1. This is a joint first motion application filed by the applicant companies namely-Ace Landcraft Realtors Private Limited-(Transferor Company No.1/Applicant Company No.1); Ace Residency Private Limited- (Transferor Company No.2/Applicant Company No.2); Mega Town Planners Private Limited- (Transferor Company No.3/Applicant Company No.3) with Star Landcraft Private Limited-(Transferee Company/Applicant Company No.4) under Sections 230 & 232 of the Companies Act, 2013 (the Act), the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, the National Company Law Tribunal Rules, 2016, and other applicable provisions, if any, in relation to the Scheme of Amalgamation of Ace Landcraft Realtors Private Limited, Ace Residency Private Limited, Mega Town Planner Private Limited with Star Landcraft Private Limited. The said Scheme is attached as Annexure-29 in VOL-7 at Page No.1123 to 1159 of the Application.
2. The Applicant Companies have prayed for dispensation of the requirement of the convening meetings of the Equity Shareholders, Preference shareholders, Secured Creditors and Unsecured Creditors of the Applicant Companies.
3. The Applicant Company No.1 is presently engaged in the business of real estate dealing in all kind of property/ housing development/ constructions, letting on hire immovable properties and all other allied activities/ services.
4. The Applicant Company No.2 is engaged in the business of real estate, property, housing development, sale, purchase of property on commission and to act as agent for purchasing, selling and letting on hire land, or houses on commission basis or broking basis and to carry on construction of civil work etc.
5. The Applicant Company No.3 is in the business of development of real estate, infrastructure projects etc and to deal in all kinds of immovable properties etc.
6. The Applicant Company No.4 is in the business of construction of residential houses, commercial buildings, flats and factory sheds and buildings and to act as builders, colonizers and civil and constructional contractors etc.
7. It is submitted that the registered offices of all the applicant companies are situated in the State of Uttar Pradesh. Hence, the jurisdiction of applicant companies lie with this Hon'ble Bench.
8. The rationale of the Scheme is given below.
(a) The Transferor Company and the Transferee Company are closely held private limited Group Companies under common management and control. All the Companies are engaged in similar business activities. The proposed amalgamation of the Transferor Companies with the Transferee Company would result in consolidation of all these Companies and pooling of their resources into a single entity.
(b) The amalgamation will enable the Transferee Company to consolidate its line of business by restructuring and re-organizing its business activities and Capital Structure;
c) The amalgamation will enable the amalgamated company to broad base their business activities under the roof of the Transferee Company;
d) The amalgamation will result in economy of scale including reduction in overhead expenses relating to management and administration in better and more productive utilization of various resources;
e) The business of the Transferor Companies can be conveniently and advantageously combined together and in general with the business of the Transferee Company concerned and will be carried on more economically and profitably under the said Scheme;
f) The said Scheme of Amalgamation will enable the establishment of a larger company with larger resources and a larger capital base enabling further development of the business of the company concerned. The said scheme will also enable the undertakings and business of the said applicant company to obtain greater facilities possessed and enjoyed by one large company compared with a number of small Company for raising capital, securing and conducting trade on favorable terms and other benefits;
g) The said scheme will contribute in furthering and fulfilling the objects of the Company concerned and in the growth and development of these businesses;
h) The said scheme will strengthen and consolidate the position of the amalgamated company and will enable the amalgamated company to increase its profitability;
i) The said scheme will enable the undertakings concerned to pool their resources and to expand their activities;
j) The said scheme will enable the Companies concerned to rationalize and streamline their management, business and finances and to eliminate duplication of work to their common advantages;
k) The said scheme will have beneficial results for the Companies concerned, their shareholders, employees and all concerned. Further the amalgamation will result in significant reduction in multiplicity of legal and regulatory compliances which at present is required to be made separately by the Transferor Companies and the Transferee Company.
9. It is stated that the Board of Directors of the Applicant Companies in their respective meetings held on 12.12.2022 have considered and unanimously approved the proposed Scheme of Amalgamation subject to sanctioning of the same by this Tribunal. The copy of resolution passed by the Board of Directors of the Applicant Companies are all annexed with the Application as Annexure No.7/Vol.1; Annexure No.13/Vol.2; Annexure No.19/Vol.3 and Annexure No.25/Vol.3 respectively, with the application.
10. The appointed date of the Scheme is 01.04.2022 as mentioned in the Para. 1.1(b) in Part I under definition of the Scheme of Amalgamation at Page No.1129 in Vol.7 which is annexed as Annexure No.29 with the application.
11. It is stated that all the Applicant Companies have filed their Audited Financial Statements as on 31.03.2022 and have also filed their Un- Audited Financial Statements (provisional) as on 31.08.2022 and the same are annexed together as Annexure No.6/Vol.1, Annexure No.12/Vol.2, Annexure No.18/Vol.3 and Annexure No.24/Vol.3 respectively, with the Application.
