Signet Suppliers Private Limited vs Registrar of Companies

Subrata Kumar Dash, Member (Technical)

This is a joint second motion application filed by Petitioner Companies namely; Signet Suppliers Private Limited, (Petitioner Company No.1/Transferor Company No.1); Suncity Whole Sale Private Limited, (Petitioner Company No.2/Transferor Company No.2); Broadway Dealers Private Limited, (Petitioner Company No.3/Transferor Company No.3); Dolphin Tie Up Private Limited, (Petitioner Company No.4/Transferor Company No.4); Dynamic Developers Private Limited, (Petitioner Company No.5/Transferor Company No.5) and Tirupati Renewable Energy Company Private Limited (Petitioner Company No.6/Transferee Company) under Section 230-232 read with Section 52 and 66 of the Companies Act, 2013 (the Act) and Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (the Rules) in relation to the Scheme of Amalgamation between the petitioner companies.

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 of the petition.

The Petitioner Companies have filed the first motion application bearing CA (CAA) NO. 6/Chd/CHD/2021 before this Tribunal for seeking directions for dispensing with the meetings of the Equity Shareholders, Secured and Unsecured Creditors of the Applicant Companies and of preference shareholder and debenture holder of Applicant Company No.6. The first motion application was disposed of by order dated 06.10.2021, with directions to dispense with the meetings of Equity Shareholders, Secured Creditors and Unsecured Creditors of all Applicant Companies and of Preference Shareholder and Debenture Holders of Applicant Company No. 6 for the reasons mentioned in the aforesaid order.

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 06.10.2021.

In the second motion proceedings, certain directions were issued by this Tribunal by order dated 06.01.2022 and the same were compiled by filing affidavit vide Diary No. 01286/4 dated 11.03.2022. The notice of hearing was published in “Business Standard” (English) and “Jansatta” (Hindi) both Chandigarh Edition on 17.02.2022. The original copies of the newspapers are attached as Annexure-1 and 2 respectively of the aforesaid affidavit. It has also stated in the affidavits that copies of notices were served upon the (1) Central Government through Regional Director (Northern Region), Ministry of Corporate Affairs; (2) Registrar of Companies, Punjab and Chandigarh; (3) Official Liquidator (attached to Punjab and Haryana High Court); (4) Competition Commission of India (CCI), (5) Official Liquidator and (6) Reserve Bank of India; and (7) the jurisdictional Income Tax Department, by way of speed post. Acknowledgement of receipts and original postal receipts along with the tracking reports are attached as Annexure 3 to 8 of the aforesaid affidavits.

It is deposed by the authorised representative that the petitioner companies have not received any representation/objection to the proposed scheme as on date of signing this Affidavit. The aforesaid affidavit has been filed vide Diary No. 00283/4 both dated 11.03.2022.

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 Registrar of Companies (RoC) has filed its report along with the report of the Regional Director (RD), by Diary No.01286/12 dated 25.08.2022. In the report of Regional Director, it is stated at Para 10 that as per para 35 of the report of ROC, Delhi, dated 21.04.2022, the following observations has been made:-

“(i). Affidavit regarding compliance of provisions of Section 295, 297, 299 & 301 (Section 184, 185 and 189 of Companies Act, 2013) not furnished by petitioner companies.

(ii). The authorized capital of transferee company, after the scheme becoming effective shall be in accordance with Section 232(3)(i) of the Companies Act, 2013. As per the Section 232(3)(i) of Companies Act, 2013 the fee, if any, paid by the Transferor Capital shall be set-off against any fee payable by Transferee Company on its authorized capital subsequent to the amalgamation accordingly.

(iii) Transferor Companies and transferee Company have not filed e-form GNL-1 with the O/o Registrar of Companies, Punjab and Chandigarh.

7.1.2 In response to the aforesaid observations made by the RoC, the Petitioner Companies have filed a response by Diary No.01286/17 dated 26.08.2022 wherein it has stated that the provisions of Section 184, 185 and 189 of the Companies Act, 2013 are not applicable in the present case. The petitioner Companies has also also undertaken to abide by the provisions of the Companies Act, 2013. It is stated that the petitioner companies have duly intimated the filing of present petition and copies of Form GNL-1 in respect of all petitioner companies are attached at Page 5-34 of the affidavit.

