R.K. Marble Pvt. Ltd vs R.K. Marble & Granite Pvt. Ltd

Raghu Nayyar, Technical Member

This joint Second Motion Petition under Sections 230 & 232 of the Companies Act, 2013 (‘Act’) is filed by the Petitioner Companies in terms

of Rule 15 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (‘Rules’) for the sanction of Scheme of

Arrangement (‘Scheme’) betweenR.K. Marble Private Limited (‘Demerged Company’) and R.K. Marble & Granite Private Limited

(‘Resulting Company’). The Scheme proposes demerger of the “Marbles and Granite Slab Division†(‘Demerged Undertaking’) of

the Demerged Company and vesting of the same with the Resulting Company. The joint petition is maintainable in terms of Rule 3(2) of the Rules.

2.From the records, it is seen that the first motion Application seeking directions for dispensing with the meetings of the Equity Shareholders, Secured

Creditors and Unsecured Creditors of the Applicant Companies was filed before this Tribunal on 14.12.2020 vide CA (CAA) No.

197/230(1)/IPR/2020 and based on such joint Application moved under Sections 230-232 of the Companies Act, 2013, directions were issued by this

Tribunal, wherein the meetings of Equity shareholders, Secured Creditors and Unsecured Creditors of the Applicant Companies were dispensed with

vide Order dated 25.02.2021.

Thereafter, the Petitioner Companies filed second motion joint petition before this Tribunal on 02.03.2021 within the time prescribed. Consequently,

the matter was listed on 23.03.2021 and following orders were passed: -

(i) The date of hearing of the petition filed by the petitioner for the approval of the Scheme is fixed on 27.04.2021.

(ii) Notice of the hearing shall be advertised in two Newspapers, namely, Times ofIndia (Jaipur Edition) and Dainik Navjyoti, Ajmer Edition, not less than 10 days

before the aforesaid date fixed for hearing.

(iii) In addition to the above public notice, each petitioner company shall serve the notice of the Petition on the following Authorities, namely Central

Government, Jurisdictional Income Tax Authorities under which the Petitioner Company is assessed indicating clearly the PAN No., Registrar of Companies,

Jaipur, Competition Commission of India as well as other sectoral regulators which may govern the working of the respective companies involved in the Scheme,

at least 30 days before the date fixed for hearing of the above petition.

(iv) Further, notices shall also be served to objector(s) or to the representative(s) as contemplated under Sub-section (4) of Section 230 of the Companies Act

who may have made representations and who have desired to be heard in their representation along with a copy of the Petition and the extracts filed therewith at

least 15 days before the date fixed for hearing.

(v)The petitioner companies shall at least 7 days before the date of hearing of the petition, file an aflidavit of service in relation to said publication effected as

well as service of notices on the Authorities specified above including the Sectoral Regulator(s) as well as to objectors, ifany.

(vi) Objections, if any, to the Scheme contemplated by the authorities to whom notice has been given on or before the date of hearing fixed herein maybe filed,

failing which it will be considered that there is no objection to the approval of the Scheme on the part of the authorities by this Tribunal and subject to other

conditions being satisfied as may be applicable under the Companies Act, 2013 and relevant regulations/ rules framed thereunder.

(vii) The Petitioner Companies shall comply with proviso to Sub-section(7) of section 230, as may be applicable under the circumstances on or before the date

fixed for hearing by filing the certificate of Company’s auditor.

The Petitioner Companies have filed compliance affidavit vide Diary No. 992/2021 dated 16.04.2021 along with copies of the newspaper

publications and copies of proof of service of notice to the statutory authorities. The Petitioner Companies have also filed affidavit in compliance of

order dated 25.02.2021, vide Diary No. 672/2021 dated 12.03.2021, through their authorized signatory, wherein it has been stated that the value of

assets and turnover of the combined entity is much less than the threshold limit as specified under Section 5 of the Competition Act, 2002 read with

relevant notifications, therefore, the proposed Scheme is not covered under Section 5 of the Competition Act, 2005.

