This is the Second Motion Petition for sanction of the Scheme of Amalgamation (for brevity the Scheme) of RMZ Infratech Private Limited (Transferor/Petitioner Company No. 1) hereinafter called the Petitioner Company No. 1 and Vital Construction Private Limited (Transferor/Petitioner Company No. 2) (hereinafter called the Petitioner Company No. 2 and collectively referred to as Petitioner/Transferor Companies, with RMZ Infotech Private Limited (referred to as Transferee Company), their Shareholders and Creditors. The petition was received by transfer from the Honble Punjab and Haryana High Court in terms of Rule 3 of the Companies (Transfer of Pending Proceedings) Rules, 2016. Therefore, the Companies (Compromises, Arrangements and Amalgamation) Rules, 2016 (here-in-after referred to as the Rules) would now be applicable.

2.The registered offices of Petitioner Companies are situated at Gurgaon in the State of Haryana and therefore, the matter falls within the jurisdiction of this Tribunal. The registered office of the Transferee Company is situated at Bangalore in the State of Karnataka and for that Transferee Company had filed separate company petition numbered CAA No. 19/BB/2017 connected with TP No. 285/2017 and Company application no. 652 of 2016 for approval of the Scheme before the jurisdictional National Company Law Tribunal, Bangalore Bench in Karnataka, for the reasons stated therein. The company petition was initially filed with the Honble High Court of Karnataka at Bangalore and pursuant to the coming into force of the Companies (Transfer of Pending Proceedings) Rules, 2016 it was transferred to the Bangalore Bench of the Tribunal.

3.The Petitioner Company No. 1 was incorporated on 18.09.2014 with the Registrar of Companies, NCT of Delhi and Haryana vide certificate of incorporation, Annexure P-1 at page 22 of the paper book. The Memorandum and Articles of Association have also been annexed as Annexure P-1.

4.The Petitioner Company No. 2 was originally incorporated on 27.01.2004 with the Registrar of Companies, NCT of Delhi and Haryana vide certificate of incorporation, Annexure P-3 at page 97 of the paper book. The registered office of the company was transferred from National Capital Region of Delhi to the State of Haryana for which revised certificate was issued on 16.05.2016 by the Registrar of Companies, NCT of Delhi and Haryana. The Memorandum and Articles of Association of Petitioner Company No. 2 have also been annexed as Annexure P-3.

5.It is stated that the Board of Directors of Petitioner Company No. 1, Petitioner Company No. 2 and Transferee Company approved the proposed Scheme vide their respective Board Resolutions all dated 31.08.2016, Annexure P-8 to P-10 respectively. Copies of the audited account statement of the Petitioner Companies and Transferee Company for the year ending 31.03.2016 are at Annexure P-2, P-4 and P-6 respectively.

6.As on 31.03.2016, the share capital of the Petitioner No. 1 is as under:

Particulars

Amount (Rs.)

Authorized Share Capital

2,50,00,000 Equity Shares of Rs. 10/- each

25,00,00,000/-

Issued, Subscribed & Paid-up Capital

2,50,00,000 Equity Shares of Rs. 10/- each fully paid up

25,00,00,000/-

7.Similarly, as on 31.03.2016, the share capital of the Petitioner No. 2 is as under:

Particulars

Amount (Rs.)

Authorized Share Capital

65,00,000 Equity Shares of Rs. 10/- each

6,50,00,000

Issued, Subscribed & Paid-up Capital

13,476 equity shares of Rs. 10 each fully paid-up

1,34,760

8.It is stated that there has been no material change in the share capital of Petitioner Companies till the date of filing of the petition.

9.The Transferee Company was incorporated in the State of Andhra Pradesh on 25.11.2003 and the registered office was changed to Karnataka for which the fresh certificate of registration was issued by the Registrar of Companies, Karnataka on December 21, 2006. Certificate of incorporation alongwith the Memorandum and Articles of Association of Transferee Company are at Annexure P-5 (Colly).

10.The authorized, issued, subscribed and paid up Share Capital of the Transferee Company as on 31.03.2016 is described as below

Particulars

Amount Rs.

Authorized Share Capital

65,00,00,000 equity shares of Rs. 10/- each

6,50,00,00,000/-

Issued, Subscribed and Paid-Up Capital

Amount Rs.