On a perusal of the report and the response of the petitioners, it is seen that the observations raised by the RD/RoC stands duly satisfied.

7.2 Official Liquidator

The Official Liquidator has filed his report by 01286/11 dated 22.06.2011. The Official Liquidator in its report has reproduced the information on the incorporation of the Petitioner Companies, their capital structure, financial highlights, shareholding, etc. The Official Liquidator has also reproduced the extracts of Reports of the Statutory Auditors of the Petitioner Companies on the Financial Statements. It is also stated that as per the Scheme of Arrangement, no company will be dissolved without winding up.

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 Nos. 01286/5, 01286/7, 01286/8, 01286/9, 01286/10, all dated 27.04.2022 and 01286/15 dated 24.08.2022, wherein it has been stated that demand amounting to Rs 1,718 for A.Y. 2007-08 in respect of Petitioner company No. 2; and Rs 12,10,27,870/- for A.Y. 2008-09 in respect of Petitioner Company No. 5; and Rs. 63,21,320/- for A.Y. 2012-13, Rs. 20,19,230/-for A.Y. 2018-19, Rs. 780/- for A.Y. 2019-20 in respect of Petitioner Company No. 6 is pending. It is also averred that all losses and unabsorbed depreciation of the transferor companies be carried forward and set off against tax or future taxable income of the transferee company in accordance with the provisions of Section 72A of Income Tax Act, 1961.

In response to the aforesaid observations made by the Income Tax Department, the authorised representative of the Petitioner Companies has filed an affidavit by Diary No. 01286/3 dated 26.08.2022 wherein it has been deposed that all the demand outstanding as well as the liabilities, any pending Legal proceedings and pending tax or duties/levies shall be transferred into the Transferee Company as per Clause 3.2.6, 3.2.7 and 3.2.8 of the Scheme of Amalgamation.

On a perusal of the report and affidavit furnished by authorised representatives of the Petitioner Companies, it is seen that all the observations of the Income Tax Department are dully satisfied.

7.4 Competition Commission of India

7.4.1 The Competition Commission of India filed its report by Diary No.1183 dated 03.03.2022 and has stated that the aforesaid matter has not been filed with the Commission under the provisions of the Act and the Tribunal may seek an undertaking from the companies involved that approval of the Commission is not required for the said matter.

7.4.2 The authorised representative of the petitioner companies have stated by way of affidavits that none of the companies requires to take the approval of Competition Commission of India as the petition companies are outside the purview of the Competition Act, 2002 The aforesaid affidavit have been filed by Diary No.01286/01 dated 15.12.2021.

7.4.3 On a perusal of the report, it is seen that the Competition Commission of India has made no adverse observation against the petitioner companies.

The certificate of the Statutory Auditors with respect to the Scheme 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 Annexures P-15, P-17, P-19, P-21 and P-25 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. As the objections from the Statutory Authorities have been duly addressed by the Petitioner Companies and since all the requisite statutory compliances’ have been fulfilled, this Tribunal sanctions the Scheme of Amalgamation and Arrangement appended as Annexure “P-1” with the petition.

Notwithstanding the submission that no investigation is pending against the petitioner companies, if there is any deficiency found or, the 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 the 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 properties, rights and powers of the Transferor Companies be transferred, without further act or deed, to the Transferee Company and accordingly, the same shall pursuant to Sections 230 to 232 and Section 52 and 66 of the Companies Act, 2013, be transferred to and vested in the Transferee Company for all the estate and interest of the Transferor Companies but subject nevertheless to all charges now affecting the same;

ii. That all the liabilities and duties of the Transferor Companies be transferred, without further act or deed, to the Transferee Company and accordingly the same shall pursuant to Sections 230 to 232 and Section 52 and 66 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 01.04.2020 as specified in the scheme;

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

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

vi. That the fee, if any, paid by the Transferor Companies 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 concerned Registrar of Companies 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 Companies;

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 shall place all documents relating to the Transferor Companies registered with him on the file relating to the said Transferee Company, and the files relating to the Transferor Companies and Transferee Company shall be consolidated accordingly, as the case may be.

As per the aforesaid directions, formal orders in Form No. CAA-7 of Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 be issued after the filing of the Schedule of Properties within three weeks from the date of receiving a certified copy of this order by the petitioners.

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 Company Petition CP (CAA) No. 28/Chd/CHD/2021 is allowed and disposed of accordingly.