12. It has been stated that in terms of the provisions of Section 230(7) and Section 232(3) of the Act, the Applicant Companies have filed Certificates dated 10.01.2023 of Applicant No.1, 30.01.23 of Applicant No.2, 31.12.22 of Applicant No.3 and 30.01.23 of Applicant No.4 which are issued by their respective Statutory Auditors, certifying that the Scheme is in compliance with the Accounting Standards prescribed under Section 133 of the Act and the same are annexed as Annexure No.30/Vol.7 with Application.
13. It is has been further stated that the Report on Valuation of Shares and Share Exchange Ratio for the proposed Scheme of Amalgamation has been issued by Mr. Rajiv Sharma, Registered Valuer in respect of Securities or Financial Assets with the Insolvency and Bankruptcy Board of India (IBBI) vide registration No.IBBI/RV/03/2020/13688 and the same is annexed as Annexure No.31/Vol.7 with the Application. The following Fair Exchange Ratio has been proposed in the aforesaid Report.
"143 equity shares of Star Landcraft Private Limited, of Rs. 10/- each fully paid up for 1 (One) equity share of Ace Landcraft Realtors Private Limited of Rs. 10/- each fully paid up, resulting in allotment of 14,30,000 equity shares of the Transferee Company."
"Nil equity shares of Star Landcraft Private Limited, of Rs. 10/- each fully paid up for 1 (One) equity share of Ace Residency Private Limited of Rs. 10/- each fully paid up, being a wholly owned subsidiary of the Transferee Company, resulting in no allotment of equity shares of the Transferee Company."
"Nil equity shares of Star Landcraft Private Limited, of Rs. 10/- each fully paid up for 1 (One) equity share of Mega Town Planners Private Limited of Rs. 10/- each fully paid up, being a wholly owned subsidiary of Ace Landcraft Realtors Private Limited, resulting in no allotment of equity shares of the Transferee Company."
14. It is stated that the Scheme also takes care of the interests of the workmen and staff (employees) of the Companies, by virtue of Paragraph 7 of the Part II of the Scheme (Annexure - 29/Vol.7) of this application.
15. It is submitted by the Ld. Counsel during the course of hearing that the Scheme of Amalgamation will not attract the provisions of the Competition Act, 2002. Hence, no intimation to / approval from the Competition Commission of India (CCI) is required for the present Scheme of Amalgamation.
16. It is also submitted and deposed that there are no legal proceedings, inquiry, inspection, investigation, prosecution, litigation pending before any court of law or Tribunal against any of the Applicant Companies. Further it is also submitted that no winding up application has been filed against any of the Applicant Companies and there are no liquidation proceedings against any of the Applicant Companies and none of the Applicant Companies are facing any CIRP process nor any of Applicant Companies have been struck off from Registrar of Companies.
17. The applicant companies have furnished the following documents: -
a) Audited Financial Statement as on 31.03.2022 and Unaudited Financial Statement (Provisional) as on 31.08.2022 of the Applicant Companies (Annexure No.6/Vol.1, Annexure No.12/Vol.2, Annexure No.18/Vol.3 and Annexure No.24/Vol.3 respectively, with the Application.).
b) List of Equity and Preference Shareholders of applicant companies duly certified by the Chartered Accountant along with respective consent affidavits of equity shareholders approving the Scheme and dispensing with the requirement to convene the meeting. (Annexure No.8/Vol.1, Annexure No.14/Vol.2, Annexure No.20/Vol.3 and Annexure No.26/Vol.3 respectively, with the Application.).
c) List of Secured Creditors of the applicant companies duly certified by the Chartered Accountant (Annexure No.9/Vol.1, Annexure No.15/Vol.2, Annexure No.21/Vol.3 and Annexure No.27/Vol.3 respectively, with the Application.).
d) List of Unsecured Creditors of the applicant companies duly certified by the Chartered Accountant (Annexure No.10/Vol.2, Annexure No.16/Vol.2, Annexure No.22/Vol.3 and Annexure No.28/Vol.3-6 respectively, with the Application.).
e) Certified true copy of extract of the minutes of the board resolution of the applicant companies approving the Scheme. (Annexure No.7/Vol.1, Annexure No.13/Vol.2, Annexure No.19/Vol.3 and Annexure No.25/Vol.3 respectively, with the Application.).
f) Valuation Report specifying the proposed Share Exchange Ratio and indicating the fair value of equity share (Annexure No.31/Vol.7 with the Application.).
g) Proposed Scheme of Amalgamation (Annexure No.29/Vol.7 with the Application.).
h) Certificates of Statutory Auditors to the effect that accounting treatment proposed in the Scheme is in conformity with Section 133 of Companies Act, 2013 (Annexure No.30/Vol.7 with the Application.).