41,90,70,571 equity shares of Rs. 10/- each fully paid-up

4,19,07,05,710/-

11.It is stated that Petitioner Companies are wholly owned subsidiaries companies of Transferee Company and there would be no arrangement and compromise involved with the secured creditors and unsecured creditors of Petitioner Companies and Transferee Company respectively and their rights shall remain unaffected by the proposed Scheme. It has also been stated that upon sanctioning the Scheme the entire paid up share capital of Petitioner Companies shall stand cancelled. Further, it has also been stated that the proposed Scheme does not affect the rights of any of the members or creditors of Transferee Company and also does not involve reorganization of share capital of the Transferee Company.

12.The First Motion Petition, CP No. 186 of 2016 filed before the Honble Punjab and Haryana High Court was disposed of vide order dated 18.10.2016 (Annexure P-11), wherein calling and convening of the meetings of Shareholders, Unsecured Creditors of both Petitioner Companies and meeting of secured creditors of Petitioner No. 2 Company was also dispensed with. Further, as there were no secured creditors of Petitioner Company No. 1, therefore, no meeting was required.

13.The main objects of the Petitioner Company No. 1 are to carry on the business of developers of land, builders, contractors, erectors, constructors of buildings, houses, apartments, structures of residential, office, industrial, institutional or commercial or developer of co-operative housing societies, developers of housing schemes, townships, holiday resorts, hotels, motels, business park, apartment hotels, city clubs, sports and recreational clubs, Industrial Township, business centers, forming sites and to engage in the business of constructing, reconstructing, erecting, altering, improving, enlarging, developing, decorating, furnishing and maintaining of structures, flats, houses, factories, shops, offices, garages, warehouses, buildings, workshops, hospitals, nursing homes, clinics, godowns and other buildings for commercial, residential or educational purposes and conveniences etc.

14.The main objects of Petitioner Company No. 2 are to carry on the business as builders, town planners, colonizers, real estate developers, promoters of residential houses and commercial properties, hotels, resorts, hospitals, educational institutions, recreational facilities and all other types of erection & commissioning of projects and to undertake and to carry on the business of developing any type of plot whether residential, commercial, industrial, rural or urban that may belong to the Company or any person of whatever nature and sell/transfer the developed property etc.

15.The main objects of Transferee Company are to carry on the business of developing, operating, maintaining and providing infrastructural facilities to various sectors by setting up Industrial Parks, Software Technology Parks, Hardware Technology Parks, Bio-Technology Parks, Special Economic Zones [SEZs], Information Technology Parks, Export Oriented Undertakings [EOUs] and other Training Centres and Institutions in India and abroad and also to purchase, sell, lease, exchange or otherwise deal in land and building for the said purpose and to carry on the Research & Development Programme for extending the benefits of Information Technology to other manufacturing industries in the core sector and service industries by application of improved Production and Productivity Techniques, Process Controls, Quality Control Techniques, Cost Control and Reduction Techniques with the help of specialized and improved innovative software programmes and to achieve the same, develop the industrial estates in such a way which can have all the facilities to computerize the production programmes and also to invest in and contribute to the capitals of those companies and corporates which intend to venture with the new IT Initiatives developed by the Company to aid the production and quality controls etc.

16.The Scheme also provides that upon the Scheme coming into effect, all staff, workmen and employees of the Transferor Companies in service, if any, on the Effective Date shall be deemed to have become staff, workmen and employees of the Transferee Company with effect from the Effective Date without any break and interruption in their service and on the terms and conditions not less favourable than those which were applicable to them with the Transferor Companies.

17.It is further stated that the Scheme provides for amalgamation of entire business of the Petitioner Companies with the Transferee Company. The Scheme would consolidate the like business of the Group to enhance value of shareholders and to optimize and reduce the operational and other costs associated with running of multiple group companies within the same industry and management. It was stated that since the Petitioner Companies and Transferee Company are under the same management and operates in the same industry, the amalgamation would bring synergies in the business operations.

18.The salient features of the Scheme are as follows:

(a) The appointed date under the Scheme is April 1, 2016.

(b) Consolidation of like businesses of the group to enhance value to shareholders;

(c) Transferor Companies and Transferee Company are under common control and management and operate in the same industry i.e. construction and development industry. The main purpose of the amalgamation is to optimize and reduce the operational and other costs associated with running of multiple group companies within the same industry and under the same management. Further as they operate in the same sector, the amalgamation would bring in synergies in the operations of the Transferor Companies and the Transferee Company;

(d) The amalgamation will simplify the group structure which would in turn improve the organizational capacity;

(e) This Scheme is in the best interests of the shareholders and creditors of the Transferor Companies and the Transferee Company, and they shall not be prejudiced by the Scheme. The Scheme does not seek any waiver of any rights or outstanding obligations towards the creditors and shareholders of the Transferor Companies or the Transferee Company.

