Manoj Kumar Dubey, Member (T)

1. The present First Motion Application for Amalgamation is filed on 23.12.2022 by Continental Lighting India Private Limited (described in short as 'Applicant Company No. 1/Transferor Company No. 2) and Continental Automotive Components (India) Private Limited (described in short as 'Applicant Company No. 2/Transferee Company) under Sections 230 to 232 of Companies Act, 2013 r/w. Rule 3(2) of the Companies (Compromises, Arrangements, Amalgamations) Rules 2016, seeking to convene the meetings of the Equity Shareholders of the Transferor Company No. 2 and Transferee Company (Applicant Companies No. 1 & 2); to dispense with the meeting of the Unsecured Creditors of the Transferor Company No. 2 or alternatively convene the meeting of the Unsecured Creditors of the Transferor Company No. 2 and direction to convene the meeting of the Unsecured Creditors of the Transferee Company. The Scheme of Amalgamation (for short the 'Scheme') of Transferor Companies No. 1 & 2 and Transferee Company has been placed on record as Annexure-K, at Pg. 323-381 of Application.

2. The Applicant Company No. 1 (Transferor Company No. 2) namely, Continental Lighting India Private Limited was incorporated under the name and style of "Osram Continental India Private Limited" under the provisions of the Companies Act, 2013 with the Registrar of Companies, Karnataka on 28th September 2018 bearing CIN U31900KA2018FTC116935. The registered office is situated at No. 53B, Bommasandra Industrial Area, Phase I, Hosur Road, Bengaluru-560099. The copy of Certificate of Incorporation and Memorandum and Articles of Association is found attached as Annexure-A to the Application. As per the Memorandum of Association, the main objects of Applicant Company No. 1 is as follows:

"To carry out businesses including but not limited to develop, manufacture, supply and sell lighting functions (visible and non-visible) and developments, derivatives as well as substitutes thereof for motor driven vehicles in particular automotive lighting as well as any activities ancillary thereto."

3. The authorised, issued, subscribed and paid up share capital of the Applicant Company No. 1 as on date of this application is as follows:

4. The Applicant Company No. 2 (Transferee Company) namely, Continental Automotive Components (India) Private Limited was incorporated on 15th June 2007 under the provisions of the Companies Act, 1956/2013 with a CIN No. U72900KA2007PTC043146 and having its registered office at Plot No. 53B, Bommansandra Industrial Area, Attibele Hobli, Anekal Taluk, Bengaluru - 560099. The copy of Certificate of Incorporation, Memorandum and Articles of Association of Association of Applicant Company No. 2 is produced at Annexure-D of the Application. As per the Memorandum of Association, the main object of the Applicant Company No. 2 is as follows:

"to design, develop, manufacture, buy, sell, lease, hire, purchase, distribute, assemble, export, import, repair all precision instruments, components, systems including panel instruments, body, chassis and interior components/systems for automobiles and vehicles of all descriptions, garage equipments, tools and machineries of all descriptions"

5. The authorised, issued, subscribed and paid-up share capital of the Applicant Company No. 2 as on the date of this application:

6. The Non-Applicant Company/Transferor Company No. 1 namely, Continental Automotive Brake Systems (I) Private Limited is a company incorporated under the name and style of "Continental Rico Hydraulic Brakes India Private Limited" under the provisions of the Companies Act, 1956/2013 with the Registrar of Companies, Delhi and Haryana and Certificate of Incorporation was obtained on 3rd January 2008 bearing CIN No. U74900HR2008PTC037519. The Registrar of Companies, New Delhi and Haryana has issued a certificate dated 4th May 2012, pursuant to the change in name of the company to Continental Automotive Brake Systems (I) Private Limited. The Registered office of the Transferor Company No. 1 is currently situated at Plot No. 179-180, Sector-5 IMT Manesar, Gurgaon-122050, Haryana. The copy of Certificate of Incorporation, Memorandum and Articles of Association of Association of Transferor Company No. 1 is produced at Annexure-G of the Application. As per the Memorandum of Association, the main object of the Applicant Company No. 2 is as follows:

"to manufacture, produce, prepare, develop, repair, export, import, purchase, sell and generally carryon business in the manufacture, sale and supply of brakes of all descriptions including frictional, dynamic, slipper, mechanical, magnetic, vacuum servo, hydraulic, electronic, bandbrakes, electro-mechanical and other power brakes, railway and tramcar brakes, hand, post and load brakes and running rakes in India and abroad".

