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2023 Supreme(Online)(NCLT) 2601
NATIONAL COMPANY LAW TRIBUNAL
T.Krishnavalli, Manoj Kumar Dubey, JJ
Ujjivan Financial Services Limited – Appellant
Versus
Ujjivan Small Finance Bank Limited – Respondent
CA (CAA) No.17/BB/2023
For the Applicant Companies:Advocate Saji P John
The Tribunal allows the amalgamation of two companies while dispensing meetings for some stakeholders, emphasizing compliance with regulatory requirements and the benefits of the merger.
Headnote:(A) Companies Act, 2013 - Sections 230 to 232 - First motion application for amalgamation of Ujjivan Financial Services Limited into Ujjivan Small Finance Bank Limited - Applications is allowed for dispensation of meetings of certain stakeholders, with appropriate orders issued for convening equity shareholder meetings. (Paras 1, 8, 22)
(B) Regulatory Compliance - The Tribunal directed compliance with relevant provisions of the Companies Act, 2013 and other applicable laws for holding shareholders' meetings. (Paras 23, 24)
Facts of the case:
The applications filed to amalgamate Ujjivan Financial Services Limited with Ujjivan Small Finance Bank, reflecting no creditors in the transfer company leading to dispensation of meeting requirements.
Findings of Court:
The amalgamation is found beneficial for both companies and meets regulatory guidelines set forth.
Issues: Issues surrounding shareholder meetings and stakeholder communications were addressed.
Ratio Decidendi: The court emphasized adherence to statutory requirements concerning amalgamation processes, allowing for equity shareholder meetings via virtual platforms.
Result: The First Motion Application bearing CA (CAA) No.17/BB/2023 stands allowed.
| Table of Content |
|---|
| 1. amalgamation process requisites and stakeholder meeting. (Para 1 , 2 , 8) |
| 2. regulatory compliance of amalgamation. (Para 3 , 4) |
| 3. financial implications of amalgamation. (Para 5 , 6 , 7) |
| 4. employee transitions and shareholder interests. (Para 14 , 16 , 17) |
ORDER
Per: Manoj Kumar Dubey, Member (Technical)
1. The present first motion application in the Scheme of Amalgamation has been jointly filed on 05.04.2023 by the Applicant Companies Ujjivan Financial Services Limited (described in short as “Applicant Company No. 1/ Transferor Company), Ujjivan Small Finance Bank Limited (described in short as “Applicant Company No. 2/ Transferee Company) under section 230-232 of the Companies Act, 2013 read with other applicable provisions of the Companies Act, 2013 inter alia, seeking for dispensation of the meetings of the preference shareholder, debenture holders, unsecured creditors and deposit holders of the applicant company No.2; and to convene the meeting of Equity shareholders of Applicant Companies. Since there is no creditor in the Applicant Company No.1 and no secured creditor in Applicant Company No.2 there is nothing to convene their meeting. The Scheme of Amalgamation is placed on record at Annexure 12 of the Application.
2. The Applicant Company No.1/Transferor Company was incorporated as a private limited company on December 28, 2004, under the provisions of erstwhile Companies Act, 1956 with the name and style ‘Ujjivan Financial Services Private Limited’. Pursuant to a certificate issued by the Reserve Bank of India (“RBI”) on October 31, 2005, the Transferor Company was permitted to commence operations as a Non-Banking Financial Company (“NBFC”) under section 45 IA of the Reserve Bank of India Act, 1934 . On September 5, 2013, the Transferor Company was registered as NBFC- Microfinance Institution (“NBFC-MFI”) by the RBI. The Transferor Company was subsequently converted into a public limited company pursuant to a special resolution passed by its shareholders at extraordinary general meeting held on November 3, 2015, and the name of the Transferor Company was changed to ‘Ujjivan Financial Services Limited’, bearing CIN: L65999KA2004PLC035329. Copies of the Certificate of Incorporation, and Fresh Certificate of Incorporation are found attached at Annexure 1 of the Application. Copy of RBI certificate dated October 31, 2005 and RBI’s fresh certificate dated March 4, 2016 are found attached at Annexure 2 of the Application. The Registered Office of the Applicant Company No. 1/Transferor Company is situated at Grape Garden, No.27, 3rd ’A’ Cross 18th Main 6th Block, Koramangala Bangalore, 560095, Karnataka, India, India. A copy of the Certificate of Incorporation and Articles of Association is found attached as Annexure – 4 of the application. As per the Memorandum of Association, the main objects of Transferor Company are as follows:
“1. To carry on the business, whether in India or outside, of making investments in group companies in the form of shares, bonds, debentures, debt, loans or securities and providing guarantees, other forms of collateral, or taking on other contingent liabilities, on behalf of or for the benefit of, any group companies.
2. To carry on financial activities, whether in India or outside, in the nature of investment in bank deposits, money market instruments (including money market mutual funds and liquid mutual funds), government securities, and to carry on such other activities as may be permitted and prescribed by the relevant statutory authorities for core investment companies from time to time.”
3. The Authorized, issued, subscribed and paid-up share capital of the Transferor Company, as on the date of filing the Application was as under:
| Authorised Share Capital | Amount in Rs. |
| 125,000,000 equity shares of Rs 10/- each | 1,250,000,000 |
| Total 1,250,000,000 | |
| Issued, Subscribed and Paid-up Equity Share Capital | Amount in Rs. |
| 121,678,094 equity shares of Rs 10/- each | 1,216,780,940 |
| Total 1,216,780,94 |
