10
97
1,87,41,391
SRN- R44318665
Date of passing shareholders resolution - 16.03.2020
Date of allotment- 15.06.2020
Name and address of allottee
No. of equity shares
FV of shares
Premium
Consideration
EN Resourcs LLC 984, Kafy FWY, 925, Houstn, Texas, 77024.
1,76,122
10
97
1,88,45,054
2) Interest of the creditors shall be protected.
In light of the above and ROC's observations the applicant may be asked to submit the correct picture of the transferee company's capital structure.
Also, the latest allotment was done to body corporate outside India. Hence, company shall comply with applicable RBI and FEMA guidelines/rules.
As far as observations made in paragraph IV (d) (1) of the report of the Regional Director, Mumbai is concerned, I submit that during the financial year 2020-21, the Transferee Company had made 2 allotments and that the Transferee Company has done requisite efiling for allotment of shares with the Registrar of Companies, Mumbai and e-filing of Form FCGPR with the Reserve Bank of India as per FEMA Regulations
As far as observations made in paragraph IV (d) (2) of the report of the Regional Director, Mumbai is concerned, it is stated that the Petitioner Companies undertake that the interest of Creditors shall be protected.
The observations made by the Regional Director and the clarifications & undertakings given by the Petitioner Companies have been verified and accepted.
The Official Liquidator has filed his report on 23rd December, 2020 inter alia, stating therein that the affairs of the Transferor Companies have been conducted in a proper manner not prejudicial to the interest of the Shareholders of the Transferor Companies.
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) 1075/MB-I/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 April, 2019 placed at Page Nos. 221 to 248 (Exhibit - N) 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 Companies 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 Companies 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.