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Judgment
Telaprolu Rajani, Member (J)
The present Company Application filed under Sections 230 to 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamation) Rules, 2016 by the Applicant Companies inter alia seeks an order to dispense with convening the meeting of the Equity Shareholders, Secured Creditors and Unsecured Creditors of both the Applicant Companies for consideration of the Scheme of Arrangement ("Scheme" for short) between the Applicant Companies and their respective shareholders and creditors as envisaged under the Scheme.
The Registered Offices of the Applicant Companies are situated in the State of Andhra Pradesh and therefore, they are within the jurisdiction of this Tribunal.
Brief facts leading to the filing of present case are as follows:
a) The Applicant/Demerged Company was incorporated as a Private Limited Company on 15.12.1971 under the name G.V. Rattaiah & Company Tobacco Exporters Private Limited. Subsequently, on 02.07.1996 the name of the Company was changed to Babu Tobacco Private Limited. The Authorised Share Capital as on 31.03.2020 was Rs.3,25,00,000/- divided into 3,25,000 equity shares of Rs.100/- each. The issued, subscribed and paid-up equity share capital is Rs. 1,28,12,500/- divided into 1,28,125 equity shares of Rs. 100/- each. The main objects of the Company are to buy, deal in and export all kinds of merchandise in general and unmanufactured India tobacco of all varieties in particular and to carry on the business of manufacturers of and dealers in tobacco and to deal in any other articles and things commonly dealt in by tobacco traders etc.
b) The Applicant/Resulting Company was incorporated as a Private Limited Company on 03.10.2020 and the Authorised Share Capital as on the date of incorporation was Rs. 15,00,000/- divided into 15,000 equity shares of Rs.100/- each. The issued, subscribed and paid-up equity share capital is Rs. 1,06,000/- divided into 1,060 equity shares of Rs.100/- each. The main objects of the Company are to construct, build, equip, own and maintain and to carry on business as keepers of cold storage, storage chambers, ice plants, godowns, warehouses, refrigerators, freezing houses and room coolers for storing all types of goods/commodities including agricultural commodities like chillies, paddy, tamarind, turmeric, sea foods, marine foods, poultry products etc.
According to the Applicant Companies, the Demerged Business and remaining business carried on by Demerged Company have significant potential for growth. The nature of risk and competition involved in each of these units are distinct from other and consequently Demerged Business and Remaining Business is capable of attracting a different set of business leaders, employees, investors, strategic partners, lenders and other stakeholders. The board of Directors of the Demerged Company felt that the Demerged business and remaining business should be bifurcated and should have independent entities for each undertaking. It is believed that the proposed segregation will create enhanced value for all stakeholders and allow a focused strategy in operations, which would be in the best interest of Demerged Company, all its stakeholders, creditors and all persons connected with Demerged Company. It will also provide scope for independent collaboration and expansion without committing the existing organization in its entirety.
It is further stated that the Board of Directors of the Applicant Companies in their respective Board Meetings held on 10.02.2021 have approved the Scheme of Arrangement with appointed date as 01.11.2020, subject to the approval of their shareholders and creditors.
It is stated that no investigation or proceedings have been instituted or are pending in relation to the Applicant Companies.
The Applicant Demerged Company has filed certificate of the Auditor stating that as on 10.02.2021 there are Five (5) Equity Shareholders together holding 1,28,125 equity shares and they have given their consent in the form of affidavits agreeing to the proposed Scheme. It also has filed certificate of the Auditor stating that there are no Secured Creditors as on 10.02.2021.
The Applicant/Demerged Company also has filed certificate of the Auditor stating that there are no Secured Creditors as on 10.02.2021.
The Applicant Demerged Company has filed certificate of the Auditor stating that as on 10.02.2021 there is a sole Unsecured Creditor i.e. M/s K. Ramamohana Rao & Co., having a debt of Rs.3,00,000/- and has given its consent in the form of affidavit agreeing to the proposed Scheme.
The Applicant/Resulting Company has filed certificate of the Auditor stating that as on 10.02.2021 there are Two (2) Equity Shareholders together holding 1,060 equity shares and they have given their consent in the form of affidavits agreeing to the proposed Scheme.
The Applicant/Resulting Company also has filed certificate of the Auditor stating that there are no Secured and Unsecured Creditors as on 10.02.2021.
Heard the submissions made in this regard by Shri Naresh Kumar Sangam, Learned Counsel appearing for the Applicant Companies and perused the documents filed.
It is noted that all the equity shareholders of both the Applicant Companies have given consent affidavits agreeing to the proposed Scheme of Amalgamation. Hence the meeting of the Equity Shareholders of both the Applicant Companies can be dispensed with, in terms of Section 230(9) of the Act.
It is also found that there are no Secured Creditors in the Demerged Company and there is no need to direct the Applicant Company to hold meeting of the Secured Creditors of the Demerged Company.
It is noted that a sole Unsecured Creditors has given consent affidavit agreeing to the proposed Scheme of Arrangement. Hence the meeting of the Unsecured Creditors of the Demerged Company can be dispensed with, in terms of Section 230(9) of the Act.
It is also found that there are no Secured and Unsecured Creditors in the Resulting Company and there is no need to direct the Applicant Company to hold meeting of the Secured and Unsecured creditors of the Resulting Company.
In compliance of sub section(5) of Section 230 of the Act and Rule 8 of the Companies (CAA) Rules, 2016, the applicant company shall send notice under sub section (3) of Section 230 read with Rule 6 of the Rules with a copy of the Scheme, the explanatory statement and the disclosures mentioned in Rule 6 to (a) the Central Government through the Regional Director, South Eastern Region; (b) the Registrar of Companies, Andhra Pradesh; (c) the Income Tax Authorities; and (d) the Official Liquidator. The said notices be sent either by Registered Post or by Speed Post or by Hand Delivery at the Offices of the authorities as required by sub rule (2) of Rule 8 of the Rules. The aforesaid authorities, who desire to make any representation under sub section (5) of section 230 shall send the same to this Tribunal within a period of 30 (thirty) days from the date of receipt of such notice, failing which it shall be deemed that they have no representation to make on the proposed Scheme.
In the event of the Applicant Companies approaching this Tribunal seeking approval of the Scheme, it would be open for any person who is interested in the Scheme to put forth his/their contention(s) before the Tribunal. Hence ordered.
ORDER
The Company Application i.e. CA(CAA) No.2/230/AMR/2021 is allowed and disposed of accordingly.