Subrata Kumar Dash

1. This is a joint First Motion Application filed by Applicant Companies namely; UnitedLex BPO Private Limited (Applicant Company No. 1/Transferor Company) and iRunway India Private Limited (Applicant Company No. 2/Transferee Company) under Section 230-232 of the Companies Act, 2013 (the Act) and other applicable provisions of the Act read with Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016 (the Rules) in relation to the Scheme of Amalgamation and Arrangement between the Applicant Companies. The said Scheme is attached as Annexure-O of the Application.

2. The Applicant Companies have prayed for dispensing with the requirement for convening the meetings of the Equity Shareholders, Secured and Unsecured Creditors of all Applicant Companies.

3. The Applicant Company No. 1 is presently engaged to carry on the business of providing outsourcing of all legal, paralegal research, drafting and documentation work and software development to all kind of clients etc.

4. The Applicant Company No. 2 is presently engaged to carry on the business of providing consultancy services-separating ideas from current implementation; identifying patentable concepts, building intellectual property (IP) strategy around it-protecting IP including drafting of patents; technology/business analysis services-early stage valuation, refining ideas base don technology landscape and business landscape; take to market services-building business plans and funding strategies, determining best agent(s); actual execution-incubating ideas, leveraging IP etc.

5. It is submitted that the registered offices of the Applicant Companies are situated in the State of Haryana and, therefore, all the applicant companies are under the territorial jurisdiction of this Bench.

6. The rationale of the Scheme is given below:-

a. greater integration, consolidation of business operations/brand and greater financial strength and flexibility for the Transferee Company, which would result in maximizing overall shareholder value, and will improve the competitive position of the combined entity;

b. greater market share and enhanced competing abilities in the market due to scale;

c. greater efficiency in cash management and unfettered access to cash flow generated by the combined business which can be deployed more efficiently to fund organic and inorganic growth opportunities, to maximize shareholder value;

d. cost savings are expected to flow from more focused operational efforts, rationalization, standardization and simplification of business processes, greater synergy between the products and services of the two companies and the elimination of duplication, and rationalization of administrative expenses;

e. achieving economies of scale;

f. simplified corporate structure of the Transferee Company and its businesses, thereby leading to more efficient utilization of capital and creation of a consolidated base for future growth of the Transferee Company; and

g. concentrated management focus, integration, streamlining management structure, seamless.

7. It is stated that the Board of Directors of the Applicant Companies in their meetings held on 04.02.2022 have considered and unanimously approved the Scheme of Amalgamation and Arrangement subject to sanctioning of the same by this Tribunal. The copies of the Board Resolutions of the Applicant Companies are attached as Annexure-Q and R, respectively of the application.

8. The appointed date of the Scheme is 01.04.2021 as mentioned in Part-I Clause 1.1.2 of Scheme of Amalgamation which is attached as Annexure-O of the application.

9. It is stated that Applicant Companies have filed the audited financial statements as on 31.03.2021 and the provisional financial statements as on 31.12.2021 which are attached as Annexure-F, G, M and N, respectively of the application.

10. It is deposed by way of an affidavit by the authorized representative of Applicant Companies that the Scheme does not provide for corporate debt restructuring as contemplated under Section 230(2)(c) of the Companies Act, 2013 and accordingly the referred sub-section has no applicability on the Scheme. The aforesaid affidavits are attached as Annexure-JJ and KK, respectively of the application.

11. It is further submitted that in pursuance of the proviso to Sec. 230 (7) and Section 232(3) of the Act, Applicant Companies have filed the certificates dated 27.01.2022 issued by statutory auditors of applicant companies certifying that the Scheme is in compliance with the Accounting Standards under Section 133 of the Act and the same are attached as Annexure-DD and EE, respectively of the application.

12. It is further submitted by the counsel for applicant companies that as per Valuation Report/Share Exchange Ratio Report dated 27.01.2022 submitted by Ms. Rashmi Shah FCA, Registered Valuer (SFA) bearing registration No. IBBI/RV/06/2018/10240 is attached as Annexure-P. The Share Exchange Ratio is given below:-

"160 (One Sixty) fully paid-up equity shares of iRunway India Private Limited of Rs. 10 each for 1,121 (One Thousand One Hundred Twenty-One) equity shares of Re. 0.01/- each to be issued to external shareholders of UnitedLex BPO Private Limited, which translates into 1 (One) fully paid-up equity share of iRunway India Private Limited of Rs. 10 each for 7.01 (Seven point zero one) equity shares of Re. 0.01/- each to be issued to external shareholders of UnitedLex BPO Private Limited"

13. It is submitted by the learned counsel that the Scheme (Annexure-O) also takes care of the interests of the staff/workers and employees of the Applicant Companies, by virtue of Part-II Clause 9 of the Scheme.