19.It has also been highlighted that with the Scheme becoming effective, there would not be a reorganization of share capital nor the Scheme would affect the rights of the members or creditors of the Transferee Company. The net worth of the Transferee Company is Rs. 1290.66 Crores as on 31.03.2016, which is more than sufficient to meet the aggregate liabilities of Petitioner Company No. 1 and 2 respectively and Transferee Company.

20.The contents of the application are supported by affidavits of Mr. Deepak Chhabria, Director of Transferor/Petitioner Company No. 1 and G. Madhusudhana, Director of Company No. 2.

21.When the matter was listed before the Honble High Court on 29.11.2016, notice of the petition was directed to be issued to the Regional Director, Ministry of Corporate Affairs, New Delhi and the Official Liquidator. The notice were also directed to be published in the Indian Express (English) and Jan Satta (Hindi) both Delhi/NCR Editions and the Official Gazette of Government of Haryana. It was also directed that the notice be uploaded on the website of Official Liquidator. Further, this Tribunal on 23.05.2017, directed to publish the notice in the above mentioned newspapers, in official gazette of Govt. of Haryana and also to upload the same on the official website of Official Liquidator. The reports of the Official Liquidator and that of Mr. Mahesh Kumar, Regional Director, Incharge, Northern Region, Ministry of Corporate Affairs, by way of affidavit have been filed in response to the notice served upon the concerned Statutory Authorities.

22.I have heard, the learned Counsel for the Petitioner Companies, the Official Liquidator himself and also the learned counsel representing the Regional Director and perused the record.

23.Affidavit dated 10.07.2017 was filed by counsel for the Petitioner Companies with regard to the publications in the newspapers dated 11.06.2017 and publication of the notice in the Official Gazette of Government of Haryana dated 27.06.2017. The newspaper cuttings and publication in Official Gazette of Haryana are at Annexures A, B and C respectively of the affidavit.

24.The learned counsel for the applicant companies has stated at bar that after the paper publications dated 11.06.2017 and in the official gazette of Haryana, dated 27.06.2017, no objections have been received by the applicant companies to the Scheme Annexure P-7.

25.On this Scheme becoming effective, the Transferee Company shall account for the amalgamation of the Transferor Companies pursuant to the Scheme in its books of accounts as required under Indian Accounting Standards (IND-AS) 103. The amount of any inter-company balances and loans or advances between the Transferor Companies and Transferee Company, if any, investment in the shares of Transferor Companies as appearing in the books of Transferee Company, shall stand cancelled without any further act or deed, upon the Scheme coming into effect and the amounts so cancelled shall not be recorded in the books of account of the Transferee Company.

26.It is stated in the affidavit of Regional Director dated 17.05.2017, Ministry of Corporate Affairs that notice of the petition was sent to the Income Tax Department for the specific comments and Petitioner Companies served copy of the petition on the Income Tax Department under whose jurisdiction the Petitioner Companies are assessed. In response to the letter dated 18.01.2017 sent by Regional Director to the Income Tax Department, the Regional Director received letter dated 17.02.2017 with respect to Petitioner Company No. 1 from the Income Tax Authority, stating that there does not appear to be any loss of revenue and that any pending tax proceedings be continued in the name of the Transferee Company. Copy of the letter received from the Income Tax Authorities was attached with the affidavit of the Regional Director.

27.Similarly, pursuant to letter sent to the Income Tax Department in respect of petitioner No. 2 company, the Regional Director received a letter dated 20.02.2017 from Income Tax Department stating that there was no demand outstanding against the said company.

28.It is admitted by the learned counsel appearing for the Official Liquidator and representing the Regional Director, Northern Region, Ministry of Corporate Affairs, New Delhi that no adverse comments have been raised in the reports filed by them. With regard to the comments of the Income Tax Department, a reference is made to the letters received from the Income Tax Department/Assessing Officer of both the companies at page 15 & 17 of the document forming part of the affidavit of Regional Director that there is no revenue loss to the Income Tax Department with the Scheme of Merger and further that the income tax upto date stands paid. With regard to the Transferee Company, the registered office is situated in the State of Karnataka and a separate petition is pending before NCLT, Bengluru and copy of the petition has been attached by the petitioner with the affidavit of the authorised representative of both the companies.

