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Judgment
Kishore Vemulapalli, Member (Judicial)
The Bench convened through video conferencing.
Heard the Learned Authorized Representative for the Petitioner Companies, the representative of the Regional Director (Western Region). No other objector has come before the Tribunal to oppose the Scheme and nor any party has controverted any averments made in the Petition.
The Learned Authorized Representative for the Petitioner Company submits that the present Company Petition is filed in consonance with Sections 230 to 232 of the Companies Act, 2013.
The Sanction of this Tribunal is sought under sections 230-232 and other applicable provisions of the Companies Act, 2013 for the Composite Scheme of:
i. Amalgamation of SHRI RANGJI REALTIES PRIVATE LIMITED, the Amalgamating Company 1 with CAPRI GLOBAL HOLDINGS PRIVATE LIMITED, the Amalgamated Company 1 and
ii. Amalgamation of CAPRI GLOBAL ADVISORY SERVICES PRIVATE LIMITED, the Amalgamating Company 2 and BUDHINATH ADVISORY SERVICES PRIVATE LIMITED, the Amalgamating Company 3 and SARVASIDDHANTA PROPERTIES PRIVATE LIMITED, the Amalgamating Company 4 and MONEY MATTERS PROPERTIES PRIVATE LIMITED, the Amalgamating Company 5 and CAPRI GLOBAL RESOURCES PRIVATE LIMITED, the Amalgamating Company 6 with CAPRI GLOBAL HOLDINGS PRIVATE LIMITED,the Amalgamated Company 2 under Sections 230 to 232 of the Companies Act, 2013 (‘Scheme’).
The Learned Authorized Representative for the Petitioner Companies submit that the Board of Directors of the Petitioner Companies, at their respective meetings held on 24th January, 2022 have approved the Composite Scheme of Amalgamation. The appointed date of this Composite Scheme of Amalgamation is 01.04.2022.
The Learned Authorized Representative submits that the Amalgamating Company 1 at present is engaged in the business of Real Estate, Investment and Advisory Services. The Amalgamating Company 2 at present is engaged in the business of Real Estate, Investment and Advisory Services. The Amalgamating Company 3 at present is engaged in the business Real Estate, Investment and Advisory Services. The Amalgamating Company 4 at present is engaged in the business of Real Estate, Investment and Advisory Services. The Amalgamating Company 5 at present is engaged in in the business of Real Estate, Investment and Advisory Services. The Amalgamating Company 6 at present is engaged in in the business of auxiliary financial intermediation. The Amalgamated Company 1/ Amalgamated Company 2 at present is engaged in the business of Real Estate, Investment and Advisory Services.
The Learned Authorised Representative for the Petitioner Companies state that the Amalgamated Company 1 / Amalgamated Company 2 other subsidiary, known as Capri Global Assets Reconstruction Private Limited (‘CGARPL’) has received an in-principle approval from the Reserve Bank of India (‘RBI’) on 9th November, 2021 to set up an Asset Reconstruction (‘ARC’) under Section 3 of the SARFAESI Act, 2002. Further, this in-principle approval is valid for a period of six months from the date of grant of in-principle approval and subject to certain additional conditions mentioned in Para 2 of the approval letter which the Promoter Group has to meet before the expiry of six months. One of the conditions given at Para 2 (IV) states that the Promoter Group has to expedite and complete the process of its proposed merger and consolidation of group entities in order to minimize the cross holdings and simplify the group structure. Hence, the present Composite Scheme of Amalgamation is being proposed to comply with one of the conditions of in-principle approval of RBI to set up an ARC in CGARPL. Further, the amalgamation in the present Composite Scheme will result in simplification, focused management, streamlining and optimization of the group structure and efficient administration. The amalgamation in the present Composite Scheme shall be in the interest of all concerned stakeholders, including shareholders, creditors, employees, and general public, inter alia, for the following reasons:
The Learned Authorized Representative for the Petitioner Companies further submits that the Petition had been filed in consonance with the Order dated 29th August, 2022, passed by this Hon’ble Tribunal in the connected Company Application No. CA(CAA) 48/MB/C-IV/2022.