7. The preamble of the proposed Scheme reads as under:-

"This Scheme of Amalgamation (the scheme) is presented pursuant to Section 230 to 232 and other applicable provisions of the Companies Act, 2013 (including any statutory modification or re-enactment thereof, for the time being in force) for amalgamation of Continental Automotive Brake Systems (I) Private Limited ("Continental Brakes" or "Transferor Company No. 1") and Continental Lighting India Private Limited ("Continental Lighting" or Transferor Company No. 2") with Continental Automotive Components (India) private Limited ("Continental Automotive" or Transferee Company") and Section 2(1B) and other related provision of the IT Act.

8. The Board of Directors of the Transferor Companies No. 1 & 2 and Transferee company have approved the Scheme vide their respective Board Resolutions dated 12.12.2022 and 13.12.2022 subject to the sanctioning of the same by this Tribunal. The aforesaid Board Resolutions of the Transferor Companies No. 1 & 2 and Transferee Company are at Annexure-J respectively of the Application.

9. The Appointed date as stated in the Scheme," appointed date means the open of business on 1st April 2022 or such date as may be determined by the Board of Directors of the Transferor Companies, and the Transferee Company or such other time and date as the Tribunal may fix or direct".

10. The instant Application has been by the Applicant Companies for the following reliefs:

i. To pass necessary direction/order as it deemed fit for the purpose of convening the meetings of the equity shareholders of the Transferor Company No. 2 and Transferee Company to be held physically or through Video Conference (VC) or other Audio Visual means (OAVM) on such date and time as this Hon'ble Tribunal may deem fit and that a Chairman and Scrutinizer be appointed for that meeting and pass necessary directions with regard to issue of notice through post, courier or e-mail ids for convening and conducting of the meeting and that a Chairman and Scrutinizer be appointed for that meeting and pass necessary directions with regard to issue of notice, convening and conducting of the meetings;

ii. To pass necessary direction/order as it deemed fit for the purpose of Convening meeting of the unsecured Creditors of the Transferee Company to whom INR 5,00,000 (Indian Rupees Five Lakh only) or more is payable to be held physically or through Video Conference (VC) or other Auditor Visual Means (OAVM) on such date and time as this Hon'ble Tribunal may deem fit and that a Chairman and Scrutinizer be appointed for that meeting and pass necessary directions with regard to issue of notice through post, courier or e-mail ids for convening and conducting of the meeting and that a Chairman and Scrutinizer be appointed for that meeting and pass necessary directions with regard to issue of notice, convening and conducting of the meetings;

iii. To dispense with the meeting of the Unsecured Creditors of the Transferor Company No. 2 or alternatively convene the meeting the meeting of the Unsecured Creditors of Transferor Company No. 02 to whom INR 5,00,000 (Indian Rupees Five Lakh only) or more is payable to be held physically or through Video Conference (VC) or other Auditor Visual Means (OAVM) on such date and time as this Hon'ble Tribunal may deem fit and that a Chairman and Scrutinizer be appointed for that meeting and pass necessary directions with regard to issue of notice through post, courier or e-mail ids for convening and conducting of the meeting and that a Chairman and Scrutinizer be appointed for that meeting and pass necessary directions with regard to issue of notice, convening and conducting of the meetings;

iv. To pass necessary direction for publication of notice in one English newspaper i.e., 'The Financial Express' Bangalore edition (English daily) and one vernacular newspaper i.e., 'Samyukta Karnataka' Bangalore Edition (Kannada Daily) and

v. Pass such further and other orders as may be deemed fit and proper by the Hon'ble Tribunal.

11. The Learned PCS for the Applicant Company No. 1 submitted that as per Certificate dated 13.12.2022 (Annexure M of the Application) issued by Ankh and Associates, Chartered Accountants, the number of equity shareholders of the Applicant Company No. 1 as on 30.11.2022 is as under:

12. It is submitted that as per CA Certificate dated 13.12.2022 issued by Ankh and Associates, Chartered Accountants, there are no Secured Creditors in the Applicant Company No. 1 as on 30.11.2022. Further, as per CA Certificate dated 13.12.2022 there are 8 (eight) Unsecured Creditors in the Applicant Company No. 1 as on 30.11.2022. The CA certificates dated 13.12.2022 are attached as Annexure-'N' & 'P' to the application. Further, the Learned PCS has filed a Memo vide Diary No. 319 dated 17.01.2023 producing the consent affidavits of three (3) Unsecured Creditors out of Eight (08) Unsecured Creditors which constitutes 92.32% in value; along with C.A. Certificate from Ankh & Associates, Chartered Accountants and seeks for the dispensation of the meeting of the Unsecured Creditors of the Applicant Company No. 1/Transferor Company No. 2.

