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Judgment
Shyam Babu Gautam, Member (Technical)
This Court is convened via video conferencing.
Heard Learned Counsel for Petitioner Companies. These Company Petitions were originally filed before the Hon’ble High Court of Bombay and subsequently transferred to this Hon’ble Tribunal on 7th January, 2017. No objector has come before the Tribunal to oppose the petition nor any party controverted any averments made in the petition.
This Petition seeks the sanction of the Tribunal under section 230 to 232 of the Companies Act, 2013 (‘the Act’) for the Scheme of Amalgamation and Arrangement between Bombay Gas Holdings and Investments Private Limited (“Transferor Company”) AND Excel Telesonic India Private Limited (“Transferee Company”) AND their respective Shareholders (‘Scheme’ or ‘the Scheme’).
The Learned Counsel for the) Petitioner Companies submits the following: -
a) Bombay Gas Holdings & Investments Private Limited, the First Petitioner Company is engaged in business for utilization and exploitation of the Gas Distribution Pipeline for multiple purposes;
b) Excel Telesonic India Private Limited, the Second Petitioner Company is engaged in business of providing internet service provider services, network operations centre services, private networking services and solutions and software development to all types of persons and businesses in India and abroad’
c) The First Petitioner and the Second Petitioner are both the subsidiaries of Bombay Gas Company Limited and 98% and 99% of shares in the First Petitioner and the Second Petitioner respectively are held by Bombay Gas Company Limited;
d) Rational of the Scheme:
The proposed amalgamation would be beneficial for the reasons as follows:
i) As stated above the First Petitioner and the Second Petitioner are both the subsidiaries of Bombay Gas Company Limited. The main business of the First Petitioner is to commercially exploit the Gas Pipeline of Bombay Gas Company Limited. The Second Petitioner was incorporated as Special Vehicle to lay optic fiber as it has an IP-1 license under TRAI regulation. On 24th January 2013 the First and the Second Petitioner have executed an Agreement under which the Second Petitioner has obtained rights to lay Optic Fiber Cable in the Gas Distribution Pipelines. Since both the Petitioner companies are running businesses which are the different arms of the same business, both the companies shall gain benefits from the proposed merger, mainly exploitation of the gas pipeline of Bombay Gas Company Limited.
ii) Considering the above, the amalgamation will enhance financial and growth prospects for the shareholders and organizations connected with the Petitioner Companies;
iii) Increase the asset base of the amalgamated entity;
iv) Optimal utilization of resources and greater revenue in flow.
The Petitioner Companies have approved the Scheme by passing Board Resolutions dated 20th March, 2015. The Board Resolution is attached as Exhibit A of the captioned Company Petitions.
The appointed date of Amalgamation of Bombay Gas Holding & Investments Private Limited, being the Transferor Company, with Excel Telesonic India Private Limited, being the Transferee Company, is April 1, 2020.
Learned Counsel for the Petitioner Companies states that the Company Petitions has been filed in consonance with the order dated 3rd July, 2015 passed by the Hon’ble High Court of Bombay in the Company Summons for Direction No. 526 of 2015 and 527 of 2015.
The Authorized, Issued, subscribed and Paid-up Share capital of the Transferor Company as on 31st March, 2022 is as under:
Share Capital
Amount in Rupees
Authorized Share Capital
1,000 Preferential Shares of Rs.10/- each
10,000
99,000 Equity Shares of Rs.10/- each
9,90,000
Total
10,00,000
Issued, Subscribed and Paid-up Share Capital
10,000 Equity Shares of Rs.10/- each, fully paid-up
1,00,000
Total
1,00,000
The Authorized, Issued, Subscribed and Paid-up share capital of the Transferee Company as on 31st March, 2022 is as under:
Share Capital
Amount in Rupees
Authorized Share Capital
Nil Preferential Shares of Rs. Nil each
Nil
7,50,000 Equity Shares of Rs.1/- each
7,50,000
Total
7,50,000
Issued, Subscribed and Paid-up Share Capital
5,05,401 Equity Shares of Rs.1/- each
5,05,401
Total
5,05,401
The Financial details/summary of the First Petitioner Company:
Sr. No.
Paid-up Share Capital
Revenue
Profit/(Loss)
2019
1,00,000
9,47,590
(85,330)
2020
1,00,000
9,16,407
2,49,844
2021
1,00,000
3,84,499
(1,47,25,612)
The Financial details/summary of the Second Petitioner Company:
Sr. No.
Paid-up Share Capital
Revenue
Profit/(Loss)
2019
5,05,401
15,14,06,752
(15,13,74.309)
2020
5,05,401
36,49,47,643
(12,92,42,259)
2021
5,05,401
51,34,74,381
(6,17,79,913)
The Learned Counsel for the Petitioner Companies states that the Petitioner Companies have complied with all requirements as per directions of this Hon’ble Tribunal and they have filed necessary affidavits of compliance with Hon’ble Tribunal. Moreover, Petitioner Companies undertake to comply with all statutory requirements, if any, as required under the Companies Act, 2013 and the Rules made thereunder. The said undertaking is accepted.
Dissolution of the Transferor Company:
Upon filing of the certified copies of order of Hon’ble NCLT sanctioning the scheme by the Transferor Company and the Transferee Company with the jurisdiction Registrar of Company, the Transferor Company shall stand dissolved without winding up.
