Girja Shankar Agrochem Private Limited vs Anurati Buildcon Private Limited

Ch. Mohd. Sharief Tariq, J

Under consideration is CAA- 13/ND/2018 filed under Sections 230 to 232 of the Companies Act, 2013 (hereinafter referred as "Act, 2013") r/w the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The present petition has been filed by the Petitioner Companies named above for the purpose of the approval of the Scheme of Amalgamation, as contemplated between the Companies and its Shareholders by way of Amalgamation of Transferor Company with the Transferee Company. As per the Scheme of Amalgamation (in short, 'Scheme'), "Girja Shankar Agrochem Private Limited" (hereinafter referred to as 'Transferor Company') is proposed to be merged with "Anurati Buildcon Private Limited" (hereinafter referred to as Transferee Company') as a going concern.

The Transferor Company is a private Company limited by shares. It was incorporated on 4th September 1995, under the Companies Act, 1956. The Transferor Company's Corporate Identification Number (hereinafter referred as "CIN") is U51109DL1995PTC324907 in the name and style 'Girja Shankar Agrochem Private Limited'. It is noted that the Transferor Company was incorporated with the Registrar of Companies, Kolkata, thereafter the Transferor Company was shifted from the State of West Bengal to National Capital Territory of Delhi & Haryana (hereinafter referred as "NCT of Delhi & Haryana") and such alteration was confirmed vide Order dated 07.09.2017 of the Regional Directors, and the certificate for change of State was issued by the Office of the Regional Director. The Registered Office is situated at L-2, F, Sheikh Sarai, New Delhi - 110017. The Transferor Company is carrying on the business in India i.e., to commercialize, clean, develop, finish, crush, extract, grind, grade, mix, disinfect, compound, transport, refine, protect, supply and act as buyer, seller, broker, seller, agent, representative. Stockist, distributor or otherwise, to deal in all its branches etc. The details of the main objects of the Transferor Company are set out in the Memorandum of Association (hereinafter referred as "MOA") of the company.

The Transferee is a private company limited by shares. It was incorporated on 21st January 2010 under the Companies Act, 1956 with the Registrar of Companies, NCT of Delhi & Haryana under the CIN U45400DL2010PTC198256. The Registered office of the Transferee Company is situated at Flat No. 412, Naurang House, 21, K.G. Marg, 21, New Delhi - 110025. The Transferee Company is carrying on the business of builders and colonizers, Land Lords or proprietors, occupiers, lesser, managers, contractors with the possession of all kinds of buildings weather residential, commercial, cinema houses, hotels, motels, factories, workshops and estates in India or elsewhere.- The details of the main objects of the Transferee Company are set out in the Memorandum of Association (hereinafter referred as "MOA") of the company.

The Board of Directors of the Petitioner Companies approved the proposed Scheme vide Resolution dated 1s' November 2017. The other necessary requirements have also been fulfilled as per the Order dated 19.01.2018 passed by this Bench in CA (CAA) - 137 (ND)/2017 and the requirement of convening/holding meetings of the Shareholders and Creditors of the Petitioners Companies was dispensed with.

The Ld. Counsel for the Petitioner Companies has submitted that the Petitioners Companies are Private Limited companies and the rationale of the Proposed scheme of Amalgamation is that there will be benefit of better finances, facilitate adequate resource mobilisation to sustain growth, strengthening and consolidating the position of Transferee Company and enabling it post-merger to participate more vigorously and profitably in an increasingly competitive and liberalized market, better leverage of facilities, infrastructure and human resources and for better administration, augmenting and strengthening core business of Transferee Company resulting in enhancement, of shareholders' value. Post-merger there will be significant reduction in the multiplicity of legal and regulatory compliances required, there will reduction of overhead, administrative, managerial and other expenditure, and bring about operational rationalisation, organisational efficiency and optimal utilization of various resources.

The Regional Director, Northern Region, Ministry of Corporate Affairs (hereinafter referred as "RD") in its affidavit has submitted that the transferee company has failed to file balance sheet as on 31.03.2017. Further, it is observed that the Balance sheet and profit & Loss account of the Transferor Company for the 2006-2007, 2008-2009, 2009-2010 shows that investments were substantial for the company to be considered as a Non-banking Financial Company (hereinafter referred as "NBC") without obtaining registration from the Reserve bank of India (hereinafter referred as "RBI") under section 45IA of the Reserve Bank of India Act, 1934. Further, the Transferor Company has been refraining from disclosing the statutorily mandated information in its balance sheets and profit and loss accounts for several years including 2016-17, 2015-16, 2014, -15, 2013-14, 2012-13, 2011-12, which were filed with the Registrar of Companies. Therefore, the offences should first may get compounded under the provisions of Section 621A of the Companies act 1956/Section 441 of the Companies Act 2013.