13. The Learned PCS for the Applicant Company No. 2/Transferee Company submitted that as per Certificate dated 15.12.2022 (Annexure-Q of the Application) issued by Shivakumara swamy and Associates, Chartered Accountants, the number of equity shareholders of the Applicant Company No. 2 as on 30.11.2022 is as under:

14. It is submitted that as per Certificate dated 15.12.2022 (Annexure R of the Application) issued by Shivakumara swamy and Associates, Chartered Accountants, there are no Secured Creditors in the Applicant Company No. 2 as on 30.11.2022. Further, as per CA Certificate dated 20.12.2022 there are 506 (five Hundred and Six) Unsecured Creditors in the Applicant Company No. 2. The CA certificate dated 15.12.2022 and 20.12.2022 are attached as Annexure-R & S to the application.

15. The Learned PCS for the Applicant Companies submits that the Certificate of the Auditors have been filed stating that the Accounting Treatment contained in the Scheme is incompliance with all the applicable Accounting Standards as notified under Section 133 of the Companies Act, 2013 with effect from appointed date, and other generally accepted accounting principles, as applicable. The Certificates dated 21.12.2022 are attached as Annexure - T to the Application.

16. It is submitted that the affidavit dated 22.12.2022 is filed by Authorised representative of the Applicant companies stating that the Applicant Companies are not subjected to any kind of legal prosecutions or proceedings thereof and not filed any other application under Section 230 to 232 of the Companies Act, 2013 with any adjudicating authorities. The affidavit filed by the Authorised Representative of the Applicant Companies is attached as Annexure - W of the application.

17. The Rationale of Scheme as given in the scheme is as follows:

a. Achieve greater integration and greater financial strength and flexibility for the combined entity leading to stronger negotiation power in the market and strengthened leadership in the industry.

b. Achieve business synergies on account of consolidation of related/duplicated processes, including consolidation of Plant/Manufacturing infrastructure, consolidation of support services divisions within these entities, eliminate inter company transactions, cost optimization etc.

c. Achieve greater efficiency in cash management and unfettered access to large cash flows, effective and centralized management of funds generated by the combined business which can be deployed more efficiently to fund larger projects with a stronger platform and strengthen brand visibility.

18. The Learned PCS for the Applicant Companies submitted that the Applicant Companies have filed their audited financial statements for the year ending 31.03.2022 and provisional financial statements for the period between 01.04.2022 to 30.11.2022. The Audited and provisional financial statements are found attached as Annexure B, C, E & F of the Application.

19. It is further submitted that the affidavits dated 22.12.2022 of the Authorised Representative of the Applicant Companies have been filed stating the scheme does not envisage for capital reduction for the equity share capital of the Transferor Companies or Transferee Company and does not provide for any kind of arrangement with the outside creditors of Transferor Company No. 2 and Transferee Company and thereby Corporate Debt Restructuring with regard to outside creditors is not applicable to the scheme.

20. It is submitted that an affidavit dated 22.12.2022 of the authorised Representatives of the Applicant Companies have been filed stating that Companies are not regulated by any sectoral regulators with whom the application and scheme needs to be filed before or after filing of the company application and scheme under Section 230 of the Companies Act, 2013. Further, after the filing of the company application under Section 232 of the Companies Act, 2013 notice of the petition to be issued to certain regulatory authorities such as (a) The Regional Director, South-East Region (b) The Registrar of Companies, MCA (c) The Office of the Official Liquidator (d) The Income Tax Department. The affidavit dated 22.12.2022 filed by the Authorised Representative of the Applicant Companies is attached Annexure - U of the application.

21. Clause 9.1 of the Scheme states that, on the scheme becoming effective, all the executives, staff, workmen and other employees if any in the service of the Transferor Company No. 1 shall become the executives, staff, workmen, and other employees of the Transferee company.

22. We have heard the learned PCS for the Applicant Companies and have perused the records and the supporting documents/papers filed along with the "Scheme" contemplated by the Applicant Companies with the assistance of learned PCS for the Applicant Companies.

