Dinero Propbuild Private Limited Vs

Rahul Bhatnagar, Member (Technical)

This application has been filed by the Applicant Companies under Sections 230 to 232 of the Companies Act, 2013, read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, and the National Company Law Tribunal Rules, 2016, for the purpose of the approval of the Scheme of Amalgamation proposed between the Applicants. The copy of the Scheme of Amalgamation (hereinafter referred as the “Scheme”), has been placed on record.

The Applicant Company No. 1/Transferor Company No. 1 was incorporated under the Companies Act, 1956 on 26.06.2006 having CIN U710109DL2006PTC150280. The authorized share capital is Rs. 5,00,000/- while issued, subscribed and paid up share capital is Rs.3,00,000 divided into 30,000 equity shares of Rs. 10/- each.

The Applicant No. 2 /Transferor Company was incorporated under the Companies Act, 1956 on 19.03.2004 having CIN U70101 DL2004PTC125309. The present authorized share capital of the Company is Rs. 2,00,00,000/- divided into 20,00,000 equity shares of Rs. 10/- each while its issued, subscribed and paid up capital is Rs. 1,40,60,000/- divided into 14,60,000 equity shares of Rs. 10/- each.

The Applicant No.3 /Transferor Company was incorporated under the Act on 01.02.2006 having CIN U74920DL2006PTC145685. Its present authorized share capital Rs. 15,00,000/- divided into 1,50,000 equity shares of Rs. 10/- each while its issued, subscribed and paid up capital is 10,50,000/- divided into 1,05,000 equity shares of Rs. 10/ - each.

The Applicant No.4/Transferor Company was incorporated under the Act on 30.04.1998 having CIN U29120DL1998 PTC093536. Its present authorized share capital Rs. 10,00,000/- divided into 1,00,000 equity shares of. Rs. 10/- each while its issued, subscribed and paid up capital is 10,00,000/- divided into 1,00,000 equity shares of Rs. 10/ - each.

The Applicant No.5/Transferor Company was incorporated under the Act on 01.05.2006 having CIN U70101DL2006PTC148525. Its present authorized share capital Rs. 5,00,000/- divided into 50,000 equity shares of Rs. 10/- each while its issued, subscribed and paid up capital is 2,75,000/- divided into 27,500 equity shares of Rs. 10/ - each.

The Applicant No.6/Transferor Company was incorporated under the Act on 05.10.2005 having CIN U67120DL2005PTC334657. Its present authorized share capital Rs. 75,00,000/- divided into 7,50,000 equity shares of Rs. 10/- each while its issued, subscribed and paid up capital is 58,70,000/- divided into 5,87,000 equity shares of Rs. 10/ - each.

The Transferee Company was incorporated' under the Act on 03.03.2004 having CIN U70101DL2004PTC124970. Its present authorized share capital Rs. 2,50,00,000/- divided into 25,00,000 equity shares of Rs. 10/- each while its issued, subscribed and paid up capital is 2,09,20,000/- divided into 20,90,000 equity shares of Rs. 10/ - each.

From the records, it is seen that the First Motion application was filed before this Tribunal vide C.A.(CAA)/108/(ND)2020. Vide order dated 11.11.2020, the meeting of Equity Shareholders of all the Companies except Transferor Company No. 3 and Unsecured Creditors of all the Companies was dispensed with. There were nil Secured Creditors of all the Companies; therefore, the necessity of convening/dispensing a meeting did not arise. The meeting of Equity Shareholders of the Transferor Company No. 3 was directed to be held. The Chairperson’s Report dated 30.01.2021 w.r.t the meeting of Equity Shareholders of the Transferor Company No. 3 has been filed wherein it has been stated that no votes were cast against the scheme.

The Applicant Companies were directed to carry out publication in the newspapers. It is seen from the records that the petitioners have filed an Affidavit affirming compliance and disclosing that the applicants have effected publication in ‘Business Standard’ English edition as well as Hindi edition, both dated 15.03.2021. In addition to the public notice, notices were served on to the Regional Director (Northern Region), Registrar of Companies, NCT of Delhi and Haryana, Official Liquidator, the Income Tax Department and to the other relevant sectoral regulators.

Pursuant to the notice issued to the Regional Director, RoC, and Official Liquidator, they have filed their response/reply in the matter.

In daily order dated 11.05.2023, it was noted as follows: “various issues raised by the RD with respect to the matter related to the redemption of debentures of one of the Transferor Companies. Ld. Counsel for the RD has submitted that these debentures would be redeemable in the year 2025 and since the merger is going to take place before that, the Transferor Company will not be in existence at that time. Therefore, there should be a very clear provision with respect to the redemption of the debentures. She has also submitted that since there is no provision in the Company Act to make prospective provision for redemption of shares in another company the merger should take place only after the Transferor Company has redeemed its debentures.”

