Campus Sales Private Limited Vs

Balraj Joshi, Member (Technical)

This Court convened through video conferencing.

The instant petition has been filed under Section 230(6), read with Section 232(3) of the Companies Act, 2013 (“Act”), for sanction of the Scheme of Amalgamation of M/S. CAMPUS SALES PRIVATE LIMITED (hereinafter referred to as the “Transferor Company No. 1 or Petitioner Company 1”), M/S. AXEL COMMOSALES PRIVATE LIMITED (hereinafter referred to as the “Transferor Company No. 2 or Petitioner Company 2”), M/S. VANANCHAL VYAPAAR PRIVATE LIMITED (hereinafter referred to as the “Transferor Company No. 3”) With M/S. JAIN ABHUSHAN PRIVATE LIMITED (hereinafter referred to as the “Transferee Company”) whereby and whereunder the Transferor Companies are proposed to be amalgamated with the Transferee Company from the Appointed Date, viz 1st April, 2020 in the manner and on the terms and conditions stated in the said Scheme of Amalgamation (“Scheme”). The transferor company 3 and the Transferee companies are non -applicants in the petition as the registered offices of these companies fall in the jurisdiction of NCLT – Delhi Bench.

The Petition has now come up for final hearing. Counsel for the Petitioner submits as follows:

(a) The Scheme was approved unanimously by the respective Board of Directors of the Transferor Company 1 and the Transferor Company 2 (hereinafter referred as Petitioner Companies) at the meetings held on 15th December, 2020. (Page 96-99 in Annexure -3 and Page 136-139 in Annexure-6)

(b) The circumstances which justify and/or have necessitated the Scheme and the benefits of the same are, inter alia, as follows:-

i. The proposed amalgamation of the Transferor Company with the Transferee Company in accordance with the Scheme would enable the Amalgamating Companies to realize benefits of greater synergies between their business and avail of the financial resources as well as the managerial, technical, distribution and marketing resources of each other in the interest of maximizing the shareholders’ and stakeholders’ value;

ii. The proposed amalgamation shall ensure a streamlined group structure by reducing the number of legal entities in the group structure which will significantly reduce multiplicity of legal and regulatory compliance requirements and costs and will enhance the business oversight and eliminate duplicative communication and co-ordination efforts across multiple entities;

iii. Realization of benefits of greater synergies and economies of scale for the businesses of the Transferee Company, yielding beneficial results and pooling and optimal utilization of financial resources as well as managerial, technical, distribution and marketing resources of each other in the interest of maximizing value to their shareholders and other stakeholders. It will further enable greater efficiency in cash management and unfettered access to cash flow generated by the combined businesses, which can be deployed more efficiently for better debt management;

iv. Simplification of management structure, better administration and reduction in administrative and operational costs over a period of time, standardization and simplification of business processes, better utilization of common facilities, sharing of best practices and cross functional learning, the elimination of duplication and multiplicity of compliance requirements and rationalization of administrative expenses;

v. The proposed amalgamation also aims to enable better tax planning at a combined level and also assist in leveraging resources of the overall downstream combined entity;

vi. The amalgamation shall aid in reducing time and efforts for consolidation of financials at the group level; and

vii. Further, the proposed amalgamation aims to create value for stakeholders including respective shareholders, customers, lenders and employees.

(c) The Statutory Auditors of the Petitioner Companies have by their certificate dated 25th May, 2021 confirmed that the accounting treatment in the Scheme is in conformity with the accounting standards prescribed under Section 133 of the Companies Act, 2013. (Page 289-290 in Annexure -15)

(d) No proceedings are pending under Sections 210 to 227 of the Companies Act, 2013 against the Petitioner Companies.