18. That the Applicant Companies have furnished the details of the Equity and preference Shareholders, Secured Creditors and Unsecured Creditors along with their consent affidavits, as the case may be, as per the following detail:
19. The Ld. Counsel of the applicant companies thus prayed that Tribunal may be pleased to dispense with convening and holding of the meeting of the Equity Shareholders, the Preference Shareholder, the Secured and Unsecured Creditors of the Applicant Companies.
Heard the arguments of the Learned Counsel for the Applicant Companies and perused the documents annexed to the application.
20. Accordingly, the directions of this Bench in the present case are as under:
i. In relation to the Transferor Company No 1 /Applicant Company No.1:
a) The meeting of the Equity Shareholders of Transferor Company No.1/Applicant Company No. 1 is dispensed herewith, keeping in view that all Equity Shareholders have given their consents by way of affidavits.
b) Since, there are no Secured Creditors in the Transferor Company No.1/Applicant Company No. 1, the requirement of convening the meeting Secured Creditors does not arise.
c) The meeting of the Unsecured Creditors of the Transferor Company No.1/Applicant Company No. 1 is dispensed herewith, keeping in view that all Unsecured Creditors have given their consents by way of affidavits.
ii. In relation to the Transferor Company No 2 /Applicant Company No.2:
(a) The meeting of the Equity Shareholders of Transferor Company No 2/ Applicant Company No. 2 is dispensed herewith, keeping in view that all Equity Shareholders have given their consents by way of affidavits.
(b) Since, there are no Secured Creditors in the Transferor Company No 2/ Applicant Company No.2, the requirement of convening the meeting Secured Creditors does not arise.
(c) The meeting of the Unsecured Creditors of the Transferor Company No.2/Applicant Company No.2 is dispensed herewith, keeping in view that Unsecured Creditors constituting 99.8% of the total value have given their consents by way of affidavits.
iii. In relation to the Transferor Company No.3/Applicant Company No.3:
(a) The meeting of the Equity Shareholders of Transferor Company No.3/ Applicant Company No.3 is dispensed herewith, keeping in view that all Equity Shareholders have given their consents by way of affidavits.
(b) Since, there are no Secured Creditors in the Transferor Company No 3/ Applicant Company No.3, the requirement of convening the meeting Secured Creditors does not arise.
(c) The meeting of the Unsecured Creditors of the Transferor Company No.3/Applicant Company No.3 is dispensed herewith, keeping in view that Unsecured Creditors constituting 96.6% of the total value have given their consents by way of affidavits.
iv. In relation to the Transferee Company/Applicant Company No.4:
(a) The meeting of the Equity Shareholders of Transferee Company/ Applicant Company No.4 is dispensed herewith, keeping in view that all Equity Shareholders have given their consents by way of affidavits.
(b) The meeting of the Preference Shareholder of Transferee Company/ Applicant Company No.4 is dispensed herewith, keeping in view that the sole preference shareholder has given its consent by way of affidavit.
(c) The meeting of the Secured Creditors of Transferee Company/ Applicant Company No.4 is dispensed herewith, keeping in view that all the secured creditors have given their consents by way of affidavits.
(d) The meeting of the Unsecured Creditors of the Transferee Company/Applicant Company No.4 is dispensed herewith, keeping in view that the unsecured creditors constituting 99.4% have given their consents by way of affidavits.
21. In view of the above, the First Motion Application stands allowed by giving liberty to the Applicant Companies to file Second Motion Petition as per law, with a direction that the Applicant Company shall make specific prayer for sending notices to the (a) the Central Government through the office of the Regional Director, Northern Region, Ministry of Corporate Affairs, New Delhi; (b) the Registrar of Companies, Uttar Pradesh, Ministry of Corporate Affairs, Kanpur; (c) The Official Liquidator, Uttar Pradesh, Allahabad; (d) the Income Tax Department by disclosing the PAN numbers of the Applicant Companies as mentioned in the Memo of Parties of the Second Motion Petition; and (e) The office of RERA pertaining to the place where the registered office of the company is located.
22. The Company Petition for confirmation of the Scheme is to be filed within the time period prescribed under the provisions of the Act and corresponding rules made thereunder.
23. That appropriate prayer would also be made in the second motion petition for publication in newspaper.
24. With the aforesaid directions, the First Motion Application bearing CA (CAA) No.04/ALD/2023 is disposed of accordingly.
25. Certified copy of this order, if applied or, be supplied to the parties, subject to compliance with all requisite formalities.