On perusal of the record, it is found that the Department of Income Tax has filed a letter along with no objection certificate vide Diary No.

832/2021 dated 31.03.2021. It is stated in the letter that no demand is outstanding and no other adverse action is pending in this case.

The Regional Director, North Western Region, MCA to whom notice was issued has filed its observations vide Diary No. 792/2021 dated

24.03.2021before this Tribunal and upon perusal of the same it is observed that the Regional Director has made following observations:

a.There is requirement to increase the authorised capital of the petitioner resulting company, therefore the Petitioner Companies be directed to comply with the

provisions of Section 61 of the Companies Act, 2013 and also as to the payment of stamp duty, registration fee etc.

b.The Petitioner Companies may please be directed to comply with Section 2(19AA) of the Income Tax Act, 1961 in the matter as this is a scheme of demerger.

c. The Petitioner Companies be directed to pay amount of legal fees/ cost to the Central Government which may be considered appropriate by this Tribunal.

d. The Regional Director has no other observations/ submissions except as stated above in respect of consideration of the Scheme of Arrangement of the Petitioner

Companies and it may be considered on merits.

The Regional Director in its report has submitted that the office of the RoC cum OL, Jaipur, Rajasthan has forwarded its report dated 26.02.2021

and has no complaint against the Petitioner Companies and the Scheme of Arrangement.

The Petitioner Companies have filed counter affidavit vide diary no. 993/2021 dated 16.04.2021 to the observations of Regional Director and submit

as under:

a. Upon sanction of the scheme of the arrangement, the Petitioner Resulting Company will increase authorized share capital to the extent necessary to issue and allot

new equity shares to the shareholders of the demerged company. It further undertakes to comply with the provisions of Section 61 of Companies Act, 2013 and will

pay stamp duty, registration fees, etc.

b. The Petitioner Companies undertake to comply with the provisions of Section 2(19AA) of the Income Tax Act, 1961.

It is further stated that the Petitioner Companies have not received any objection/ representation from any person against the proposed Scheme of

Arrangement till date. A joint affidavit of the authorized representative of both the Petitioner Companies in this regard have been filed vide Diary No.

1041/2021 dated 22.04.2021.

The Petitioner Companies have already submitted at the first motion stage that no investigation proceedings are pending against them.

In compliance of the proviso to sub-section (7) of Section 230 of the Companies Act, 2013, the Petitioner Companies have placed on record

certificate of the Chartered Accountant vide Diary No. 994/2021 dated 16.04.2021 at Annexure-1, confirming that the accounting treatment envisaged

under the Scheme of Arrangement is in compliance with the applicable accounting standards notified by the Central Government under Section 133

of the Companies Act, 2013. The Petitioner Companies have also filed copy of provisional financial statements as on 31.03.2021 vide Diary no.

1042/2021 dated 22.04.2021.

Having heard learned counsel for the Petitioners and perused documents placed on record, and also considering the approval accorded by the

members and creditors of the Petitioner Companies to the proposed Scheme, and the affidavits/ no objection filed by the respective regulatory

authorities, there appears no impediment in sanctioning the present Scheme. Consequently, sanction is hereby granted to the Scheme under Section

230-232 of the Companies Act, 2013. The Petitioners shall however remain bound to comply with the statutory requirements in accordance with law

and other directions as pointed by the Regional Director.

Notwithstanding the above, if there is any deficiency found or, violation committed qua any enactment, statutory rule or regulation, the sanction

granted by this Tribunal 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.

While approving the Scheme as above, we further clarify that this order should not be construed as an order in a manner granting exemption from

payment of stamp duty, or taxes including income tax, GST etc., or any other charges or payment in accordance with law, or any kind of waiver in

respect of any permission / compliance with any other requirement which may be specifically required under any law.

