1. The sanction of the Tribunal is sought under sections 230 to 232 and other applicable provisions of the Companies Act, 2013 (the Act) to the Scheme of Amalgamation of PAURAV COLOURANTS PRIVATE LIMITED, the Transferor Company into LAKHANI DYESTUFFS PRIVATE LIMITED, the Transferee Company and their respective Shareholders.
1.1. The Scheme envisages Amalgamation of PAURAV COLOURANTS PRIVATE LIMITED, the Transferor Company into LAKHANI DYESTUFFS PRIVATE LIMITED, the Transferee Company.
2. We have heard the Learned Authorised Representative for the Petitioner Companies and the Deputy RoC for the Regional Director, Western Region, MCA. No objector has come before this Tribunal to oppose the Scheme and nor has any party controverted any averments made in the Petition.
3. The learned authorised representative for the petitioners states that the Transferor Company and the Transferee Company are run by the same family management. There is no business activity with Transferor Company and the Transferee Company is carrying on business of manufacturing and trading of chemicals and dyes.
4. The Learned Authorised Representative for the Petitioners states that the respective Board of Directors of the Transferor Company and the Transferee Company at its respective Board Meeting held on 08th September, 2022 approved the Scheme.
5. The Learned Authorised Representative for the Petitioners states that appointed date of the Scheme of Amalgamation is 1 st April, 2023.
6. The Learned Authorized Representative submits that upon the Scheme becoming finally effective, the Transferee Company shall issue and allot 175 Equity Shares in Transferee Company of Rs. 10/- each with a premium of Rs. 530/- per share for every 1 Equity share held in Transferor Company of Rs. 100/- each
7. The Learned Authorised Representative for the Petitioners submit that the Scheme shall enable the Transferee Company to reap several benefits including:
a) synergy of operations for achieving organization effectiveness; optimisation of use of resources and creating stronger financial base;
b) reduction of statutory and legal compliance requirements;
c) overall cost management;
d) Rationalizing costs by eliminating multiple record keeping and administrative functions;
e) developing stronger base for future growth
f) opportunity to leverage combined assets and build a stronger and sustainable business by optimal utilization of resources.
g) This Scheme of Arrangement, if approved, will be beneficial to both the companies, their shareholders, creditors, employees and all concerned and will enable them to achieve and fulfil their objective through the combined entity more efficiently and economically.
8. The Company Application was allowed by hon’ble NCLT wide its order dated 16 th January, 2023 passed in CA (CAA) No. 233/(MB)/2022. The written consent for approval of scheme has been obtained from all the shareholders of Transferor Company and Transferee Company. The written consent from 100% creditors of Transferor Company and 93.39% in value of creditors of Transferee Company has been obtained.
9. The Learned Authorised Representative appearing on behalf of the Petitioner Companies stated that the Petitioner Companies have complied with all requirements as per directions of the Tribunal and have filed necessary affidavits of compliance with the Tribunal. Moreover, the Petitioner Companies undertake to comply with all statutory/regulatory requirements, if any, as required under the Act and the Rules made thereunder. The undertaking given by the Petitioner Companies is accepted.