14. It is certified by TR Chadha & Co. LLP, Chartered Accountants, in respect of Applicant Companies that there are no investigation proceedings have been instituted and/or are pending in relation to the Applicant Companies under Sections 210, 214 to 217, 219, 220, 223 to 225 of the Companies Act, 2013 or under erstwhile Sections 237, 243, 247(1A), 250, 251 of the Companies Act, 1956 as applicable. The aforementioned certificates dated 04.02.2022 are attached as Annexure-BB and CC, respectively of the application.

15. It is deposed by the authorised representatives of applicant companies that there are no investigations or proceedings which have been instituted and are pending against the companies except those mentioned in Annexure-I of the affidavits. The aforesaid affidavits are filed by Dairy No. 00248/02 dated 08.06.2022.

16. The Applicant Companies have furnished the following documents:-

i. Proposed Scheme of Amalgamation and Arrangement (Annexure-O of the application).

ii. Certificate of Incorporation of the Applicant Companies (Annexure-A and H, respectively of the application).

iii. Memorandum of Association and Articles of Association of the Applicant Companies (Annexure-B, C, I and J, respectively of the application).

iv. List of Equity Shareholders of the Applicant Companies as on 06.01.2022 duly certified by TR Chadha & Co LLP, Chartered Accountants (Annexure-D and K, respectively of the application).

v. Consent Affidavits of Equity Shareholders of the Applicant Company No. 1 (Annexure-T and U, respectively of the application).

vi. List of Secured Creditors of the Applicant Companies as on 06.01.2022 duly certified by TR Chadha & Co LLP, Chartered Accountants (Annexure-V and Y, respectively of the application).

vii. List of Unsecured Creditors of the Applicant Companies as on 06.01.2022 duly certified by TR Chadha & Co LLP, Chartered Accountants (Annexure-W and Z, respectively of the application).

viii. Consent Affidavits of Unsecured Creditors of the Applicant Company No. 1 (Annexure-X and AA, respectively of the application).

ix. Certificates of Statutory Auditors to the effect that the Accounting treatment proposed in the Scheme is in conformity with Section 133 of the Companies Act, 2013 (Annexure-DD and EE, respectively of the application).

x. Audited Financial Statement as on 31.03.2021 of the Applicant Companies (Annexure-F and G, respectively of the application).

xi. Provisional Financial Statements for the period ended on 31.12.2021 of the Applicant Companies (Annexure-M and N, respectively of the application).

xii. Affidavit with regard to the no corporate debt restructuring of the Applicant Companies (Annexure-JJ and KK, respectively of the application).

xiii. Proposed Share Exchange Ratio (Annexure-P of the application).

xiv. Certificate issued by TR Chadha & Co LLP, Chartered Accountants, certifying that there is no investigation against the Applicant Companies (Annexure-BB and CC, respectively of the application).

xv. Affidavit stating that no investigation or proceedings are pending except those mentioned in Annexure-I of the affidavits. (Dairy No. 00248/02 Dated 08.06.2022)

17. The Applicant Companies have furnished the details of the Equity Shareholders, Secured Creditors and Unsecured Creditors as follows:

18. Accordingly, the directions of this Bench in the present case are as under:-

I. In relation to Applicant Company No. 1/Transferor Company:

a. The meeting of the Equity Shareholders is dispensed with keeping in view the shareholding and ownership pattern of the company and the fact that the consent by way of affidavits have been received;

b. Since, there are no Secured Creditors in the Applicant Company No. 1/Transferor Company. Therefore, there is no scope for any meeting;

c. The meeting of the Unsecured Creditors of the Applicant Company No. 1/Transferor Company is dispensed with as it has 64 (Sixty Four) Unsecured Creditors and the consent of the Unsecured Creditors holding 95.82% in value have been received by way of affidavits.

II. In relation to Applicant Company No. 2/Transferee Company:

a. The meeting of the Equity Shareholders is dispensed with keeping in view the shareholding and ownership pattern of the company and the fact that the consent by way of affidavits have been received;

b. Since there are no Secured Creditors in the Applicant Company No. 2/Transferee Company. Therefore, there is no scope for any meeting;

c. The meeting of the Unsecured Creditors of the Applicant Company No. 2/Transferee Company is dispensed with as it has 36 (Thirty-Six) Unsecured Creditors and the consent of the Unsecured Creditors holding 97.46% in value have been received by way of affidavits.

19. In view of the above, the First Motion Application stands allowed by giving liberty to the Applicant Companies to file Second Motion Petition with a direction that the Applicant Companies shall make specific prayer for sending notices to the (a) Central Government through Regional Director, Northern Region, Ministry of Corporate Affairs, New Delhi; (b) concerned Registrar of Companies; (c) the Official Liquidator; and (d) Income Tax Authorities by disclosing the PAN numbers of all the Applicant Companies in the title of the Second Motion Petition. The applicant companies shall also file separate affidavits stating the Sectoral regulators governing the respective companies while filing a second motion petition.