The Learned Authorized Representative for the Petitioner Companies states that the Petitioner Companies have complied with all requirements as per the directions of this Tribunal and have filed necessary Affidavits confirming compliance.
The Regional Director, (Western Region), Ministry of Corporate Affairs, Mumbai, has filed their Report dated 19th October, 2022 stating that save and except as stated in paragraphs Paragraphs 2 (a) to 2(j), the Regional Director has no other objection to the scheme. In response, the Petitioner Companies have filed their Reply in Rejoinder filed on 20th October, 2022.
The Regional Director has provided following observations / comments:
Para
Observations of the
Regional Director vide report dated 19th October, 2022
Reply by the
Petitioner Companies
(a)
The observations of the Regional Director on the proposed Scheme to be considered by the Hon'ble NCLT are as under: -
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.
As far as the observations made in paragraph 2 (a) of the Report of the Regional Director is concerned, the Petitioner Companies undertake to pass such accounting entries which are necessary in connection with the Scheme to comply with such
accounting
standards notified under Section 133 of the Companies Act, 2013 as may be applicable to the Petitioner Companies (including Ind AS- 103 and Ind AS-8).
(b)
As per Definition of the Scheme,
“Part II Appointed Date" means the opening of business hours as on 1st day of April, 2022 or if the Board of the Amalgamating Company 1 and the Amalgamated Company 1 require any other date or the National Company Law Tribunal modifies the Part II Appointed date to such other date, then the same shall be the Part II Appointed date;
"Part III Appointed Date" means the 1st day of April, 2022 immediately after giving effect to the amalgamation of Part II Amalgamating Company with Amalgamated Company 1 as set out in Part II of this Composite Scheme or if the Board of the Amalgamating Company 2, Amalgamating Company 3, Amalgamating Company 4, Amalgamating Company 5, Amalgamating Company 6 and the Amalgamated Company 2 require any other date or the National Company Law Tribunal modifies the Part III Appointed date to such other date, then the same shall be the Part III Appointed date; And
"Effective Date” shall mean the date on which certified copy of the Order of the Hon'ble NCLT sanctioning the Composite Scheme is fled with the Registrar of Companies, Maharashtra, Mumbai. Any reference in the Scheme to "upon the Scheme becoming effective" or " effectiveness of the Scheme" shall mean the
Effective date;
Further, the Petitioners may be asked to comply with the requirements as clarified vide circular no. F. No. 7/12/2019/CL-1 dated 21.08.2019 issued by the Ministry of Corporate Affairs.
As far as the observations made in paragraph 2 (b) of the Report of the Regional Director is concerned, the Petitioner Companies undertakes that the Scheme will be effective from the respective Appointed Date, i.e., 1st April 2022, or such other date as may be decided by the National Company Law Tribunal. Further,
the Petitioners
undertakes to comply with the requirements clarified vide circular no. F, No. 7/ l2/2019/CL- 1
dated 21.08.2019 issued by the Ministry of Corporate Affairs., as may be applicable to the Petitioner
Companies.
(c)
Petitioner Company. have to undertake to comply with section 232(3)(i) of Companies Act, 2013, where the transferor company is dissolved, the fee and stamp duty paid by the transferor company on its authorized capital shall be set- off against fees and stamp duty payable by the transferee company on its authorized capital subsequent to the amalgamation and therefore, petitioners to undertake that the transferee company shall pay the difference of fees and stamp duty.
As far as the observations made in paragraph 2 (c) of the Report of the Regional Director is concerned, the Transferee Company undertakes that the fee, if any, will be paid in compliance with the provisions of Section 232(3)(i) of the Companies
Act, 2013.