(e) By order dated 3rd November, 2021 and Corrigendum Order dated 24th November, 2021 in Company Application (CAA) No. 152 / KB / 2021, this Tribunal has dispensed with the meetings of the Equity Shareholders and Unsecured Creditors of the Petitioner Companies in view of the fact that all such shareholders and and Unsecured Creditors have already given their consent to the Scheme by way of affidavits. Secured Creditors Meeting dispensed as there are NIL Secured Creditors of Petitioner Companies. Further, by the said orders, notices were directed to be served under Section 230(5) of the Act on the Statutory / Sectoral Authorities and leave was given to the Petitioner Company to file the petition for sanction of the Scheme. The Petitioner Company has duly sent the said notices on 26th November, 2021 and filed an affidavit of service on proving the same. (Page 306-313 in Annexure -19)

(f) Consequently, the Petitioner Company presented the instant petition for sanction of the Scheme. By an order dated 28th January, 2022, the instant petition was admitted by this Tribunal and fixed for hearing on 11th March, 2022 upon issuance of further notices to the Statutory Authorities and advertisement of date of hearing. In compliance with the said order dated 28th January, 2022, the Petitioner Companies have duly served such notices on the Regional Director (Eastern Region), Ministry of Corporate Affairs, Kolkata; Registrar of Companies, West Bengal; and Income Tax Department on 3rd February, 2022. The Petitioner Company have also published such advertisements once each in the English daily newspaper namely “Financial Express” and Bengali daily newspaper namely “Aajkal” on 13th February, 2022. An affidavit of compliance in this regard has also been filed by the Petitioner Company on 04th March, 2022.

(g) All statutory requirements for obtaining sanction of the Scheme have been duly complied with by the Petitioner Companies. 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, Ministry of Corporate Affairs, Kolkata (“RD”) has filed their representations before this Tribunal.

The Official Liquidator has filed his report dated 19th September, 2022 and concluded as under:-

“9. That the Official Liquidator has not received any complaint against the proposed Scheme of Amalgamation from any person/party interested in the Scheme in any manner till the date of filing of this Report.…

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.”

The RD has filed his reply affidavit dated 05th August, 2022 (“RD Affidavit”) which has been dealt with by the Petitioner Company by their Rejoinder dated 13th September, 2022 (“Rejoinder”). The observations of the RD and responses of the Petitioner Companies are summarized as under: -

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

“The Transferor Company, Campus Sales Private Limited did not yet file Annual return for the Financial Year 31/03/2021.”

Paragraph No. 3 of the rejoinder:

With reference to paragraph No. 2 (b) of the said reply dated 13th September, 2022, it is humbly submitted that the Annual Return for the Financial Year 31/03/2021 has been filed on 15.02.2022. A copy of AOC-4 annexed in Rejoinder as Annexure-1.

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

“The Petitioner Companies Should have directed to provide list/details of Asset to be transferred from the Transferor Companies to the Transferee Company upon sanctioning of the Scheme”

Paragraph No. 4 of the Rejoinder:

With reference to paragraph No. 2 (c) of the said reply dated 13th September, 2022, the list of Assets transferred from the Transferor Companies to Transferee Company annexed in the Rejoinder as Annexure-2.

c) Paragraph no. 2(d) of the RD Affidavit:

“That the Petitioner Companies should undertake to comply with the provisions of section 232(3)(i) of the Companies Act, 2013 through appropriate affirmation.”

Paragraph No. 5 of the Rejoinder:

With reference to paragraph No. 2 (d) of the said reply dated 13th September, 2022, I do hereby undertake that the Petitioner Companies will comply with the provision of section 232(3)(i) of the Companies Act, 2013.

d) Paragraph No. 2(e) of the RD Affidavit:

“That the Transferee Company should be directed to pay applicable stamp duty on the transfer of the immovable properties from the Transferor Companies to it.”

