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2024 Supreme(Online)(NCLT) 4643
NATIONAL COMPANY LAW TRIBUNAL
Balraj Joshi, Member (Technical), Bidisha Banerjee, Member (Judicial)
ARAVALI COMMODITIES PRIVATE LIMITED – Appellant
Versus
SANURAGA HOSIERY PRIVATE LIMITED – Respondent
Company Petition (C.P.)(CAA) No.186/KB/2023 | Company Application (C.A.) (CAA) No.61/KB/2023
For the petitioners: Mr. Shaunak Mitra, Mr. Arghya Chakraborty
The court upheld the scheme of amalgamation as compliant with the statutory requirements and aimed at enhancing corporate efficiency.
Headnote:(A) Companies Act, 2013 - Sections 230 and 232 - Composite Scheme of Arrangement - Sanctioning of amalgamation of multiple Transferor Companies into a Transferee Company for effective management and consolidation of holdings. Scheme fully compliant with applicable laws; no complaints observed - The amalgamation is aimed at streamlining operations and maximizing shareholder value. (Paras 1-5)
(B) Legal Proceedings - Existing lawsuits and liabilities shall transfer to the Transferee Company; no current issues prejudiced by the amalgamation. (Paras 5(d)-(h))
Facts of the case:
Participants seek approval for a composite scheme of amalgamation to consolidate legal entities, enhance financial strength and governance efficiency, unanimously approved by boards. Statutory auditor confirmed compliance with accounting standards. 98.99% unsecured creditors consented to proceed with the scheme. Existing legal processes will continue under Transferee.
Findings of Court:
The validation of the proposed merger was authorized based on compliance with all statutory obligations and absence of opposition. The recommended scheme is in the public interest. Consolidated financial statements are required within 15 days.
Issues: Appropriateness of the amalgamation structure and its adherence to statutory frameworks, particularly regarding financial reporting and compliance timelines.
Ratio Decidendi: The amalgamation is held to facilitate operational efficiencies while addressing all regulatory concerns, with statutory protections for all obligations retained post-merger.
Result: Petition granted and the Amalgamation Scheme sanctioned.
| Table of Content |
|---|
| 1. proposed amalgamation scheme aims to consolidate companies and reduce regulatory complexities. (Para 1) |
| 2. the scheme allows for ongoing compliance and addresses any existing liabilities or legal proceedings. (Para 3) |
| 3. all statutory compliance and shareholder consent obtained for the scheme. (Para 4 , 5) |
Per: BalrajJoshi,Hon’bleMember(Technical)
1. The instant petition has been filed under Section 230 (1) of the Companies Act , 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 for sanction of the Composite Scheme of Arrangement between Aravali Commodities Private Limited, the Applicant No. I [hereinafter referred to as the "Transferor Company 1"], Sanuraga Hosiery Private Limited, the Applicant No. II [hereinafter referred to as the "Transferor Company 2"], Goodlife Merchants Private Limited, the Applicant No. III [hereinafter referred to as the "Transferor Company 3"], Nextgen Dealers Private Limited, the Applicant No. IV [hereinafter referred to as the "Transferor Company 4"], Parijat Tradelink Private Limited, the Applicant No. V [hereinafter referred to as the "Transferee Company"] read with the relevant rules, whereby and whereunder, the Transferor Companies are proposed to be amalgamated with the Transferee Company from the Appointed Date i.e. 1st day of April, 2022 for Part II of the Scheme, 2nd day of April 2022 for Part III of the Scheme after giving effect to Part II of the Scheme, in the manner and on terms and conditions stated in the said Scheme of Amalgamation (“Scheme”). A copy of the said Scheme of Amalgamation isAnnexed totheCompanyPetitionand marked as Annexure‘A’
2. The Petition has now come up for final hearing. Counsel for the Petitioner submits as follows:
(a) The Scheme was approved unanimously by the respective Board of Directors of the Transferor Companies as well as the Transferee Company and the Resulting Company at their meetings held on16thNovember 2022.
(b) The circumstances which justify and/or have necessitated the Scheme and the benefits ofthe sameare, inter alia, as follows:-
i. In order to consolidate the various holdings and effectively manage the group of companies as a single entity, which will provide several benefits including streamlined group structure by reducing the number of legal entities, reducing the multiplicity of legal & regulatory compliances, rationalizing costs, it is intended that the Transferor Companies be amalgamated into Transferee Companies.
ii. Greater size, scale, integration, and greater financial strength, and flexibility for the transfer entity, which would intern, result in maximizing overall shareholder value;
iii. The amalgamation will result in better economic control, increased financial strength, and flexibility;
iv. The entity will be able to make larger investments for growth, and the amalgamation shallfacilitatefurther resource raising.
(c) The Statutory Auditor of the Petitioner has by their certificate dated 16th November
2022 confirmed that the accounting treatment in the Scheme is in conformity with the accounting standards prescribed under Section 133oftheCompanies Act,2013.
(d) No proceedings are pending under Sections 210 to 227 of the Companies Act , 2013 Against the Transferor Companies, the Transferee Company and the Resulting Company.
(e) The exchange ratio of shares in consideration of the Arrangement has been fixed on a fair andreasonable basis andonthebasis of theReport thereon ofCAVidhi Chandak.
(f) The shares of theApplicant Companies are not listed onanyStock Exchanges.
(g) By an order dated 15th June 2023 in Company Application (CAA) No. 61/KB/2023, this Tribunal made the following directions with regard to meetings of shareholders and creditors under Section 230 (1) read with Section 232 (1) oftheAct:-
(a) Meetings Dispensed:
i. Meeting of the shareholders of the Transferor Companies and the Transferee Company, are hereby dispensed with, in view of the consents given by all the shareholders of t