10.The Regional Director (Western Region), Ministry of Corporate Affairs, Mumbai, has filed its Report dated 10th April, 2023 inter alia stating therein its observations on the Scheme as stated in the Report. In response to the observations made by the Regional Director, the Petitioner Companies filed an Affidavit in Rejoinder and have given necessary clarifications and undertakings. The observations made by the table below:
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Observation of Regional Director |
Response of the Petitioner Companies |
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Para 2 (a) (i) states as under: “That on examination of the report of the Registrar of Companies, Mumbai dated 31.03.2023 for Petitioner Companies (Annexed as Annexure A-1) that the Petitioner Companies falls within the jurisdiction of ROC, Mumbai. It is submitted that no compliant and/or |
Apropos observation made in paragraph 2 (a) of the report of Regional Director is concerned, the Petitioner Companies submit that the same is self-explanatory in nature and does not require any explanation. Further the Petitioners states that the Transferor Company and Transferee Company have filed |
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representation regarding the proposed scheme of Amalgamation has been received against the Petitioner Companies. Further, the Petitioner Companies has filed Financial Statements up to 31.03. 2022.The ROC has further submitted that in his report dated 31.03.2023 which are as under: - i. That the ROC Mumbai in his report dated 31.03.2023 has stated that No Inquiry, Inspection, Investigations, Prosecutions, and Complaints are pending against the Petitioner Companies.” |
their financial statements for the year ended 31.03.2022 |
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Para 2 (a) (ii) (a& b) states as under: “ii. Further ROC has mentioned as follows: - a. As per the provisions of Section 232(3)(i) of the CA, 2013, where the Transferor Company is dissolved, the fee, if any, paid by the Transferor Company on its authorized capital shall be set-off against any fees payable by the |
Apropos observation made in paragraph 2(a)(ii) (a), the Transferee Company undertakes to comply with the provisions of Section 232(3)(i) of the Companies Act, 2013 with respect to payment of differential fees on the increased Authorised Share Capital and would pay the differential fees, if any. |
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Transferee Company on its authorized capital subsequent to the amalgamation. Therefore, remaining fee, if any after setting- off the fees already paid by the Transferor Company on its authorized capital, must be paid by the Transferee Company on the increased authorized capital subsequent to the amalgamation. b. Interest of the Creditor should be protected.” |
Apropos observation made in paragraph 2(a)(ii) (b), with respect to protection of interest of creditors is concerned, the Petitioner Companies undertakes to protect the interest of creditors at all times. |
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Para 2 ( b) states as under: Transferee Company should undertake to comply with the provisions of section 232(3)(i) of the Companies Act, 2013 through appropriate affirmation in respect of fees payable by Transferee Company for increase of share capital on account of merger of Transfer of companies. |
Apropos observation made in paragraph 2(b) of the report of Regional Director is concerned, as stated above the Transferee Company reiterates that it would comply with the provisions of Section 232(3)(i) of the Companies Act, 2013 with respect to payment of differential fees, if any. |
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Para 2 (c) states as under: In compliance of Accounting Standard-14 or IND-AS 103, as may be applicable, the transferee company shall pass such |
Apropos observation made in paragraph 2(c) of the report of Regional Director is concerned, the Petitioner Companies undertakes to comply with AS-14 or IND AS-103 |
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accounting entries which are necessary in connection with the scheme to comply with other applicable Accounting Standards including AS- 5 or IND AS-8 etc. |
and such applicable accounting standards for Amalgamation and as per other applicable provisions of the Companies Act, 2013 while passing necessary entries in connection with the Scheme including AS-5 or IND AS-8 as applicable. |
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Para 2 (d) states as under: The Hon'ble Tribunal may kindly direct the Petitioner Companies to file an affidavit to the extent that the Scheme enclosed to the Company Application and Company Petition are one and same and there is no discrepancy, or no change is made. |
Apropos observation made in paragraph 2 (d) of the Report of the Regional Director is concerned, the Petitioner Companies submits that Scheme enclosed to the Company Application and the Scheme enclosed to the Company Petition are one and the same and there is no discrepancy or deviation. |
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Para 2 (e) states as under: The Petitioner Companies under provisions of section 230(5) of the Companies Act 2013 have to serve notices to concerned authorities which are likely to be affected by the Amalgamation or arrangement. Further, the approval of the scheme by the Hon'ble Tribunal may not deter such authorities to deal with |
Apropos observation made in paragraph 2 (e) of the report of Regional Director is concerned, the Petitioner Companies submits that notices were served upon the concerned regulatory authorities in accordance with the provisions of section 230(5) of the Companies Act, 2013 and there are no concerned authorities affected by |