(d)
The Hon'ble Tribunal may kindly seek the undertaking that this Scheme is approved by the requisite majority of members and creditors as per Section 230(6) of the Act in meetings duly held in terms of Section 230(1) read with 7 subsection (3) to (5) of Section 230 of the Act and the Minutes thereof are duly placed before the Tribunal.
Apropos the
observation of the
Regional Director stated in paragraph 2 (d) of his report is concerned, the Petitioner Companies submits that in pursuance of an Order dated 29th August, 2022 passed by this Tribunal in CA(CAA) No.
48/MB - IV/2022,
in so far as the Equity Shareholders of the Petitioner companies are concerned, the requirement to convene meeting of the Equity Shareholders were dispensed with in view of the consent affidavits obtained from all the Equity Shareholders of the Petitioner Companies.
In so far as the
Preference
Shareholders of the Amalgamating company 2 are concerned, the requirement to convene meeting was dispensed with in view of the consent affidavits given by the 100% preference shareholder.
Further there were
no secured creditors in any of the companies.
Further there were no Unsecured Creditors in any of the Companies except the Amalgamating Company 3 and Amalgamating Company 4 and the requirement to convene meeting of the Unsecured creditors was
dispensed with in
view of the consent affidavits obtained from the Unsecured Creditor in both
the Companies.
(e)
The Petitioner Company states that the Transferee Company shall be in compliance with provisions of Section 2(1B) of the Income Tax Act, 1961. In this regards, the petitioner company shall ensure compliance of all the provisions of Income Tax Act and Rules thereunder;
As far as the observations made in paragraph 2 (e) of the Report of the Regional Director is concerned, the Petitioner Companies submits that they will comply with the applicable provisions of the Income Tax Act and the rules
framed thereunder.
(f)
As per the MCA 21 Record, it is observed that following companies have collected Security Premium details of which are as under:
Capri Global Advisory Services Private Limited (Amalgamating Company 2)
As far as the observations made in paragraph 2 (f) of the Report of the Regional Director is concerned, the Petitioner Companies submits that the Income tax Department has
assessed or the
assessment is in process regarding the issue of securities premium and the proposed Composite Scheme of Amalgamation will not preclude any authority under the Income Tax Act, 1961 to assess the income and recover tax in accordance with law, if any.
The Petitioner Companies undertakes that interest of the Assessing Officer under the Income Tax Act, 1961 is protected and the proposed composite scheme of amalgamation shall not be prejudicial to the interest of the Assessing Officer.
The Petitioner
Companies further
undertake that the sanctioning of the Scheme will not adversely impact the rights of the Income tax Department for any present and future proceedings and the right to take appropriate action / proceedings as per law in case of an event of any tax avoidance or violation of Income tax law or any other similar issue and regarding raising of tax demand, subject to right of appeal available to the Petitioner Companies under applicable laws.
Date of Allotment
Name of
Allottee
No. of Shares
Issue price per
share
Face Valu e
Security Premium per share
Total Security Premium
collected
27.02.07
Jalco
Financial Services Pvt Ltd.