THIS TRIBUNAL DOES FURTHER ORDER:

I. Upon the Scheme becoming effective, on and from the Appointed Date in the Scheme, i.e. 01.04.2021, the Demerged Undertaking shall, together with all its property,

rights and powers be transferred without further act or deed to the Resulting Company and accordingly the same shall pursuant to Section 232 of the Act, stand

transferred to and vest in the Resulting Company for all the estate and interest of the Demerged Undertaking therein but subject nevertheless to all charges now

affecting the same.

II. All licenses, permissions, permits, approvals, certificates, clearances, authorities, leases, tenancy, assignments, rights, claims, liberties, special status, other

benefits or privileges and any power of attorney relating to the Demerged Undertaking shall stand transferred to and vested in the Resulting Company, without any

further act or deed and shall be in full force and effect in favour of the Resulting Company, as if the same were originally given to, issued to or executed in favour of

the Resulting Company. The Resulting Company shall be bound by the terms thereof, theobligations and duties thereunder, and the rights and benefits under the

same shall be available to the Resulting Company.

III. All the liabilities and duties of the Demerged Undertaking be transferred, without further act or deed, to the Resulting Company and accordingly the same shall

pursuant to Sections 230 & 232 of the Companies Act, 2013, be transferred to and become the liabilities and duties of the Resulting Company.

IV. All contracts, agreements, insurance policies, bonds and all other instruments of whatsoever nature or description, of the Demerged Company in respect of the

Demerged Undertaking which are subsisting or having effect immediately before the Effective Date as per the Scheme, shall stand transferred to and vested in the

Resulting Company and be in full force and effect in favour of the Resulting Company and may be enforced by or against it as fully and effectually as if, instead of

the Demerged Company to the extent of Demerged Undertaking, the Resulting Company had been a party or beneficiary or obliged thereto / thereunder.

V. All taxes paid or payable by the Demerged Company in respect of Demerged Undertaking, to the extent clear and distinct and all existing and future incentives, un-

availed credits and exemptions, benefit of carried forward losses and other statutory benefits, towhich the Demerged Undertaking is entitled to shall be available to

and vest in the Resulting Company.

VI. All proceedings now pending by or against the Demerged Company in respect of Demerged Undertaking shall be continued by or against the Resulting Company.

VII. All employees in the service of the Demerged Undertaking of the Demerged Company shall be deemed to have become the employees and the staff of the

Resulting Company on date immediately preceding the date on which the scheme finally takes effect on the basis that their services shall be deemed to have been

continuous and not have been interrupted by reasons of the said transfer and on term and conditions no less favourable than those on which they were / are

engaged, as on the Effective Date.

VIII. The Resulting Company shall, without further application, allot 1 (One) Equity Share of the Resulting Company at the face value of Rs. 10/- each, credited as

fully paid-up for every 10 equity shares of Rs. 10/- each fully paid-up held by such member in the Demerged Company as on the Record Date.

IX. The Petitioner Companies shall within thirty days of the date of receipt of this order cause a certified copy of this order to be delivered to the Registrar of

Companies.

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

XI. The Resulting Company shall deposit an amount of t25,000/- to be paid in favour of “The Prime Minister’s National Relief Fundâ€​, t30,000/- to be paid in the

Online Miscellaneous fee account of Ministry of Corporate Affairs and t20,000/- to be paid in favour of “NCLT Rajasthan Bar Association, Jaipur†within a period

of four weeks from the date of receipt of the certified copy of this order.

XII. The Copy of Scheme of Arrangement filed at page no. 28-46 of the second motion Application shall form integral part of this Order.

As per the above directions, Form No. CAA-7 of Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, formal orders be

issued on the Petitioners on filing of the Schedule of Property, i.e. (i) freehold property of the Demerged Company in respect of Demerged

Undertaking; and (ii) leasehold property of the Demerged Company in respect of Demerged Undertaking, by way of affidavit of the Demerged

Company, respectively. Copy of this order be communicated to the Counsel for the Petitioners.