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Judgment
KANTHI NARAHARI, MEMBER (TECHNICAL)
Preamble:
The Present Appeal is filed by invoking provisions of Section 421 of the Companies Act, 2013 against the order dated 16th September, 2021 passed by the National Company Law Tribunal, Mumbai Bench-III, Mumbai in Company Application No.125 of 2021 in C.P. (CAA)/1050/MB/2020, C.P. (CAA)/1051/MB/2020 and C.P. (CAA)/1053/MB/2020 in C.A. (CAA)-1003/230-232/MB/2020 whereby the National Company Law Tribunal (in short ‘NCLT’) rejected the prayer of the Appellant.
Brief Facts:
Appellant’s Submissions:
The Learned Counsel for the Appellant submitted that aggrieved by the aforesaid order, the Appellant preferred the present Appeal and narrated the brief facts.
It is submitted that the Transferor Companies viz. Sanofi – Synthelabo (India) Pvt. Ltd. as First Transferor Company and Sanofi Pasteur India Pvt. Ltd. as Second Transferor Company and the Appellant being the Transferee Company filed the composite Application seeking sanction to the scheme of amalgamation of the Transferor Companies with the Appellant Company being the Transferee Company. It is stated that the said scheme was approved by the Board of Directors of the Companies vide Board Resolution dated 04.02.2020 with the appointed date as 01.04.2019 to the scheme of amalgamation.
It is submitted that the NCLT, Mumbai Bench, taken into consideration all the facts as required for sanctioning the scheme and the NCLT also taken into consideration the report filed by the Regional Director (Ministry of Corporate Affairs) dated 03.03.2021 stating as under:
“IV) The observations of the Regional Director on the proposed Scheme to be considered by the Hon’ble NCLT are as under:
a)In compliance of AS-14 (IND AS-103), the Petitioner Companies shall pass such accounting entries which are necessary in connection with the scheme to comply with other applicable Accounting Standards such as AS-5 (IND AS-8) etc.
b)As per Definition of the Scheme, “Appointed Date” for the purpose of this Scheme and for the IT Act, means 1st April 2019;
“Effective Date” means the last of the dates on which the certified or authenticated copies of the orders of the National Company Law Tribunal sanctioning the Scheme are filed with the Registrar of Companies, Mumbai by both the Transferor Companies and by the Transferee Company.
Any references in this Scheme to the date of “coming into effect of this Scheme” or “effectiveness of this Scheme” or “Scheme taking effect” shall mean the Effective Date;
Further, the Petitioners may be asked to comply with the requirements and clarified vide circular no. F. No. 7/12/2019/CL-I dated 21.08.2019 issued by the Ministry of Corporate Affairs.”
It is submitted that the Board of Directors of the Company have passed resolution in their meeting with a specific appointed date i.e. 01.04.2019 and even the Regional Director in its report also confirmed at sub-para (b) of Clause IV regarding the appointed date for the purpose of the scheme means 01.04.2019. However, the Learned NCLT while sanctioning the scheme at para ‘j’ stated that “the appointed date of the scheme is fixed as the effective date as defined in the scheme”.
The Learned Counsel submitted that after receipt of the copy of the order dated 20.04.2021 of the NCLT, the Appellant filed an Application No. 125 of 2021 seeking clarification of the order passed by the NCLT. It is brought to the notice of the NCLT specifically that the Board of Directors of the Petitioner Company had approved the scheme of amalgamation with appointed date as 01.04.2019 vide Board Resolution dated 04.02.2020. It is stated that in pursuance of the directions passed by the NCLT vide its order dated 22.06.2020, the meeting of equity shareholders of the First and Second Transferor Companies and the Appellant Company being the Transferee Company were convened and held on 10.08.2020 through video conferencing for the purpose of considering the scheme of amalgamation and the shareholder have approved the scheme in its entirety.
We have perused the scheme of amalgamation and as per Part-I, which consists definitions and share capital. As per Clause 1.2 of the Definitions the “Appointed Date” mentioned as 01.04.2019 and as per Clause 1.4 of the Definitions, the “Effective Date” means the last of the dates on which the certified or authenticated copies of the orders of the National Company Law Tribunal sanctioning the scheme are filed with the Registrar of Companies, Mumbai by both the Transferor Companies and by the Transferee Company. Any references in this scheme to the date of “coming into effect of this scheme” or “effectiveness of this scheme” or “Scheme Taking Effect” shall mean the effective date.
From the Definitions, the appointed date is specifically mentioned as 01.04.2019 therefore, while sanctioning the scheme the effective date cannot be taken into consideration and there is no reason to take into consideration the effective date for the purpose of sanctioning the scheme. The NCLT clearly erred in fixing the appointed date as the effective date as defined in the scheme is contrary to the sanctioning of the scheme by the shareholders. It is apt to note that pursuant to the directions of the NCLT, the Transferor Companies and Transferee Company have convened the meeting of the Shareholders and took the approval of the Shareholders. Even the Regional Director, Ministry of Corporate Affairs taken note of regarding the appointed date as 01.04.2019.
The Learned Counsel for the Appellant submitted that the Appellant Company and the Transferor Companies have given undertaking to comply with the requirements as clarified vide Circular No. F No. 7/12/2019-CL-I dated 21.08.2019 issued by the Ministry of Corporate Affairs. It is submitted that even the Reply filed by the Regional Director dated 03.03.2021 to the scheme also specifically mentioned at para 4(ii) that the appointed date mentioned as 01.04.2019 and the scheme will be effective from the said appointed date. Further, in the Reply it is stated that the Petitioner Companies undertakes to comply with the requirements as clarified Circular No. F No. 7/12/2019-CL-I dated 21.08.2019 issued by the Ministry of Corporate Affairs.
The Learned Counsel for the Appellant relied upon the judgment of this Tribunal in Accelyst Solutions Pvt. Ltd. Versus Freecharge Payment Technologies Pvt. Ltd. [Company Appeal (AT) No. 15/2021] has followed the above law and held as under:
“13.…. With the aforesaid, it is settled legal position that while exercising its powers in sanctioning a scheme of amalgamation, the Court / Tribunal has to examine as to whether the provisions of the statute have been complied with. The Court / Tribunal would have no further jurisdiction to sit in Appeal over the commercial wisdom of the shareholders of the Company….”
“16…. With the aforesaid reasons, we of the considered view that the exercising jurisdiction by NCLT Mumbai to modify the Appointed date from 07.10.2017 to 01.04.2018 in the facts of this case was unwarranted. Thus, the impugned order so far as the modification of Appointed Date is concerned is set aside and the Appointed Date as per scheme is fixed 07.10.2017, which is approved by the shareholder of the Appellant Company…” Whereby this Tribunal categorically held that the appointed date as per scheme which was approved by the Shareholders of the Appellant Company is to be taken into consideration.
In the present case, it is categorically held that the scheme was approved by the Shareholders with appointed date as 01.04.2019 and hence the appointed date of the scheme fixed as 01.04.2019.
In view of the aforesaid reasons and in exercise of powers conferred under Rule 11 of the NCLAT Rules, following order is made:
The order of NCLT dated 20.04.2021 at para ‘j’ is modified and read as under:
The appointed date of the scheme is fixed as 01.04.2019 as defined in the scheme.
Consequently, the order of the Tribunal dated 16.09.2021 is set aside.
Accordingly, the Appeal is allowed to the above extent. However, no order as to costs.