110,000
500
100
400
44,000,000
Kakade Retailing Private
Limited
45,000
500
100
400
18,000,000
31.03.07
Bharti Nijay
Gupta
1,100
500
100
400
440,000
Dharmendr a Singh
Naruka
800
500
100
400
320,000
Ganesh
Narayan Sharma
600
500
100
400
240,000
Govind Ram Khandelwal
800
500
100
400
320,000
Jagdish
Prasad Soni
400
500
100
400
160,000
Jagdish Prasad
Khandelwal
1000
500
100
400
400,000
Kailash Chand
Sharma
500
500
100
400
200,000
Kalpana
Saxena
500
500
100
400
200,000
Kamal Saxena
1900
500
100
400
760,000
Madhu
Sharma
800
500
100
400
320,000
Mahendra
Sharma
400
500
100
400
160,000
Mamta
Jain
500
500
100
400
200,000
Manish
Kanoongo
1400
500
100
400
560,000
Nirmala
Khator
200
500
100
400
80,000
Pradeep Kumar
Joshi
400
500
100
400
160,000
Puran Chand
Hingonia
800
500
100
400
320,000
Rajendra
Kumar Khandelwal
500
500
100
400
200,000
Rajkumar
Sharma
500
500
100
400
200,000
Ratan Devi
Rawat
200
500
100
400
80,000
Ravi Prakash
Sahu
500
500
100
400
200,000
Roopa Goyal
500
500
100
400
200,000
Satya Narayan
Tailor
400
500
100
400
160,000
Swarn Lata
Rawat
700
500
100
400
280,000
Trilok
Singh Bhati
1000
500
100
400
400,000
Vishal
Gupta
800
500
100
400
320,000
24.03.09
Orbit Lifeline Pvt Ltd
52,000
1000
100
900
46,800,000
115,680,000
Buddhinath Advisory Services Private Limited (Amalgamating Company 3):
Date of Allotment
Name of Allottee
No. of Shares
Issue price per
share
Face Value
Security Premiu m
Pershare
Tota Security Premiu
collected
14.01.08
Dhyaneshwar Trading & Investments
Pvt Ltd
85000
200
10
190
16150000
Money Matters Properties
Pvt Ltd
112500
200
10
190
23175000
Sitilite
97500
200
10
190
18525000
Properties
Pvt Ltd
Stroll
97500
200
10
190
18525000
Properties
Pvt Ltd
Terrain
Properties
7500
200
10
190
1425000
Pvt Ltd
Sweet
37500
200
10
190
7125000
Memories
Property Pvt
Ltd
Total
83125000
Money Matters Properties Pvt Ltd (Amalgamating Company 5):
Date of
Name of
No. of
Issue
Face
Securit
Total
Allotment
Allottee
Shares
price
Value
Premiu
Security
per
share
Per
share
Premium
collected
14.01.08
Balbhadra
Trading Pvt Ltd
25000
100
10
90
2250000
Caplin
10000
100
10
90
900000
Dealcom Pvt
Ltd
Karni Syntex
Pvt Ltd
10000
100
10
90
900000
Narottamka
Commoditie
25000
100
10
90
2250000
Pvt ltd
Plus Jet
Finvest Pvt ltd
15000
100
10
90
1350000
Prism Impex
Pvt Ltd
100000
100
10
90
9000000
RBM Impex
Pvt Ltd
30000
100
10
90
2700000
Satellite Mercantile
Pvt Ltd
25000
100
10
90
2250000
USG
Financial Services Ltd
25000
100
10
90
2250000
KSK Energy
Ventures Pvt Ltd
300000
100
10
90
27000000
Opportune Trading Pvt Ltd
200000
100
10
90
18000000
Prism Impex
Pvt Ltd
225000
100
10
90
20250000
Total
89100000
In the view of above, if agreed, Hon'ble NCLT may ask to clarify that Income Tax Department has properly assessed the increase of share capital from time-to- time u/s. 68 of the Income Tax Act, 1961 and confirmation of payment of Income Tax by existing shareholders, who have purchased shares at lower price than issued price from above allotees or seek the reply from Income tax department about issue of share capital at high premium on the shares.
2(g)
As per MCA 21 record and financial statements Shareholding pattern of corporate body shareholders/LLPs/HUF having more than 10% shareholders in petitioner companies are as under:
Apropos
observations in paragraph 2 (g) of the Report of the Regional Director is concerned, it is submitted that the Petitioner Companies have complied with the provisions of Section 90 of the Companies Act, 2013 read with Companies (Significant Beneficial Owners) Rules 2018 as on the date of filing this Rejoinder.
