Bagaria Commercial Pvt. Ltd. & Ors Vs

Rajasekhar V. K. Member (Judicial)

The instant Petition has been filed under Section 230 read with Section 232 and other applicable provisions of the Companies Act, 2013 for sanction of the Scheme of Amalgamation (Scheme) of Bagaria Developers Private Limited (Transferor Company No. 1), Bagaria Overseas Ltd. (Transferor Company No. 2) and AHW Ispat Private Limited (Transferor Company No. 3) with Bagaria Commercial Private Limited (Transferee Company) whereby and whereunder the Transferor Companies is proposed to be amalgamated with the Transferee Company from the Appointed Date: i.e. 1st day of April, 2018 in the manner and on the terms and conditions stated in the said Scheme of Amalgamation.

The Petition has now come up for final hearing. The Ld. Authorised Representative for the Petitioners submits as follows:-

a) The Scheme was approved unanimously by the respective Board of Directors of the Transferor Companies and the Transferee Company at their meetings held on 28th  February, 2019 respectively.

b) The circumstances and/or reasons and/or grounds that have necessitated the said Scheme of Amalgamation and the benefits of the same, are inter-alia as follows:

(i) Emergence of a fully integrated single entity positioned to provide more extensive and integrated services.

(ii) Consolidation of the businesses presently being carried on by the Applicant/Amalgamating Companies and the Applicant/Amalgamated Company, which shall create greater synergies between the business operations of all the Companies;

(iii) Optimal utilisation of resources due to pooling of management, administrative and technical skills of various resources of all the companies, better administration, and cost reduction, including reduction in managerial, administrative and other common costs;

(iv) Better alignment, coordination and streamlining of day to day operations of all the Companies, leading to improvement in overall working culture and environment;

(v) Creation of a larger asset base and facilitating access to better financial resources; and

(vi) Creation of value for various stakeholders and shareholders of all the Petitioner/Amalgamated Company and Petitioners/Amalgamating Companies as a result of all of the foregoing.

(vii) To enable greater financial strength and flexibility for the amalgamated entity, which would result in maximizing overall shareholder value, and improve the economic and competitive position of the combined entity.

(viii) To enable better and efficient management, control and running of the businesses to attain operational efficiencies, cost competitiveness, create synergies and capitalize on the growth opportunities to the fullest extent.

(ix) To enable better financial, business and operational prospects including but not limited to, efficient management of costs, and improved administrative control of the Amalgamated Company.

(x) The Scheme shall be in the beneficial interest of the Companies concerned, their shareholders, employee and all concerned. Thus, amalgamation would be to the mutual advantage of both the Amalgamating and Amalgamated Companies. Since, all are engaged in same line of activities.

c) The Statutory Auditor of the Transferee Company, by way of their certificate, have confirmed that the accounting treatment in the Scheme is in conformity with the Accounting Standards prescribed under Section 133 of the Companies Act, 2013.

d) The exchange ratio of shares in consideration of the Amalgamation has been fixed on a fair and reasonable basis on the basis of the Valuation Report prepared by G.P. Agrawal & Co. Chartered Accountants.

e) By an Order dated 19th August, 2019 in the C.A. (CAA) No. 959/KB/2019, this Tribunal has dispensed with the convening and holding of the meeting of the Equity Shareholders and Creditors (Secured and/or Unsecured) of the Transferor Companies and the Transferee Company in view of written consent by way of affidavit given by all the Equity Shareholders and the Unsecured Creditors of the Petitioners.

f) Consequently, the Petitioners presented the instant Petition for sanction of the Scheme. By an Order dated 15th day of November, 2019 in C.P. (CAA) No. 1921/KB/2019 connected with C.A. (CAA) No. 959/KB/2019, the instant Petition was admitted by this Tribunal and fixed for hearing on 14th January, 2020 upon issuance of notices to the Statutory Authorities and advertisement of date of hearing. In compliance with the said Order dated 15th day of November, 2019, the Petitioners have duly served notices on the following Statutory Authorities dated 27th November, 2019 – 29th November, 2019.

(i) The Central Government, through the Regional Director, Eastern Region, Ministry of Corporate Affairs;

(ii) The Registrar of Companies, Kolkata;

(iii) The Official Liquidator having jurisdiction over the Petitioner Companies;

(iv) The concerned Assessing Officer along with the Chief Commissioner of Income Tax with PAN of the Petitioners;

(v) The Reserve Bank of India

(vi) The Competition Commission of India.

