Case Law Details
Sabari Rubber Private Limited Vs Parampuzha Treads Private Limited (NCLT Kochi)
Under Section 230(9) of the Companies Act, 2013, the Tribunal may dispense with calling of a meeting of Creditors or class of Creditors where such Creditors or class of Creditors, having at least 90% value, agree and confirm, by way of affidavit, to the scheme of compromise or arrangement.
It is found that the Applicant Companies have received consent affidavits from all the Equity shareholders and No Objection Certificates (NOC) from the Unsecured Creditors regarding their unequivocal, unconditional consent to the scheme. In their respective consent affidavit, each of the Equity Shareholders has also waived their right for the notice for calling their meeting of the Equity shareholders and also waive the right to attend and participate in such meeting of the Equity shareholders or any other process in connection with the approval of the Scheme. The Unsecured Creditors in their NOC also mentioned that they do not have any objection against the Company seeking dispensation of holding of their meeting for approval of the Scheme as they already consent for the Scheme of Amalgamation.
In the IA (C/ACT) 37 KOB 2022 filed by the Applicant Companies, it is stated that there was difficulty in arranging the consent letters by way of an Affidavit from the unsecured creditors of the Applicant Company No.10 and No.13 as they are located in different parts of the country. It is stated that the Applicant Company No. 10 has 34 (Thirty-Four) unsecured creditors aggregating Rs. 43,71,551/- (Rupees Forty-Three Lakhs Seventy-One Thousand Five Hundred and Fifty-One only) and Applicant Company No.13 has 59 (Fifty-Nine) unsecured creditors aggregating Rs. 1,56,88,726/- (Rupees One Crore Fifty-Six Lakhs Eighty-Eight Thousand Seven Hundred and Twenty-Six only).
Taking into consideration the application filed by the applicant companies and the documents filed therewith as well as the position of law, and the circumstances enumerated herein above and in the light of the decision in Jupiter Alloys & Steel (India) Limited (supra), We are of the considered opinion that the prayers of the Applicant Companies deserve to be allowed and that the meetings of the members and publication of notice of meetings in the newspapers of the Transferor Companies and Transferee Company as envisaged under Section 230(1) of the Companies Act, 2013 is not necessary and will not serve any purpose, if called, be dispensed with subject to strict compliance of the conditions laid down in Para 25 below.
FULL TEXT OF THE NCLT KOCHI ORDER
1. This is a joint application filed under Sections 230-232 of the Companies Act, 2013 (hereinafter referred to as CA 2013) read with Rule 15 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 by Sabari Rubber Private Limited (hereinafter referred to as the First Applicant Company), Parampuzha Treads Private Limited (hereinafter referred to as the Second Applicant Company), Kaveri Treads Private Limited (hereinafter referred to as the Third Applicant Company) , Sona Rubber Private Limited (hereinafter referred to as the Fourth Applicant Company), Peacock Rubbers Private Limited (hereinafter referred to as the Fifth Applicant Company), Guardian Rubber Private Limited (hereinafter referred to as the Sixth Applicant Company),Southern Agro Trades and Services Private Limited (hereinafter referred to as the Seventh Applicant Company), Ideal Rubber Private Limited (hereinafter referred to as the Eighth Applicant Company), Midland Treads Limited (hereinafter referred to as the Ninth Applicant Company), Midas Retreads India Private Limited (hereinafter referred to as the Tenth Applicant Company), Zeus Rubber Private Limited (hereinafter referred to as the Eleventh Applicant Company), Sumeru Rubber Private Limited (hereinafter referred to as the Twelfth Applicant Company) and Standard Treads Private Limited (hereinafter referred to as the Thirteenth Applicant Company/ Transferee Company). The Transferor Company and the Transferee Company (collectively referred to as the Applicant Companies’) seeking sanction of the Scheme of Amalgamation between them.
2. The Applicant Companies submits that no one will be prejudiced if an order is made and/or directions are given and sought for the following:
I. Dispensation of Equity Shareholder’s Meeting
i. That meeting of the Equity Shareholders of First Applicant company be waived/dispensed with in view of the consent affidavits received from all the 8 (Eight) Equity Shareholders of First Applicant Company.
ii. That meeting of the Equity Shareholders of Second Applicant company be waived/dispensed with in view of the consent affidavits received from all the 8 (Eight) Equity Shareholders of Second Applicant Company.
iii. That meeting of the Equity Shareholders of Third Applicant company be waived/dispensed with in view of the consent affidavits received from all the 10 (Ten) Equity Shareholders of Third Applicant Company.
iv. That meeting of the Equity Shareholders of Fourth Applicant company be waived/dispensed with in view of the consent affidavits received from all the 4 (Four) Equity Shareholders of Fourth Applicant Company.