In reply the Transferee company has filed an affidavit dated 10th July, 2020 and deposed that it undertakes to file the revised financial Statements for the years 2014-15, 2015-16 & 2016-17 as desired by the RD. Further, it is stated that the Company is not doing the investment into securities of the marketable securities due to non-availability of any viable project, the company has made the investments into the private company's shares.

In compliance with the Order dated 06.02.2020, wherein direction was given to send private notice to RBI along with the petition of merger. It is deposed in the Affidavit that notice was sent but no reply has been received from RBI and no show caused notice is issued to the Transferor Company by the RBI to the effect that it falls in the category of NBFC. It is further deposed that the transferee company undertakes to comply all the requirements that arise in future. It also undertakes to pay any fine or penalty, if imposed by the RBI in future.

The Income Tax department (hereinafter referred as "ITD"), has filed its report wherein there are certain observations. The Transferor Company has replied but there are pending issues to which the Petitioner Companies shall comply as required under the relevant provisions of IT Act.

The Official Liquidator (hereinafter referred as 'OL') in his Report, based on the information submitted by the Petitioner Companies is of the view 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 as per the provisions of the Act. 1956/Act. 2013 and that no complaint against the proposed Scheme has been received from any person/party interested in the Scheme in any manner till the date of filing of Report.

Clause 4.4 of Part 2 of present Scheme provides that upon Scheme becoming effective, all the Assets and Liabilities of the Transferor Company shall be incorporated in the books of the Transferee Company on the basis of the values recorded in the books of accounts of the Transferor Company as on the Appointed Date.

Clause 7 of Part 2 of the Scheme provides that all staffs, workmen, and other employees in the service of the transferor Company, immediately before the transfer of the undertaking under the Scheme shall become the staff, workmen and other employees of the transferee Company. The terms and conditions not less favourable than those on which they are engaged by the Transferor Company in relation to the undertaking and without any interruption of or break in service as a result of the transfer of undertaking.

Clause 11 of Part 2 of the Scheme provides that upon the scheme becoming effective and with effect from the appointed date, the merger of the Transferor Company with Transferee Company shall be accounted as per "The Pooling of Interests Method" as prescribed in the Accounting Standard-14 contained in Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of the Act, 2013.

Clause 12.2 of Part 2 of the Scheme provides that the Memorandum of Association of the Transferee Company shall automatically stand amended accordingly, and the words and figures in Clause V of the Memorandum of Association of the Transferee Company shall be substituted with the amended Authorised Share Capital.

There is no additional requirement for any modification and the Scheme of Amalgamation appears to be fair and reasonable and is not contrary to public policy and not violative of any provisions of law. Ail the statutory compliances have been made under Sections 230 to 232 of the Companies Act, 2013.

Taking into consideration the above facts, the Company Petition is allowed and the Scheme of Amalgamation annexed with the Petitions is hereby Sanctioned. The Scheme approved shall be binding on the Shareholders, Creditors and employees of the Companies involved in this Scheme. The Appointed date of the Scheme is 01.04.2017.

While approving the Scheme as above, it is further clarified that this Order will not be construed as an order granting exemption from payment of stamp duty or taxes or any other charges, if payable, as per the relevant provisions of law or from any applicable permissions that may have to be obtained or. even compliances that may have to be made as per the mandate of law.

The Companies to the said Scheme or other person interested shall be at liberty to apply to this Bench for any direction that may be necessary with regard to the working of the said Scheme.

A certified copy of this Order shall be filed with the concerned Registrar of Companies (ROC) within 30 days of the receipt of this Order.

The Transferor Company shall be dissolved without winding up from the date of the filing of the certified copy of this Order with the concerned Registrar of Companies.

Upon receiving the certified copy of this Order, the RoC concerned is directed to place all documents relating to the Transferor Company with that of the Transferee Company and the files relating to the Transferor Company shall be consolidated with the files and records of the Transferee Company.

The Order of sanction to this Scheme shall be prepared by the Registry as per the relevant format provided under the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.

Accordingly, the Scheme stands sanctioned and CAA-13/ND/2018 stands allowed.

The order is pronounced.