NWM Services India Private Limited vs Registrar of Companies

Subrata Kumar Dash, Member (Technical)

CA No. 53/2022

The present application has been filed by the applicant under Rule 11 of NCLT Rules, 2016 for condonation for delay of 21 days in compliance of order dated 07.01.2022 issued by this Bench on the ground of lockdown in January, 2022 due to COVID-19. The application is supported by an affidavit. Keeping in view the facts and circumstances mentioned in the application, and in the interest of justice, the delay of 21 days is hereby condoned and the compliance is taken on record. Thus, CA No. 53/2022 is disposed of accordingly.

CA No. 54/2022

The present application has been filed by the applicant under Rule 11 of the NCLT Rules, 2016 for placing on record additional documents on behalf of petitioner companies. The same are taken on record. Thus, CA No. 54/2022 is disposed of accordingly.

CA No. 56/2022

The present application has been filed by the applicant under rule 11 of NCLT Rules, 2016 for placing on record some additional documents on behalf of Petitioner Company No.2. The same are taken on record. Thus, CA No. 56/2022 is disposed 41of accordingly.

CP (CAA) No.33/Chd/Hry/2020

This is a joint second motion application filed by Petitioner Companies namely; NWM Services India Private Limited (Transferor Company/Petitioner Company No.1) with RBS Services India Private Limited (Transferee Company/Petitioner Company No.2) under Section 230-232 of Companies Act, 2013 (the Act) read with Rule 15 of the Company (Compromises, Arrangements and Amalgamations) Rules, 2016 (the Rules).

The Petitioner Companies have prayed for sanctioning of the Scheme of Amalgamation between the respective companies. The said Scheme is attached as Annexure P-1 to the application.

The Petitioner Companies had filed first motion application bearing CA (CAA)No.28/Chd/Hry/2020 before this Tribunal for seeking directions for dispensing with the meetings of Equity Shareholders, Secured and Unsecured Creditors of all the Applicant Companies. The First motion application was disposed of by order dated 09.12.2020, with directions to dispense with the meetings of Equity Shareholders, Secured and Unsecured Creditors of all the Applicant Companies for the reasons mentioned in the aforesaid orders.

The main objects, date of incorporation, authorized and paid-up share capital, and the rationale of the Scheme had been discussed in detail in the order dated 9. 12.2020.

In the second motion proceedings, certain directions were issued by this Tribunal by order dated 01.09.2021 and the same were compiled by filing separate compliance affidavits by Diary No.02079/2 and Diary No.02079/3, both dated 01.11.2021. The notice of hearing was published in “Business Standard” (English) dated 15.10.2021 and “Jansatta” (Hindi) dated 14.10.2021 both in Delhi NCR Edition. The original newspapers clippings are attached as Annexure-B of the aforesaid affidavit. It is also stated in the affidavits that copies of notices were served upon the (a) Central Government through Regional Director (Northern Region), Ministry of Corporate Affairs, New Delhi; (b) Registrar of Companies, NCT of Delhi and Haryana; (c) the Official Liquidator (attached to Punjab and Haryana High Court);(d) The Competition Commission of India; (e) the Development Commissioner, Noida; (f) the Director, Software Technology Park of India; (g) the Reserve Bank of India; and (h) Income Tax Department through the Nodal Officer-Principal Chief Commissioner of Income Tax, Aaykar Bhawan, Sector 17-E, Chandigarh, through speed post. Copy of original postal receipts alongwith tracking report evidencing the receipt of notices are attached as Annexure- A of the aforesaid affidavits.

It is deposed by the authorized representatives of Petitioner Companies by way of affidavit that the petitioner companies have not received any objection/representation as contemplated under proviso of sub-section 4 of Section 230 of the Companies Act, 2013. The aforesaid affidavits are part of Diary No. 02079/2 and Dairy No. 02079/3 dated 01.11.2021

In response to the abovementioned notices, the statutory authorities have furnished their replies.