23. In view of the above, following directions are issued with respect to dispensation or calling and convening various meetings, as well as issuance of notices including by way of publication in newspaper:

a) Since 03 (three) Unsecured Creditors of the Transferor Company No. 2/Applicant Company No. 1 constituting 92.32% of the total value have given consent to the Scheme, the meeting of the Unsecured Creditors of the Transferor Company No. 2 is dispensed with.

b) Since there are Nil Secured Creditors in the Transferor Company No. 2 and Transferee Company, there is nothing to convene their meeting.

c) Meeting of the Equity Shareholders of the Transferor Company No. 2 is to be convened on 24th April 2023, at 10.30 A.M. through Video Conferencing or Other Audio Visual Means (OAVM) as per the guidelines issued by MCA or through physical meeting, subject to the notice of the meeting being issued through post or electronic mode. The quorum of the meeting of the Equity Shareholders shall be as prescribed under section 103 of the Companies Act, 2013.

d) In case the required quorum as noted above for the meetings of the Equity Shareholders of the Transferor Company No. 2 is not present at the commencement of the meetings, the respective meetings shall be adjourned by 30 minutes, and thereafter, the persons present and voting shall be deemed to constitute the quorum. For the purpose of completing the quorum, the valid proxies and Authorized Representatives shall also be considered, if the proxy in the prescribed form, duly signed by the person entitled to attend and vote at the meeting, is filed through email or otherwise at the respective registered office of the Transferee Company. The Chairperson along with Scrutinizer shall ensure that the proxy register is properly maintained. The Scrutinizer is also duty bound to record all proceedings of the meeting conducted through Video Conference.

e) Meeting of the Equity Shareholders of the Transferee Company is to be convened on 24th April 2023 at 11.00 A.M. through Video Conferencing or Other Audio Visual Means (OAVM) as per the guidelines issued by MCA or through physical meeting, subject to the notice of the meeting being issued through post or electronic mode. The quorum of the meeting of the Equity Shareholders shall be as prescribed under section 103 of the Companies Act, 2013.

f) In case the required quorum as noted above for the meetings of the Equity Shareholders of the Transferee Company is not present at the commencement of the meetings, the respective meetings shall be adjourned by 30 minutes, and thereafter, the persons present and voting shall be deemed to constitute the quorum. For the purpose of completing the quorum, the valid proxies and Authorized Representatives shall also be considered, if the proxy in the prescribed form, duly signed by the person entitled to attend and vote at the meeting, is filed through email or otherwise at the respective registered office of the Transferee Company. The Chairperson along with Scrutinizer shall ensure that the proxy register is properly maintained. The Scrutinizer is also duty bound to record all proceedings of the meeting conducted through Video Conference.

g) Meeting of the Unsecured Creditors of the Transferee Company is to be convened on 24th April 2023 at 11.30 A.M. through Video Conferencing or Other Audio Visual Means (OAVM) as per the guidelines issued by MCA or physical meeting, subject to the notice of the meeting being issued through post or electronic mode. The quorum of the meeting of the Unsecured Creditors shall be 40% in total value either personally present or through proxy.

h) In case the required quorum as noted above for the meetings of the unsecured creditors of the Transferee Company is not present at the commencement of the meetings, the respective meetings shall be adjourned by 30 minutes, and thereafter, the persons present and voting shall be deemed to constitute the quorum. For the purpose of completing the quorum, the valid proxies and Authorized Representatives shall also be considered, if the proxy in the prescribed form, duly signed by the person entitled to attend and vote at the meeting, is filed through email or otherwise at the respective registered office of the Transferee Company. The Chairperson along with Scrutinizer shall ensure that the proxy register is properly maintained. The Scrutinizer is also duty bound to record all proceedings of the meeting conducted through Video Conference.

i) Shri Anirudh Suresh Adv. having address at 273, Ramaiyengar Road, V.V. Puram, Bengaluru - 560004 email id anirudh@anirudhassociates.com Mobile No. 9740133639 is appointed as the Chairperson for the above meetings. He shall be paid fee of Rs. 1,00,000/- (Rupees One Lakh) for his services as the Chairperson. Shri Raghavendra Naveen B.K. having address at No. 17, 2nd Cross, Sachidanand Nagar, Near Robin Theatre, Kengeri Upanagar, Bengaluru - 560 060 email ID support@raoandassociates.co.in, Mobile No. 9916667966 is appointed as the Scrutinizer for the above meetings. He shall be paid fee of Rs. 60,000/- (Rupees Sixty Thousand only) for his services as the Scrutinizer.