Further, the Petitioners have also published advertisements once in English newspaper “Business Standard” and another in Bengali newspaper “Aajkal” dated 19th day of December, 2019. An affidavit of compliance in this regard has also been filed by them on 03rd day of January, 2020.

g) All statutory formalities requisite for obtaining sanction of the Scheme has been duly complied with by the Petitioners. The Scheme has been made bona fide and is in the interest of all concerned.

Pursuant to the said advertisements and notices, the Regional Director, Eastern Region, Ministry of Corporate Affairs, Kolkata (“RD”), the Official Liquidator attached to the Hon’ble High court Calcutta and other Authorities and persons, as the case may be, have filed their representations before this Tribunal.

The Official Liquidator has filed its report dated 6th day of February, 2020 and concluded as under:

(i) That the Official Liquidator on the basis of information submitted by the Petitioner Companies is of the view that the affairs of the aforesaid Transferor Companies do not appear to have been conducted in a manner prejudicial to the interest of its members or to public interest as per the provisions of the Companies Act, 1956/the Companies Act, 2013 whichever is applicable.

(ii) That in view of the submission made above the Hon’ble National Company Law Tribunal may like to pass such order/orders as deemed fit and proper in the facts and circumstances of the case.

The Regional Director (“RD”) has filed his reply affidavit affirmed on 13th day of January 2020 (“RD affidavit”) which has been dealt with by the Petitioners by their

Rejoinder Affidavit dated 16th day of March, 2020 (“Rejoinder”) and 17th day of February, 2022 (“Supplementary Rejoinder”). The observations of the RD and reply of the Petitioner(s) are summarized as under:-

(a) Paragraph No. 2(b) of the RD affidavit:

It is submitted that M/s. Bagaria Overseas Limited, one of the Transferor Companies in the proposed scheme, did not file Form MGT-14 in respect of resolution passed in Board Meeting for approval of amalgamation, merger or reconstruction of companies as required under section 117(3)(g) read with section 179(3)(i) of the Companies Act, 2013. Once merged, the said Transferor Company will no longer be able to comply with any statutory requirement and the MCA portal, which is a public domain, shall continue to host the defective documents for public views and for insurance of certified copies for which the public have to bear cost (fees). The Hon’ble Tribunal may pursue the same and issue order as deem fit and proper.

Paragraph No. 4 of the Rejoinder:

With reference to paragraphs 2 (a) and (b) of the said affidavit I say that M/s Bagaria Overseas Limited, one of the Transferor Companies, have filed an application for condonation of delay for filing Form MGT-14 for approving the scheme of amalgamation along with the requisite fee therefor. However, no approval for filing the same has yet been received from the competent authority. The said transferor company undertakes to comply with all the statutory requirements that is necessary for filing of the said Form MGT 14. A copy of the receipt issued by the Ministry of Corporate Affairs evidencing the filing of the aforesaid application for condonation of delay is annexed hereto and marked "A".

Paragraph No. 6 of the Supplementary Rejoinder:

I say that M/s Bagaria Overseas Limited being one of the Transferor Companies has filed MGT 14 in respect of resolution passed in Board Meeting for approval of amalgamation, merger or reconstruction of companies as required under Section 117(3) read with Section 179(3)(1) of the Companies Act, 2013 is annexed hereto and marked with the Letter "SA-3".

(b) Paragraph No. 2(c) of the RD affidavit:

It is submitted that the Transferor Company, M/s Bagaria Overseas Limited, did not file Form MGT-14 in respect of any resolution under Section 179(3) of the Companies Act, 2013 for approval of the Financial Statement and Board's report for the financial year 31/03/2016, 31/03/2017, 31/03/2018 and 31/03/2019 which is a serious omission in statutory duties of the Company. The Company should file the said pending statutory documents with Registrar of Companies in prescribed manner before the merger, since once merged, the status of the Company in MCA portal would no more be ACTIVE and hence the Company would become free from the responsibility of filing the pending statutory documents. This would result in the MCA portal continuing with the contravening gap in filing beside loss of filing fee to the Government.