7.1 Registrar of Companies (RoC)/Regional Director (RD)

7.1.1. The Regional Director (RD) has filed its report along with the report of the Registrar of Companies (RoC) by Diary No.02079/4 dated 24.11.2021. The R.D. in its report has observed that as per the report of the Registrar of Companies, the Transferor Company and the Transferee Company have filed their Balance Sheets and Annual Returns up to 2020. The ROC has made some observations in Para No. 10 stating that the subject matter of the scheme is to merge the shareholding  of  NWM  Services  India  Private  Limited  into  RBS Services India Private Limited in order to comply with UK Regulators ring-fencing rules and the Transferee Company has given loans and advances of Rs.226.93 millions to its related parties without creation of provisions of doubtful loan & advances.

7.1.2. The petitioner companies has filed affidavit by Diary No. 02079/07 dated 29.12.2021 wherein it has been stated that the words used in audited financial statements have not been accurately rejected in the Regional Director/Registrar of Companies report. It is also stated that the observations of ROC/RD with regard to the UK Regulations does not have any impact on the Scheme. This Bench has directed the Regional Director by its order dated 07.01.2022, to clarify the same and the Regional Director has filed additional representation by Diary No.02079/12 dated 08.03.2022 in which it is mentioned that;

“7. As per clarification sought from the ROC, Delhi it is concluded as under:

(i) That the Transferee Company has no loans & advances as per the Balance sheet as on 31.03.2021 filed with the MCA portal.

(ii) Regarding the impact of rings fencing rules of UK regulators in proposed merger, the requirement of transferring the shares of Transferor Company to transferee before amalgamation is a requirement in UK. Thus such requirement is not under the petition of any Indian Laws.”

Thus, there are no adverse observations from the Regional Director/Registrar of Companies in respect of the petitioner companies.

7.2 Official Liquidator

The Official Liquidator has filed his report by Diary No.02079/1 dated 29.10.2021. The relevant parts of the report in respect of Petitioner Company No.1 are extracted below:

i. The company does not have any pending litigations which would impact its financial position.

ii. The company did not have any long term contracts including derivatives contracts for which there were any material foreseeable losses.

iii. There was no amount which was required to be transferred to the Investor Education and Protection Fund by the Company.

iv. The company has not accepted any deposits from the public.

v. The company has not raised any moneys by way of initial public offer/further public offer/debt instruments and term loans.

vi. There is no pending cases against the company under the Companies Act, 2013.

On a perusal of the report it is seen that the Official Liquidator has made no adverse observation against the petitioner companies.

7.3 Income Tax Department

The Income Tax Department filed its report by Diary No.02079/5 dated 25.11.2021 by Diary No.873 dated 25.10.2021 and as per report Income Tax Department has no objection for the Scheme of Amalgamation of NWM Services India Private Limited and RBS Services India Private Limited.

7.4 Competition Commission of India (CCI)

The Competition Commission of India filed its report by Diary No. 879 dated 26.10.2021 wherein it has been stated that the present matter have not filed with Competition Commission of India (CCI) and an undertaking may be sought for the companies that Commission is not required for the matter.

The Petitioner Companies undertakes that no approval is required from Competition Commission of India (CCI) for the sanctioning of the present scheme. The said undertaking is duly made by a Diary No. 02079/06 and 02079/07, both dated 29.12.2021.

7.5 Software Technology Parks of India

The petitioner companies have filed the report of Software Technology Parks of India by Diary No. 02079/10 Dated 18.02.2022 wherein the aforesaid department has no objection in the merger of NWM Services India Private Limited and RBS Services India Private Limited.

The petitioner companies have also issued notices to Reserve Bank of India (RBI) and Copies of notices issued are attached as Annexure- A of Diary No.02079/2 and Diary No.02079/3, both dated 01.11.2021. However, there is no reply from the concerned authority till now. Considering the lapse of time in the matter, it is presumed that there is no objection to the proposed Scheme of Arrangement. Furthermore, the petitioner companies are not bank.