j) It is further directed that individual notices of the said meeting shall be sent by the Applicant Companies to the respective Equity Shareholders and Unsecured Creditors through registered post or speed post or through courier or through electronic mode, 30 days in advance before the scheduled date of meeting, indicating the day, date, time and link to the meeting if meeting is conducted through Video Conference as aforesaid, together with a copy of the Scheme, copy of explanatory statement required to be sent under the Companies Act, 2013 and the applicable Rules, along with the proxy forms and any other documents as may be prescribed under the Act shall also be duly sent with the notice.

k) It is further directed that along with the notice Applicant Companies shall also send statement explaining the effect of the Scheme on the Shareholders and Creditors, key managerial personnel, promoters and non-promoter members etc., along with effect of the arrangement for amalgamation on any material interests of the Directors of the Company as provided under sub-section 3 of the Section 230 of the Act.

l) That the Applicant Companies shall publish with a gap of at least 30 clear days before the aforesaid meetings, indicating the day, date, time and link of the meeting to be conducted through video Conference as aforesaid, to be published in "Financial Express" (English) and "Samyuktha Karnataka" (Kannada), both in Karnataka Edition. It is to be stated in the advertisement that the copies of "Scheme", the Explanatory Statement required to be published pursuant to Section 230 to 232 of the Act and the form of proxy shall be provided free of charge at the registered office of the Applicant Companies. The Applicant Companies shall also publish the notice on its respective website, if any.

m) The Authorized Representative of the Applicant Companies shall furnish affidavit of service of notice of meetings and publication of advertisement and compliance of all directions contained herein at least ten (10) days before the date of proposed meetings.

n) Voting shall be allowed on the "Scheme" in person or by proxy or through electronic means as may be applicable to the Applicant Companies under the Act or there under.

o) The Chairperson shall be responsible to report the result of the meeting to the Tribunal in Form No. CAA 4, as per Rule 14 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 within 07 (seven) days of the conclusion of the meetings. He would be fully assisted by the Authorized Representative/Company Secretary of the Applicant Companies and the Scrutinizer, who will assist the Chairperson and Alternate Chairperson in preparing and finalizing the reports.

p) The Applicant Companies shall in compliance of sub-section (5) of section 230 and Rule 8 of the Companies (Compromises, Arrangement and Amalgamation) Rules, 2016 send notices in Form No. CAA 3 along with a copy of the Scheme, the Explanatory Statement and the disclosures mentioned in Rule 6 of the "Rules" to (i) the Central Government through the office of the Regional Director (South East Region); (ii) Concerned Registrar of Companies; (iii) Official Liquidator (iv) Jurisdictional Assessing Officer, Income Tax Department, Bangalore by mentioning their respective PAN Number; (v) Competition Commission of India (CCI) and other Sectoral Regulators/Authorities, if any, stating that representations, if any, to be made by them shall be sent to the Tribunal within a period of 30 days from the date of receipt of such notice and copy of such representation shall simultaneously be sent to the concerned companies, failing which, it shall be presumed that they have no objection to the proposed Scheme.

q) The Applicant Companies shall furnish copy of the Scheme free of charge within one day of any requisition for the "Scheme" made by any shareholder entitled to attend the aforesaid meetings.

r) It shall be the responsibility of the Applicant Companies to ensure that the notices are sent under the signature and supervision of the authorized representative of the Company on the basis of Board Resolutions.

s) All the aforesaid directions are to be compiled with strictly in accordance with the applicable law including forms and formats contained in the "Rules" as well as the provisions of the Companies Act, 2013, by the Applicant Companies.

24. With the aforesaid directions, this First Motion Application bearing C.A. (CAA) No. 02/BB/2023 stands allowed giving liberty to the Applicant Companies to file Second Motion petition with the direction that the Applicant Companies shall make specific prayer for sending notice to the (a) Central Government (b) The Registrar of Companies, (c) The Official Liquidator (d) Jurisdictional Income Tax Authorities by disclosing the PAN Numbers of the Applicant Companies and (e) other relevant statutory authorities/sectoral regulators as applicable in the title of the Second Motion petition.

25. A copy of this order be supplied to the learned PCS for the Applicant Companies, who in turn shall supply copy of the same to the Chairperson and the Scrutinizer.