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any of the issues arising after giving effect to the scheme. The decision of such authorities shall be binding on the petitioner companies concerned. |
merger. Final hearing notice will be served to the concerned authority as the case maybe. The Petitioners further submits that approval of the scheme by this Hon’ble Tribunal may not deter such authorities to deal with any of the issues arising after giving effect to the scheme. The decision of such Authorities shall be binding on the Petitioner Companies subject to right to appeal, if available. |
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Para 2 (f) states as under:
As per Definition of the Scheme,
"Appointed Date" means April 1, 2023 or such other date as may be determined by the Board of Directors of the Transferor Company and the Transferee Company and as approved by the Central Government;
"Effective Date" means the date on which the certified or authenticated copies of the order(s) sanctioning |
Apropos observation of the Regional Director, Western Region, Mumbai, as stated in paragraph 2 (f) of his report concerned, the Petitioners Companies confirms that the definition “Appointed Date” means 1st April, 2023. Further, Clause 2.1.2 of the Scheme specifies that the appointed date shall be 1st day of April, 2023. Further, the Petitioners confirms that the "Effective Date" means the date on which the certified or authenticated copies of the order(s) sanctioning |
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the Scheme, passed by NCLT is filed by the Transferor Company and Transferee Company with Registrar of Companies, Mumbai, Maharashtra. Any references in this Scheme to the “date of coming into effect of this scheme" or "effectiveness of the Scheme” or “Scheme taking effect” shall mean the Effective Date. It is submitted that the Petitioners may be asked to Comply with the requirements as clarified vide circular no. F. No. 7/12/2019/CL-I dated 21.08.2019 issued by the Ministry of Corporate Affairs. |
the Scheme, passed by NCLT is filed by the Transferor Company and Transferee Company with Registrar of Companies, Mumbai, Maharashtra. Any references in this Scheme to the “date of coming into effect of this scheme" or "effectiveness of the Scheme” or “Scheme taking effect” shall mean the Effective Date. The Petitioner Companies further undertakes to comply with the circular no. F. No.7/12/2019/CL-1 dated 21.08.2019 issued by the Ministry of Corporate Affairs. The Petitioner Companies clarify that the amalgamation as embodied in the Scheme shall take effect from the Appointed Date i.e. 1st April, 2023 |
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Para 2 (g) states as under: Petitioner Companies shall undertake to comply with the directions of Income tax department, if any. |
Apropos observation made in paragraph 2 (g) of the report of Regional Director is concerned, the Petitioner Companies undertakes the compliance of all provisions of the Income Tax Act, 1961 including any direction of the |
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Income Tax department, if any in accordance with the law. |
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Para 2 (h) states as under: Petitioner Companies shall undertake to comply with the directions of the concerned sectoral Regulatory if any. |
Apropos observation made in paragraph 2 (h) of the report of Regional Director is concerned, the Petitioner Companies states that there are no sectoral regulators to Petitioner Companies and we hereby confirm if in future any notice from any authorities is received in the name of Transferor Company the same will be attended by Transferee Company. The Petitioners further undertakes the comply with any directions issued by any regulators, if any in accordance with the law. |
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Para 2 (i) states as under: No Form BEN-2 has been filed by any of the Petitioner Companies as per records available at MCA21 Portal, hence Petitioner Companies shall undertake to comply with the provisions of section 90 of Companies Act, 2013 r/w. Companies (Significant Beneficial Owners) Amendment |
Apropos observation made in paragraph 2 (i) of the report of Regional Director is concerned, the Petitioner Companies states that the Shareholding mentioned in paragraph 2 (i) of the report of Regional Director is on as date. Further, the Petitioner Companies has submitted additional affidavit on 17th October, 2023 stating that |
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Rules, 2019, thereunder and to file Form BEN-2 for declaring name of the significant beneficial owner with concerned ROC. |
Transferee Company has issued a notice in Form BEN-4 to Transferor Company pursuant to section 90 of the Companies Act, 2013 and rules framed thereunder. Subsequently the Transferor Company has replied to Transferor Company that there is no person holding majority stake of the Transferor Company and so there is no significant beneficial owner to the Company. Copy of both Documents have been attached as Annexure A to the additional affidavit submitted with Hon’ble NCLT Mumbai filed on 17th October, 2023. |
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Para 2 (j) states as under: It is observed from MCA21 record that Lakhani Dyestuffs Private Limited, Transferee Company in financial statements as on 31.03.2022 has issued shares at Securities Premium and collected total premium amounting to Rs.40 lakhs/-. |
Apropos observation made in paragraph 2 (j) of the report of Regional Director is concerned, the securities premium of Rs.40,00,000 reflecting in the financial statement of 31st March 2022 were collected pursuant to allotment of 1,00,000 Equity Shares of face value of Rs.10 each at a premium of Rs.40 each on 08th |