29.There is also a reference to the compliance of the provisions of FEMA & RBI guidelines, which according to the learned counsel for the petitioner, pertains to the Transferee Company, but in any case, the petitioner companies are bound to follow the provisions of the law pertaining to FEMA and the RBI guidelines, as applicable in this case.

30.The Official Liquidator has submitted his report, in which he has referred to the observations of Chartered Accountant who was appointed to scrutinize the books of accounts of the Petitioner Companies. The observations made by the Chartered Accountant has been given in detail along with the response submitted by the Official Liquidator. The Official Liquidator has stated that the affairs of the Transferor Companies have not been conducted in a manner prejudicial to the interest of the members, creditors or to the public interest or Income Tax.

31.The Regional Director in its affidavit had stated that after examining the Scheme and the reply of the Petitioner Companies, the deponent is inclined to accept the report of Registrar of Companies and have no objection except for the observation made in the affidavit. The authorized representatives of the Petitioner Companies have filed their affidavits dated 11.07.2017 in response to the observation/comments made by Regional Director. It is stated in the affidavits that the observations made by Regional Director in Para No. 9 of its affidavit relates to Transferee Company, which is subject to the jurisdiction of National Company Law Tribunal, Bengaluru and therefore, shall not be a subject matter for the Regional Director, Northern Region, New Delhi. Undertaking was given by Petitioner Companies that if any provisions of FEMA/RBI have to be complied with same shall be complied with as may be applicable. It was further mentioned in the affidavits that no prosecution proceedings are pending either against the Companies or their Directors under the provisions of the Companies Act, 2013.

32.In view of the above, there is no impediment in the sanction of the Scheme. The Scheme (annexure P-7) is approved. 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, and payment in accordance with law or in respect to any permission/compliance with any other requirement which may be specifically required under any law. With the sanction of the Scheme, the entire paid up share capital of Transferor/Petitioner Company No. 1 and Transferor/Petitioner Company No. 2 shall stand cancelled and the proposed Scheme does not affect the rights of any of the members or creditors of the Transferee/Non-Petitioner Company and also does not involve reorganization of the share capital of the Transferee/Non-Petitioner Company.

THIS TRIBUNAL DO FURTHER

i) That all other properties, rights and powers of the Petitioner/Transferor Companies without further act or deed shall pursuant to Section 230232 of the Companies Act, 2013 be transferred to and vested in the Transferee Company for all the estate and interest of the Transferor - Companies No. 1 and 2 respectively therein but subject nevertheless to all the charges now effecting the same; and

ii) That all the liabilities and duties of the Transferor Company No. 1 and 2 respectively be transferred without further act or deed to the Transferee Company and accordingly the same shall in pursuance of Section 230-232 of the Act be transferred and become the liabilities and duties of the Transferee Company; and

iii) That all proceedings now pending by or against the Transferor Company No. 1 and 2 respectively be continued by or against the Transferee Company; and

iv) That all the employees of the Transferor Companies No. 1 and 2 respectively shall be transferred to the Transferee Company in terms of the Scheme; and

v) That the Transferor 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 for registration and on such certified copy being so delivered the Transferor Company No. 1 and 2 shall be dissolved without being wound up and the Registrar of Companies shall place all the documents relating to Transferor Company No. 1 and 2 respectively registered with him and transfer the aforesaid documents to the Registrar of Companies where the Transferee Company has its registered office for consolidation of the files relating to all the three companies; and

vi) That the Transferor Company No. 1 shall deposit an amount of Rs. 60,000/-/- (Rupees Sixty Thousand only) with the Official Liquidator within a period of five weeks from the date of receipt of this order; and

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

33.However, this order of sanction of the Scheme will be subject to the sanction by the National Company Law Tribunal, Bangluru in respect of the Transferee Company having its registered office in Karnataka.

33.As per the above directions and Form No. CAA-7 of Companies (Compromises, Arrangements and Amalgamation) Rules, 2016 formal orders be issued on the petitioners on filing of the Schedule of Property i.e. (i) freehold property of the Transferor Companies and (ii) Leasehold property of the Transferor Companies, by way of affidavit of the Transferor Companies.