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2024 Supreme(Online)(NCLT) 5511
NATIONAL COMPANY LAW TRIBUNAL
Shri Rajeev Bhardwaj, Shri Sanjay Puri, JJ
M/s. Hyperfactory IT Services India Private Limited – Appellant
Versus
M/s. Meredith India Services Private Limited – Respondent
CA (CAA) No.64/230/HDB/2023
For the Appellants/Petitioners: Mr. R. Inbaraju
For the Respondents: Mr. Harshavardhan Reddy, Mr. Vasantrao Meshram
The court sanctioned the scheme of amalgamation under the Companies Act, affirming compliance with statutory obligations and benefits to shareholders despite the Transferor Company's losses.
Headnote:(A) Companies Act, 2013 - Sections 230 to 232 - Scheme of Amalgamation sanctioned - The scheme proposed by the Transferor and Transferee Companies seeks consolidation to enhance shareholder value and operational efficiency. The petition for amalgamation was submitted following necessary compliances among which the appointed date was established as 01.04.2023. (Paras 1-2, 16)
(B) Compliance and Obligations - The Tribunal outlined that the trust in the companies to comply with all statutory requirements, including proper privileges for shareholders and implications related to tax liabilities, must be fulfilled post-amalgamation. (Paras 17 viii and ix)
Facts of the case:
The Joint Petition is filed by two companies for amalgamation due to shared management and operational synergies in the IT services sector, pursuant to the Companies Act provisions for corporate restructuring. The Transferor Company had registered losses, while the Transferee is profitable. Reliance was placed on financial balances and operational considerations submitted by third parties like the Official Liquidator and Regional Director, ensuring no adverse impacts are derived from the merger. (Paras 4-5, 13)
Findings of Court:
The Tribunal found the Scheme equitable and compliant with regulations, enabling the transfer of assets and liabilities without further requisites. The amalgamation was declared not contrary to public policy. (Paras 16)
Issues: The primary issues revolved around the legality of the amalgamation process, compliance with statutory regulations, the impact on employees, and tax liability considerations. (Paras 12-13)
Ratio Decidendi: The Tribunal held that all requisite checks regarding corporate compliance, statutory liabilities, and shareholder rights were satisfactorily met, advocating that the amalgamation is in the interest of the stakeholders and beneficial for operational synergies. The amalgamation should not be misconstrued to provide exemptions from payable duties. (Paras 17 i-iv)
Result: The amalgamation scheme is approved, allowing for the transfer of the Transferor Company to the Transferee Company.
| Table of Content |
|---|
| 1. sanction of scheme of amalgamation (Para 1 , 4) |
| 2. rationale for the proposed scheme (Para 5) |
| 3. board resolutions and procedural compliances (Para 6 , 7 , 9 , 10 , 11 , 12 , 13 , 14) |
| 4. consideration for issuance of equity shares (Para 15) |
| 5. final order and directives (Para 17) |
ORDER
1. This is a Joint Petition filed by the Transferor Company and Transferee Company, under Section 232 r/w Section 230 and other applicable provisions of the Companies Act, 2013 praying for the sanction of the Scheme of Amalgamation (“Scheme”) of M/s.Hyperfactory IT Services India Private Limited (“Transferor Company”) and M/s.Meredith India Services Private Limited (“Transferee Company”), their respective shareholders in terms of the Scheme of Amalgamation (“Scheme”)
2. The Registered Office of the Transferor Company is situated in the State of Telangana.
3. The Registered Office of the Transferee Company is situated in the State of Karnataka and thus does not fall under the jurisdiction of this Tribunal.
4. Briefly, the facts are as follows:
I. First Petitioner/Transferor Company-
i. M/s. Hyperfactory IT Services India Private Limited (“Transferor Company”), was incorporated on 30.08.2007 with CIN: U72200TG2007PTC055322.
(Certified True Copy of Certificate of Incorporation of the Petitioner Company/ Transferor Company is filed at Annexure–1 at page No-32 of the Petition).
ii. The authorized, subscribed, issued and paid-up share capital of the Petitioner Company/Transferor Company as on 31st March, 2023 is as follows:
| Authorized Capital | Amount (in Rs.) |
| 50,000 equity shares, of Rs 10/- each | 5,00,000 |
| Total | 5,00,000 |
| Issued, Subscribed and Paid-up Share Capital | Amount (in Rs.) |
| 10,000 equity shares, of Rs 10/- each | 1,00,000 |
| Total | 1,00,000 |
Subsequent to March 31, 2023 and till the date of filing of this petition before this Tribunal, there has been no change in the share capital structure of the Transferor Company.
iii. The Petitioner Company/Transferor Company was incorporated for carrying on the business as set out in the, main objects, inter alia, given below:
a. To carry on in India or abroad the business of developing, consulting, marketing, selling, managing, designing, customizing, promoting, installing, maintaining, producing, modifying, developing, conceiving software systems of all descriptions, applications and specifications useful for the software industry or any other industry and to provide information technology enabled services, wireless communications, computer communications engage in web designing, mobile marketing services and all other allied services and activities used in relation to this business and to act as after sales service provider, representative, advisor, consultant, know how provider, sponsors, franchiser, licenser or job worker and to provide training and technical support.
(Certified True Copy of Memorandum and Articles of Association of the Petitioner Company/ Transferor Company is filed at Annexure–2 at page Nos-33-62 of the Petition).
iv. A list of Board of Directors of the Petitioner Company/Transferor Company is annexed as Annexure 3 at page no. 63 of the Petition.
v. As per the latest audited balance sheet as on March 31, 2023, the summarized position of the assets and liabilities of Petitioner Company/Transferor Company is as follows:
| Liabilities | Amounts (in INR) | Assets | Amounts (in INR) |
| Share Capital | 1,00,000 Non-Current Assets | - | |
| Other Equity | 1,32,36,900 Current Assets | 1,38,79,700 | |
| Non-Current Liabilities | - | ||
| Current Liabilities | 5,42,800 | ||
| Total | 1,38,79,700 Total | 1,38,79,700 |
(Certified True Copy of Audited Financial Statement for the year ended March 31, 2023 of the Petitioner Company/Transferor Company is filed as Annexure 4 at page Nos.64-78 of the Petition).
vi. As per the latest provisional unaudited balance sheet made up to August 31, 2023, the summarized position of the assets and liabilities of Petitioner Company/Transferor Company is as follows:
| Liabilities | Amounts (in INR) | Assets | Amounts (in INR) |
| Share Capital | 1,00,000 Non-Current Asset | ||