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Hence, the Petitioner Companies shall also satisfy the Hon’ble Bench about assessment of share capital u/s. 68 of the Income Tax Act, 1961, for issue of shares at fair value in order to consider the scheme on its merit and payment of applicable income tax, if any to satisfy the Hon’ble NCLT that shares were issued at fair price and in compliance of provisions of Income Tax Act. |
February 2010 based on the financials of 31st March 2009. Post the said year there have been assessment orders passed by Income Tax Authorities for AY 2009-10, 2012-13, 2013-14 & 2014-15 where they have accepted the share premium and no addition u/s 68 of the Income Tax Act, 1961 have been invoked, according there is no impact of Section 68. Copy of aforesaid assessment orders has been attached as Annexure B to additional affidavit submitted with Hon’ble NCLT Mumbai filed on 17th October, 2023. |
11.The Official Liquidator has filed its report dated 10 th April, 2023. The observation made by the Official Liquidator and their replies made by the Transferor Company appears to be satisfactory. In response to the observations made by the Official Liquidator, the Petitioner Companies filed an Affidavit in Rejoinder and have given necessary clarifications and undertakings. The observations made by the table below:
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Observation of Official Liquidator |
Response of the Petitioner Companies |
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With reference to clause Nos. 20.1 of the scheme it is stated that such clauses overrides the provision of Companies Act,2013 namely Section 232(3)(i) which inter-alia provides that, ‘if a company is dissolved the fee paid by such company on its Authorised Capital shall be set off against any fees payable by transferee company on its Authorised Capital. Accordingly, clause Nos. 20.1 may be modified. |
Apropos observation made in paragraph 6 of the report of the Official Liquidator is concerned, the Applicant Company 1/Transferor Company states that the Company once dissolved, the authorised share capital will be merged into the Transferee Company. Further, as per the provisions of Section 232(3)(i) of the Companies Act, 2013, the fees paid by Transferor Company during the process of its incorporation and increase in authorised share capital which can be set off against the fees to be paid on additional share capital if required, the Transferee Company will pay such additional fees if any post such set-off. |
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From the Assets and Revenue of the Transferor Company as at 31.03.2022 it prima-facie appears to be deemed NBFC. However, as per Note 11 under the heading Cash |
Apropos observation made in paragraph 7 of the report of the Official Liquidator is concerned, the Applicant Company 1 /Transferor Company hereby |
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and Cash Equivalent has shown an amount of Rs. 295 Lakhs ‘in deposit account.’ The Hon’ble Tribunal may require from the company to clarify whether the said deposit is for period less than a period business cycle and if it is so the said deposit amount may not be deemed Financial Assets and accordingly company may not be deemed NBFC. |
affirms that there was a huge fire in the Company’s factory premises and plant and pursuant to the same the management of the Company sold its factory premises. Rs.295 Lac as shown in Deposit account in Note 11 to the Audited Accounts under the heading Cash and Cash Equivalent is the surplus money received from the sale of the factory premises which was temporarily parked in fixed deposit with the bank, it is not a business deposit given to third party. The Transferor Company does not have any borrowings and nor is it engaged in the lending activity. The Company was engaged in the business of manufacturing of chemical and chemical products. Accordingly, the Company affirms that it is not a deemed NBFC. |
12.From the material on record, the Scheme appears to be fair, reasonable and is not in violation to any provisions of law nor is contrary to public interest/policy. The undertakings given by the Petitioner Companies are hereby accepted.
13.Since all the requisite statutory compliances have been fulfilled, CP (CAA)/44 /(MB)/2023 is made absolute in terms of prayer clauses of the Company Petition. Hence Ordered.
ORDER
14.The Petition is allowed subject to the following.
(i) The Scheme, with the Appointed Date fixed as 1st April 2023 placed in Company Petition is hereby sanctioned. It shall be binding on the Petitioner Companies involved in the Scheme and all concerned including their respective Shareholders, Secured Creditors, Unsecured Creditors/Trade Creditors and Employees.
(ii) The Registrar of this Tribunal shall issue the certified copy of this Order along with the Scheme forthwith. The Petitioner Companies are directed to file a certified copy of this Order along with a copy of the Scheme with the Registrar of Companies concerned, electronically in E-form INC-28 within 30 days from the date of receipt of the Order from the Registry.
(iii) The Petitioner Companies shall lodge a copy of this Order and the Scheme duly authenticated by the Registrar of this Tribunal with the Superintendent of Stamps concerned, within 30 working days from the date of the receipt of the Order, for the purpose of adjudication of stamp duty, if any, payable.
(iv) The Petitioner Companies shall comply with all the undertakings given by them.
(v) The Petitioner Companies shall take all consequential and statutory steps required under the provisions of the Act in pursuance of the Scheme.
(vi) All authorities concerned shall act on a copy of this Order along with the Scheme duly authenticated by the Registrar of this Tribunal.
(vii) Any person interested in the above matter shall be at liberty to apply to the Tribunal for any directions that may be necessary.
(viii) Ordered Accordingly.