Paragraph No. 5 of the Rejoinder:

With reference to paragraph 2(c) of the said affidavit I say that for Transferor Company M/s Bagaria Overseas Limited Form MGT-14 has been filed in respect of Financial Year ending 31/03/2019. For the Financial Years 31/03/2016, 31/03/2017 and 31/03/2018 is unable to file MGT Form 14 since the website for filing the same is blocked and the same cannot be proceeded with. In such circumstances the said company has filed an application for condonation of delay for filing Form MGT-14 for approving scheme of amalgamation along with the requisite fee therefor. However, no approval for filing the same has yet been received from the competent authority. The said transferor company undertakes to comply with all the statutory requirements that is necessary for filing of the said Form MGT-14. A copy of the receipt issued by the Ministry of Corporate Affairs evidencing the filing of the aforesaid MGT Form 14 for the year 2019 and application for condonation of delay for the other years are annexed hereto and collectively marked "B"

Paragraph No. 7 of the Supplementary Rejoinder:

I say that Form MGT 14 along with INC-28 and CG-1 for Bagaria Overseas Limited being one of the Transferor Companies for the financial year 2016 - 2018, and Form MGT- 14 for the financial year 2019-2021 has been filed are collectively annexed hereto and marked with Letter "SA-4".

Heard submissions made by the Ld. Authorised Representative appearing for the Petitioners and the Joint Director, Office of the Regional Director, Eastern Region, Ministry of Corporate Affairs. Upon perusing the records and documents in the instant proceedings and considering the submissions, we allow the Petition and make the following orders:-

(a) The said Scheme of Amalgamation being “Annexure – A” to the Petition is sanctioned with the Appointed Date as 1st day of April, 2018 and the same shall be binding on Bagaria Developers Private Limited (Transferor Company No. 1), Bagaria Overseas Ltd. (Transferor Company No. 2) and AHW Ispat Private Limited (Transferor Company No. 3) with Bagaria Commercial Private Limited (Transferee Company) their respective Shareholders and Creditors and all concerned .

(b) With effect from the Appointed Date, all the properties, rights and powers of the Transferor Companies, including those described in the Schedule of Assets herein, be transferred from the said Appointed Date, without further act or deed to the Transferee Company and, accordingly, the same shall pursuant to Section 232(4) of the Companies Act, 2013, be transferred to and vest in the Transferee Company for all the estate and interest of the Transferor Companies therein but subject nevertheless to all charges now affecting the same, as provided in the said Scheme;

(c) With effect from the Appointed Date, all the debts, liabilities, duties and obligations of the Transferor Companies be transferred from the said Appointed Date, without further act or deed to the Transferee Company and, accordingly, the same shall pursuant to Section 232(4) of the Companies Act, 2013, be transferred to and become the debts, liabilities, duties and obligations of the Transferee Company;

(d) All proceedings and/or suits and/or appeals now pending by or against the Transferor Companies be continued by or against the Transferee Company, as provided in the Scheme;

(e) The employees of the Transferor Companies shall be engaged by the Transferee Company as provided in the Scheme;

(f) The Transferee Company without further application issue and allot to the shareholders of the Transferor Company, the shares in the Transferee Company to which they are entitled in terms of the Scheme.

(g) Leave is granted to the Transferor Companies to file the Schedule of Assets and Liabilities of the Transferor Companies in the form as prescribed in the Schedule to Form No.CAA7 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 within three weeks from the date of receiving a copy of this order;

(h) That the Transferor Companies and the Transferee Company shall each within 30 (Thirty) Days of the date of receipt of this Order cause a certified copy thereof to be delivered to the Registrar of Companies for registration and on such certified copy being so delivered, the Transferor Companies shall be dissolved , without winding up, with effect from the date or last of the dates of filing of the certified copies of the Order, as aforesaid (Effective Date) and the Registrar of Companies shall place all the documents relating to the Transferor Companies and registered with him on the file kept by him in relation to the Transferee Company and the files relating to the said Transferor Companies shall be consolidated accordingly.

The Petitioner(s) shall supply legible print out of the Scheme and schedule of assets and Liabilities in acceptable form to the Registry and the Registry will append such printout, upon verification to the certified copy of the order.

The Company Petition being C.P. (CAA) No.1921/KB/2019 is disposed of accordingly.

Urgent certified copy of the Order, if applied for, be supplied to the parties subject to the compliance with all requisite formalities.