Paragraph no. 6 of the Rejoinder:

With reference to paragraph No. 2 (e) of the said reply dated 13th September, 2022, I do hereby undertake that the Transferee Company shall pay Stamp duty if applicable, on the transfer of immovable properties from the Transferor Companies to it.

e) Paragraph No. 2(f) of the RD Affidavit:

“The Hon’ble tribunal may kindly direct the petitioners to file an affidavit to the extent that the Scheme enclosed to the Company Application and Company Petition are one and same and there is no discrepancy or no change is made.”

Paragraph No. 7 of the Rejoinder:

With reference to paragraph No. 2 (f) of the said reply dated 13th September, 2022, Petitioner Companies undertake that the scheme enclosed to the Company Application and Company Petition is one and same and there is no discrepancy or no change is made.

f) Paragraph No. 2(g) of the RD Affidavit:

“It is submitted that the Income Tax department vide its letter no ITBA/COM/F/17/2021-22/1039709141(1)/257 dated 14/02/2022 stated that one outstanding demand of Rs. 1000 is pending for A.Y 2018-2019 against the Transferor Company, Axel Commosales Private Limited”

Paragraph No. 8 of the Rejoinder:

With reference to the paragraph No. 2(g) of the said reply dated 13th September, 2022, It is submitted that the the demand raised by the Income Tax Department vide its letter no ITBA/COM/F/17/2021-22/1039709141(1)/257 dated 14/02/2022 for Axel Commosales Private Limited (Transferor Company 2) has been paid on dated 12/07/2022. A copy of Challan receipt is annexed as Annexure-3 in rejoinder.

Heard submissions made by the Ld. Counsel appearing for the Petitioner Companies and the Joint director who represents RD(ER), MCA. 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 Scheme of Amalgamation mentioned in the Petition being Annexure “1” thereto is hereby sanctioned by this Tribunal with the Appointed date fixed as 1st April, 2020 (“Appointed Date”) and shall be binding on M/S. CAMPUS SALES PRIVATE LIMITED (hereinafter referred to as the “Transferor Company No. 1”), M/S. AXEL COMMOSALES PRIVATE LIMITED (hereinafter referred to as the “Transferor Company No. 2”), M/S. VANANCHAL VYAPAAR PRIVATE LIMITED (hereinafter referred to as the “Transferor Company No. 3”) With JAIN ABHUSHAN PRIVATE LIMITED (hereinafter referred to as the “Transferee Company”) their respective shareholders and creditors and all concerned, subject to the requisite approval to the scheme by NCLT- Delhi in whose jurisdiction the Transferor company 3 and the Transferee companies fall.

b) All the properties, rights and interest of 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 Scheme;

c) All the debts, liabilities and duties of Transferor Companies be transferred without further act or deed to Transferee Company and accordingly the same shall pursuant to Section 232 of the Companies Act, 2013 read with Companies (Compromises, Arrangements and Amalgamation) Rules, 2016 be transferred to and become the liabilities and duties of Transferee Company.

d) The employees of the Transferor Companies shall be engaged by the transferee Company, as provided in clause 6 of Part II of the Scheme;

e) 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.

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

g) Leave is granted to the Petitioners to file the Schedule of Assets 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) The Transferor Companies and the Transferee Company shall each day within thirty days of the receipt of this order, cause a certified copy thereof to be delivered to the Registrar of Companies for registration and on such certified copies being so delivered, the Transferor Company shall be dissolved without winding up.

In case of any default, including any provisions of Income Tax in respect of transferor companies, the Income Tax Department, the ROC West Bengal and all others, statutory departments/authorities shall be at liberty to initiate appropriate proceedings against the transferee company and this sanction shall not come in the way of such authorities in taking any lawful action against the defaulting entities including the Transferee company, which after the sanction of the scheme by this tribunal is in any case shall be responsible for the liabilities/non-compliances of the transferor companies as well.

The Petitioner Companies 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, after verification, to the certified copy of the order.

Company Petition (CAA) No. 222/KB/2021 is disposed of accordingly

Urgent Certified copy of this order, if applied for, be supplied to the parties, upon compliance of all requisite formalities.