Name of the
Petitioner Companies
Name of Shareholders
Shareholding in
Petitioner Companies
Remarks
Shri Rangji Realties Private Limited (Transferor
Company)
Ramesh Chandra Sharma HUF
45.83%
BEN-2 filed
Capri Global Advisory Services Private Limited (Transferor Company)
Capri Global
Holdings Private Limited
47.41%
BEN-2 filed
Shri Rangji Realties Private
Limited
48.19%
BEN-2 filed
Budhinath Advisory Services Private Limited
Capri Global Advisory Services Private Limited
23.71%
BEN-2 filed
Capri Global Holdings Private Limited
25.71%
BEN-2 not filed Petitioner company may be directed to file
form BEN-2
Dhyaneshwar Trading Private Limited
16%
BEN-2 not filed Petitioner company may be
directed to file
form BEN-2
Sarvasiddhanta Properties Private Limited
Capri Global Advisory Services Private
Limited
12.55%
BEN-2 not filed Petitioner company may be directed to file
form BEN-2
Capri Global
Holdings Private Limited
12.50%
BEN-2 filed
Money Matters Properties Pvt Ltd
Capri Global Advisory Services Private
Limited
45.25%
BEN-2 not filed Petitioner company may be directed to file
form BEN-2
Capri Global
Holdings Private Limited
49.84%
BEN-2 filed
Capri Global Resources Private Limited
Capri Global Capital Limited
99.10%
Petitioner Company has filed BEN-2 declaring name of Holding Company.
Petitioner company may be directed to file BEN-2 form in the above stated companies in compliance of Section 90 Companies Act, 2013 r/w Companies (Significant Beneficial Owners) Rules, 2018.
(h)
It is stated that the Income Tax Authority vide letter dated 26.09.2022 (Annexed AS Annexure A-1) has submitted their comments, therefore, Hon'ble Tribunal may consider the same and decide the matter on its merits.
Apropos the objection paragraph
5 of the Notice of the
Income tax officer is concerned, the Petitioner Companies undertake to comply with the relevant conditions of amalgamation under the Income tax law and to set off and carry forward the losses of Amalgamating Company 3 only if permissible under the provisions of the Income tax Act.
Apropos the objection in paragraph 6 to 10 of the Notice of the Income Tax Officer is concerned, the Petitioner Companies undertakes that interest of the Assessing Officer under the Income
Tax Act, 1961 is
protected and the proposed composite scheme of amalgamation shall not be prejudicial to the interest of the Assessing Officer.
The Petitioner Companies further undertakes that the said scheme of amalgamation will not preclude any authority under the Income Tax Act, 1961 to assess the income and recover tax in accordance with law from Amalgamated Company 1 / Amalgamated Company 2 even if the tax accrued in respect of the Amalgamating Company 3.
The Petitioner
Companies refers to the relevant part of
clause 15.6 of Part III of the proposed composite scheme of amalgamation which states as under:
“It is further specifically clarified, admitted, assured and declared by the Amalgamated Company 2 that upon the Composite Scheme becoming Effective, it will take over, absorb and pay and discharge all the liabilities including liabilities for income tax, sales tax, fringe benefit tax, self- assessment tax, stamp duty, octroi, excise, customs, value added tax, service tax, GST including CGST,
SGST and IGST
or any other statutory dues, if any, of the Part III Amalgamating Companies. “
The Petitioner Companies also refer to the clause 17 of Part III of the proposed composite scheme of amalgamation which states as under:
“LEGAL
PROCEEDINGS:
Upon coming into effect of this Composite Scheme, all suits, claims, actions and proceedings by or against the Part III
Amalgamating Companies pending and / or arising on or
before the
Effective Date shall be
continued and be enforced by or against the Amalgamated Company 2 as effectually as if the same has been pending and / or arising by or against the Amalgamated Company 2.
The Amalgamated Company 2 will undertake to have all legal or other proceedings initiated by or against the Part III Amalgamating Companies transferred to its name and to have the same
continued,
prosecuted and
enforced by or against the Amalgamated Company 2.”