Consideration for Amalgamation:
a. Upon the Scheme coming into effect and inconsideration for amalgamation of the Transferor Company into the Transferee Company in terms of this Scheme, the Transferee Company shall issue consideration for amalgamation, without any further application, act, instrument or deed, by way of issue and allotment, to the shareholders whose name appears in the register of members of the Transferor Company or to such of their respective heirs, executors, administrators or the successors in title, as the case may be recognized by the Board of Director of the Transferor Company, in the following ratio:
“10 (ten) Equity shares of Face value of Rs. 1 each, fully paid of up the Transferee Company for every 1 (one) Equity share of face value of Rs. 10 fully paid-up, held by the shareholder(s) in the Transferor Company”.
b. The equity shares to be issued to the respective shareholders of the Transferor Company as mentioned above shall be issued in demat form, subject to the Memorandum and Articles of Association of the Transferee Company and shall rank pari passu with the existing equity shares of the Transferee Company including with respect to dividends, bonus entitlement, right shares entitlement, voting rights and other corporate benefits;
c. Approval of this Scheme by the shareholders of the Transferee Company has been obtained by the Transferee Company and the Petitioners have agreed and undertaken to comply with the other relevant and applicable provisions of the Act, Rules and/or applicable provisions of any other law, regulations rules for the time being in force, for the issue and allotment of equity shares by the Transferee Company to the shareholders the Transferor Company, as provided in this Scheme.
The Regional Director (Western Region), Ministry of Corporate Affairs, Mumbai, has filed Report dated 27.06.2022 inter alia stating as under: -
Sr.
No.
Regional Director Report/ Observation Dated 27th June, 2022
Response from the Petitioner Companies filed vide Additional Affidavit dated 5th
July, 2022
1.
Paragraph 7: In light of Ministry’s
Circular dated 21st August, 2019, the Appointed Date i.e. 01.04.2019 is antedated as the same is more than three years which needs to be changed for fair
valuation.
In so far as the observation in
Paragraph No. 7 of the Report of the Regional Director is concerned, the Petitioner agrees to change the appointed date from 01.04.2019 to 01.04.2020.
2.
Paragraph 9: Company has not disclosed the name of the beneficial owner of Applicant Company in Compliance of Section 90 of the Companies Act, 2013.
In so far as the observation in Paragraph No. 9 of the Report of the Reginal Director is concerned, the Petitioner Companies undertakes to comply with Section 90 of the Companies Act, 2013 and applicable Accounting Standards, in implementing the scheme if and when applicable, after approval by this Hon’ble
Tribunal.
3.
Paragraph 10: To ensure that the interest of the creditors as the status of the creditors have changed since the filing of the Petition and to comply with Section 232 (3) (i) of the Companies Act, 2013 for payment of differential fees on
merger of Authorized capital.
In so far as the observation in Paragraph No. 10 of the Report of the Regional Director is concerned, the Petitioner Companies undertakes to comply with Section 232 (3) (i) of the Companies Act, 2013 for payment of differential fees on
merger of Authorized capital.
4.
Paragraph 7: On perusal of latest financial statements of the Transferor Company for the year 2020-2021 it is observed that financial position including position of previous loses, creditors and liability has been changed which will affect the valuation of the shares and swap ration as mentioned in paragraph 5 of the scheme petition.
Since both Petitioners are subsidiaries of Bombay Gas Company Limited, the swap ratio will make no difference.
Thus, no fresh valuation is required.
The observations made by the Regional Director have been explained in Para 15 above along with the clarifications and undertakings given by the Petitioner Companies. The clarifications and undertakings given by the Petitioner Companies are hereby accepted by the Tribunal.
The Official Liquidator had filed his report dated 17.11.2015 when the matter was before the Hon’ble High Court of Bombay inter alia, stating therein that the affairs of the Transferor Company have been conducted in a proper manner and that the Transferor Company may be ordered to be dissolved without winding up by this Tribunal.
From the material on record, the Scheme appears to be fair and reasonable and so far not in violation of any provisions of law, nor contrary to public interest. Upon coming into effect, the consideration to be issued pursuant to the amalgamation of First Petitioner Company into Second Petitioner Company is, 10 (Ten) Equity Share of face value of Rs. 1/- (Rupee One Only) fully paid up of Second Petitioner Company, the Transferee Company for every 1 (One) Equity Share of face value of Rs. 10/- (Rupees Ten Only) full paid up, held by the shareholder(s) in First Petitioner Company, the Transferor Company.
Since all the requisite statutory compliances have been fulfilled TSCP Nos. 06 of 2017 and 07 of 2017 are made absolute in terms of prayer clause 33 of the said Company Petitions. Hence Ordered.
The Scheme is hereby sanctioned with the Appointed Date, i.e. of April 1, 2020 in respect of amalgamation of First Petitioner Company with the Second Petitioner Company.
The Petitioner Companies are directed to file a copy of this Order along with a copy of the Scheme 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 duly certified by the Deputy Registrar or Assistant Registrar, of the National Company Law Tribunal, Mumbai Bench.
The Petitioner Companies to lodge a copy of this Order and the Scheme duly certified by the Deputy Registrar of this Tribunal, with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty payable, if any, on the same within a period of 60 days from the date of receipt of the Order.
All concerned regulatory authorities to act on a copy of this Order along with Scheme duly certified by the Joint Registrar of this Tribunal.
Any person interested is at liberty to apply to this Tribunal in the above matters for any directions that may be necessary.
Any concerned authorities are at liberty to approach this Tribunal for any further clarification as may be necessary.
Ordered Accordingly.