The certificate of the Statutory Auditors with respect to the Scheme of Amalgamation between petitioner companies to the effect that the accounting treatment proposed in the Scheme is in compliance with applicable Indian Accounting Standards (Ind AS) as specified in Section 133 of the Act, read with rules thereunder and other Generally Accepted Accounting Principles was filed as Annexure P-21 of the petition.

We have heard the learned Counsel for petitioner companies and learned Senior Standing Counsel for the Income Tax Department and perused the record carefully.

In the context of the above discussion, the Scheme contemplated between the petitioner companies, appears to be prima facie in compliance with all the requirements stipulated under the relevant Sections of the Companies Act, 2013. In the absence of any objections before us and since all the requisite statutory compliance have been fulfilled, this Tribunal sanctions the scheme of amalgamation appended as Annexure “P-1” with the company petition.

Notwithstanding the submission that no investigation is pending against the petitioner companies if there is any deficiency found or, violation committed qua any enactment, statutory rule or regulation, the sanction granted by this Tribunal 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.

While approving the scheme as above, it is clarified 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, payment is due or required in accordance with law or in respect to any permission/compliance with any other requirement which may be specifically required under any law.

THIS TRIBUNAL DO FURTHER ORDER:

(i) That all the property, rights and powers of the Transferor Company be transferred, without further act or deed, to the Transferee Company and accordingly, the same shall pursuant to Sections 230 to 232 of the Companies  Act,  2013,  be  transferred  to  and  vested  in  the  Transferee Company for all the estate and interest of the Transferor Company but subject nevertheless to all charges now affecting the same;

(ii) That all the liabilities and duties of the Transferor Company be transferred, without further act or deed, to the Transferee Company and accordingly the same shall pursuant to Sections 230 to 232 of the Companies Act, 2013, be transferred to and become the liabilities and duties of the Transferee Company;

(iii) That the Appointed Date for the scheme shall be 01.08.2020 as specified in the scheme;

(iv) That the proceedings, if any, now pending by or against the Transferor Company be continued by or against the Transferee Company;

(v) That the employees of the Transferor Company shall be transferred to the Transferee Company in terms of the 'Scheme';

(vi) That the fee, if any, paid by the Transferor Company on its authorized capital shall be set off against any fees payable by the Transferee Company on its authorized capital subsequent to the sanction of the 'Scheme';

(vii) That the Transferee Company shall file the revised memorandum and articles of association with the Registrar of Companies, NCT of Delhi and Haryana and further make the requisite payments of the differential fee (if any) for the enhancement of authorized capital of the Transferee Company; after setting off the fees paid by the Transferor Company;

(viii) That the Petitioner Companies shall, within 30 days after the date of 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 Company shall be dissolved without undergoing the process of winding up. The concerned Registrar of Companies, NCT of Delhi and Haryana shall place all documents relating to the Transferor Company registered with him on the file relating to the said Transferee Company, and the files relating to the Transferor Company and Transferee Company shall be consolidated accordingly, as the case may be;

(ix) That the Transferee Company shall deposit an amount of Rs.50,000/-(Rupees Fifty Thousand Only) in Prime Minister National Relief Fund, Rs.1,00,000/- (Rupees One Lakh Only) to be paid in favour of “Pay and Accounts Officer, Ministry of Corporate Affairs, New Delhi” and Rs.50,000/-(Rupees Fifty Thousand Only) in favour of "The Company Law Tribunal Bar Association" Chandigarh within a period of four weeks from the date of receipt of the certified copy of this order;

As per the aforesaid directions, Form No. CAA-7 of Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, formal orders be issued on the petitioners on the filing of the Schedule of Properties which shall be filed with three weeks from the date of receiving a copy of this order.

All the concerned Regulatory Authorities to act on a copy of this order annexed with the Scheme duly authenticated by the Registrar of this Bench.

The certified copy of this order, if applied for, be supplied to the parties, subject to compliance with all requisite formalities.

The Company Petition CP (CAA) No.33/Chd/Hry/2020 is disposed of accordingly.