The Petitioner Companies further undertakes that it shall comply with all the applicable provisions of the Income Tax Act, 1961 and all tax issues, if any, arising out of the proposed scheme of amalgamation and that the sanction of the Scheme will not adversely impact the rights of the Income tax department to freely examine any aspect of tax payable as a result of the Scheme and to initiate appropriate course of action as per the law against the Amalgamated Company 1 / 2.
The Petitioner Companies further undertakes that the sanctioning of the scheme will not adversely impact the rights of the Income Tax Department for any present and future proceedings and the right to take appropriate action / proceedings as per law in case of an event of any tax avoidance or violation of Income tax law or any other similar issue and regarding raising of tax demand, subject to right of appeal available to the Petitioner Companies under applicable laws.
the Report of the Regional Director is concerned, it is submitted that the since there are no ongoing projects that are required to be registered under Real Estate (Regulation and Development) Act, 2016 ('RERA'), the
Petitioner
Companies are not within the jurisdiction of RERA and therefore there is no requirement to send notice to RERA under Section 230
(5) of the Companies
Act, 2013.
(i)
(ii)
(iii)
(iv)
That the ROC Mumbai in his report dated 07.10.2022 has stated that no Inquiry, inspection, investigation & prosecution is pending against the subject applicant companies.
Notices are to be issued to the Reserve Bank of India as all applicant Companies are Investment Companies.
Interest of creditors should the protected. May be decided on its merits.
The Petitioner Companies have already issued Notices to RBI on 7th September, 2022 and on 30th September, 2022pursuant to the directions of the Hon’ble NCLT in the Order dated 29th August, 2022 and 19th September,
2022.
The Petitioner
Companies
undertake to protect the interest of the
creditors.
The observations made by the Regional Director have been explained by the Petitioners in Paragraph 10 above. Moreover, the Petitioner Companies, undertake to comply with all statutory requirements, if any, as required under the Companies Act, 2013 and the Rules made thereunder whichever is applicable. The clarifications and undertakings given by the Petitioners are accepted.
The Official Liquidator, High Court, Bombay, has filed his report dated 18th October, 2022, stating therein that the affairs of the Amalgamating Companies have been conducted in a proper manner.
From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy.
Since the requisite statutory procedure has been fulfilled, the Company Petition is made absolute in terms of the prayer clause of the Petition.
The Scheme is hereby sanctioned, with the Appointed Date fixed as 1st April, 2022. The Amalgamating Company 1, Amalgamating Company 2, Amalgamating Company 3, Amalgamating Company 4, Amalgamating Company 5 and Amalgamating Company 6 be dissolved without winding up.
All concerned regulatory authorities to act on certified copy of the order and the form of minutes forming part of the Petition, duly certified by the Deputy Director or Assistant Registrar, National Company Law Tribunal.
The Petitioner Companies are directed to lodge a certified copy of this order along with a copy of the Scheme with the concerned Registrar of Companies, electronically along with e-Form INC-28, I addition to physical copy, within 30 days from the date of receipt of the order by duly certified by the Joint Registrar or Deputy Registrar of this Tribunal.
The Petitioner Companies to lodge a copy of this order and the Scheme duly authenticated by the Joint Registrar/Deputy Registrar of this Tribunal, with the concerned Superintendent of Stamps, for purpose of adjudication of stamp duty payable, if any, on the same within 60 working days from the date of receipt of the order.
All concerned regulatory authorities to act on a copy of this order along with Scheme duly certified by the Joint Registrar/Deputy Registrar of this Tribunal with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty payable within 60 days from the date of receipt of the Order, if any.
All authorities concerned to act on a copy of this Order along with Scheme duly authenticated by the Joint Registrar or Deputy Registrar of this Tribunal.
Any person interested is at liberty to apply to this Tribunal in the above matters for any directions that may be necessary.
Any concerned Authorities are at liberty to approach this Tribunal for any further clarification as may be necessary.
Ordered Accordingly. Files be consigned to records.