In re Ambrosia Corner House Private Limited (NCLT Delhi)
Summary: The NCLT Delhi sanctioned the Scheme of Arrangement for amalgamation of Ambrosia Corner House Private Limited, the Transferor Company, with Kafila Hospitality and Travels Private Limited, the Transferee Company, under Sections 230 to 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The companies’ Boards had unanimously approved the Scheme on 12.12.2023 with 30.11.2023 as the appointed date. In the first-motion proceedings, the Tribunal had dispensed with meetings of the equity shareholders, secured creditors and unsecured creditors and subsequently directed notices to the Central Government through the Regional Director, Income Tax Department, Registrar of Companies and Official Liquidator. The Regional Director raised several observations relating to inter-corporate loans under Section 186 of the Companies Act, 2013, disputed sales tax/VAT liabilities, contingent liabilities, title regularisation of property standing in the name of a director, utilisation of borrowings and payment of fees on revised authorised share capital under Section 232(3)(i). The Petitioner Companies furnished clarifications and undertakings, including that the Transferee Company would bear the relevant tax, contingent and other liabilities and comply with the applicable statutory requirements. The Regional Director thereafter stated that no further objection remained. Although the Income Tax Department did not file a report despite notices, the Transferee Company filed an additional affidavit undertaking to pay all present or future Income Tax dues, if any, of both the Transferor and Transferee Companies. The Official Liquidator reported that the affairs of the Transferor Companies did not appear to have been conducted prejudicially to the interests of members or the public. The Petitioner Companies further stated that no investigation proceedings under the specified provisions of the Companies Act, 1956 or Companies Act, 2013 were pending. Statutory auditors also certified that the accounting treatment contemplated by the Scheme conformed to the accounting standards referred to in Section 133 and the applicable Companies Rules. Applying Miheer H. Mafatlal vs Mafatlal Industries Ltd., JT 1996 (8) 205, the Tribunal reiterated that shareholders and creditors are ordinarily the best judges of their commercial interests and that, while considering a scheme under Sections 230-232, the Tribunal exercises a supervisory rather than appellate jurisdiction over their commercial wisdom. Finding no impediment to the Scheme after considering the approvals, regulatory responses and undertakings, the NCLT sanctioned it subject to continued compliance with statutory requirements and clarified that the sanction would neither protect any violation of law nor constitute an exemption from stamp duty, taxes, charges or other statutory permissions. The Tribunal directed that, from the appointed date of 30.11.2023, the relevant contracts, employees, outstanding debts, liabilities, contingent liabilities, duties and obligations of the Transferor Company would vest in or stand transferred to the Transferee Company and pending proceedings would continue by or against the Transferee Company. It further directed filing of the certified order with the Registrar of Companies within 30 days, following which the Transferor Company would stand dissolved and the records of the companies would be consolidated. Until full implementation of the Scheme, the Transferee Company was also directed, in accordance with Section 232(7), to file the prescribed annual statement in Form CAA-8 within 210 days from the end of each financial year. The petition was accordingly disposed of.