In response to the above observation by the Regional Director, the Transferee Company has filed an affidavit stating as follows:

i. That the Transferor Company No. 1 (Dinero Propbuild Private Limited) had issued 0% Optionally Convertible Debentures amounting to Rs. 3,11,50,000/- during the FY 2015-16, having maturity in 10th year of allotment. Further the Transferor Company has issued the aforesaid debentures to Transferee Company only i.e. Him Realty Private Limited, meaning thereby that the Transferee Company is the holder and beneficiaries of the Debentures issued by the Transferor Company No. 1.

ii. That Clause 4.2 of the scheme clearly mentions that the all the debentures, bonds or other debt securities etc issued by the Transferor Company shall become the liability of the Transferee Company.

iii. That the Transferor Company has issued the debentures only to the Transferee Company, which in terms of the clause 4.2 of the Scheme will become the liability/debt of the Transferee Company and consequent to merger, liability of the transferor company shall cease to exit. Further in terms of the Para 15 (c) of the Scheme inter-company balances if any shall stand cancelled. Therefore, post the amalgamation the debentures issued by the Transferor Company shall cease to exist and consequently there will be no liability qua debentures issued which also dispense with requirement of creating reserve for redemption.

The Applicant Companies have duly replied to the observation of the Regional Director. Therefore, we are satisfied with the reply of the Applicant Companies to the objections of the Regional Director.

The Official Liquidator has filed its report dated 12.07.2021 wherein no specific objection has been raised against the approval of the Scheme. It is submitted in the report that the affairs of the Transferor Companies do not appear to have been conducted in a manner prejudicial to the interest of its members or to public interest.

The Income Tax Department was set ex-parte vide order dated 21.02.2023. However, the Transferee Company has filed an affidavit dated 16.10.2021 undertaking that the Transferee Company shall pay the Income Tax dues of the Transferor Companies, if any.

In this petition it has also been affirmed that no proceeding for inspection, inquiry or investigation under the provisions of the Companies Act, 2013 or under provisions of Companies Act, 1956 is pending against the Petitioner Companies.

Certificate of the Statutory auditor of the Petitioner Companies has been placed on record to the effect that Accounting Treatment proposed in the Scheme of Amalgamation is in conformity with the Accounting Standard notified by the Central Government as specified under the provisions of Section 133 of the Companies Act, 2013.

The shareholders of the applicant companies are the best judges of their interest, fully conversant with market trends, and therefore, their decision should not be interfered with by Tribunal for the reason that it is not a part of judicial function to examine entrepreneurial activities and their commercial decisions. It is well settled that the Tribunal evaluating the Scheme, of which sanction is sought under Section 230-232 of the Companies Act of 2013, will not ordinarily interfere with the corporate decisions of companies approved by shareholders and creditors.

i. It has also been affirmed in the petition that the Scheme is in the interest of the Transferor Companies and the Transferee Company, including their shareholders, creditors, employees and all concerned.

ii. In view of the foregoing, upon considering the approval accorded by the members and creditors of the Petitioner Companies to the proposed Scheme, and the affidavits filed by the Regional Director, Northern Region, Ministry of Corporate Affairs and the report of official liquidator, there appears to be no impediment in sanctioning the present Scheme.

A. Consequently, sanction is hereby granted to the Scheme under Section 230 to 232 of the Companies Act, 2013.

B. The Petitioners shall however remain bound to comply with the statutory requirements in accordance with law.

C. Notwithstanding the above, if there is any deficiency found or, violation committed, qua any enactment, statutory rule or regulation, the sanction granted by this court to the scheme will not come in the way of action being taken, albeit in accordance with law, against the concerned persons, directors and officials of the petitioners.

D. While approving the Scheme as above, we further clarify that this order should not be construed as an order in any way granting exemption from payment of stamp duty, taxes or any other charges, if any, and payment in accordance with law or in respect to any permission/compliance with any other requirement which may be specifically required under any law.

E. THIS TRIBUNAL DO FURTHER ORDER:

That the Transferor Companies shall stand dissolved without following the process of winding-up; and

That all the property, rights and powers of the Transferor Companies, be transferred without further act or deed, to the Transferee Company and accordingly the same shall, pursuant to Section 232 of the Companies Act, 2013, be transferred to and vest in the Transferee Company.

That all the liabilities and duties of the Transferor Companies, be transferred without further act or deed, to the Transferee Company and accordingly the same shall, pursuant to Section 232 of the Act, be transferred to and become the liabilities and duties of the Transferee Company; and

That all proceedings now pending by or against the Transferor Companies, be continued by or against the Transferee Company; and

That all the employees of the Transferor Companies in service, on the date immediately preceding the date on which the scheme takes effect, i.e. the effective date, shall become the employees of the Transferee Company on such date, without any break or interruption in service and upon terms and condition not less favorable than those subsisting in the concerned Transferor Company on the said date.

That Petitioner companies shall, within thirty days of the date of the receipt of this order, cause a certified copy of this order to be delivered to the Registrar of Companies for registration and on such certified copy being so delivered, the Transferor Companies shall be dissolved and the Registrar of Companies shall place all documents relating to the Transferor Companies registered with him on the file, kept by him in relation to the Transferee Company and the files relating to all the petitioner companies shall be consolidated accordingly; and

That any person interested shall be at liberty to apply to the Tribunal in the above matter for any directions that may be necessary.

The petition stands disposed off on the above terms.

Let copy of the order be served to the parties.