v. That meeting of the Equity Shareholders of Fifth Applicant company be waived/dispensed with in view of the consent affidavits received from all the 8 (Eight) Equity Shareholders of Fifth Applicant Company.
vi. That meeting of the Equity Shareholders of Sixth Applicant company be waived/dispensed with in view of the consent affidavits received from all the 11 (Eleven) Equity Shareholders of Sixth Applicant Company.
vii. That meeting of the Equity Shareholders of Seventh Applicant company be waived/dispensed with in view of the consent affidavits received from all the 9 (Nine) Equity Shareholders of Seventh Applicant Company.
viii. That meeting of the Equity Shareholders of Eighth Applicant company be waived/dispensed with in view of the consent affidavits received from all the 6 (Six) Equity Shareholders of Eighth Applicant Company.
ix. That meeting of the Equity Shareholders of Ninth Applicant company be waived/dispensed with in view of the consent affidavits received from all the 8 (Eight) Equity Shareholders of Ninth Applicant Company.
x. That meeting of the Equity Shareholders of Tenth Applicant company be waived/dispensed with in view of the consent affidavits received from all the 4 (Four) Equity Shareholders of Tenth Applicant Company.
xi. That meeting of the Equity Shareholders of Eleventh Applicant company be waived/dispensed with in view of the consent affidavits received from all the 8 (Eight) Equity Shareholders of Eleventh Applicant Company.
xii. That meeting of the Equity Shareholders of Twelfth Applicant company be waived/dispensed with in view of the consent affidavits received from all the 10 (Ten) Equity Shareholders of Twelfth Applicant Company.
xiii. That meeting of the Equity Shareholders of Thirteenth Applicant company be waived/dispensed with in view of the consent affidavits received from all the 8 (Eight) Equity Shareholders of Thirteenth Applicant Company.
II. Dispensation of Preference Shareholder’s Meeting.
That there are no Preference Shareholders in any of the Applicant Companies. Hence the question of convening and holding the meeting of Preference Shareholders does not arise.
III. Dispensation of Secured Creditors Meeting
That there are no Secured Creditors in any of the Applicant Companies. Hence the question of convening and holding the meeting of Secured Creditors does not arise.
IV. Dispensation Unsecured Creditors Meeting
i. That there are 4 (Four) Unsecured Creditors having aggregating outstanding amount to the extent of Rs. 4,77,950/- in the First Applicant Company as on 31st day of March, 2021. The present Scheme is an arrangement between the First Applicant Company and its Shareholders as contemplated under Section 230 of the Companies Act, 2013 and there is no Compromise and/or Arrangement with the Creditors as no sacrifice is called for. The rights of the Unsecured Creditors will not be affected as all the creditors would be paid off in the ordinary course of business. The Applicant undertakes to issue individual notices to all its Unsecured Creditors. Hereto annexed and marked as Annexure 45 the Certificate of Chartered Accountant certifying and disclosing the list of Unsecured Creditors of First Applicant Company along with the No Objection Letters received from all the Unsecured Creditors for the merger and dispensing off of Unsecured Creditors meeting.
ii. That there are 5 (Five) Unsecured Creditors having aggregating outstanding amount to the extent of Rs. 4,32,708 /- in the Second Applicant Company as on 31st day of March, 2021. The present Scheme is an arrangement between the Second Applicant Company and its Shareholders as contemplated under Section 230 of the Companies Act, 2013 and there is no Compromise and/or Arrangement with the Creditors as no sacrifice is called for. The rights of the Unsecured Creditors will not be affected as all the creditors would be paid off in the ordinary course of business. The Applicant undertakes to issue individual notices to all its Unsecured Creditors. Hereto annexed and marked as Annexure 46 the Certificate of Chartered Accountant certifying and disclosing the list of Unsecured Creditors of Second Applicant Company along with the No Objection Letters received from all the Unsecured Creditors for the merger and dispensing off of Unsecured Creditors meeting.
iii. That there are 5 (Five) Unsecured Creditors having aggregating outstanding amount to the extent of Rs. 4,84,680 /- in the Third Applicant Company as on 31st day of March, 2021. The present Scheme is an arrangement between the Third Applicant Company and its Shareholders as contemplated under Section 230 of the Companies Act, 2013 and there is no Compromise and/or Arrangement with the Creditors as no sacrifice is called for. The rights of the Unsecured Creditors will not be affected as all the creditors would be paid off in the ordinary course of business. The Applicant undertakes to issue individual notices to all its Unsecured Creditors. Hereto annexed and marked as Annexure 47 the Certificate of Chartered Accountant certifying and disclosing the list of Unsecured Creditors of Third Applicant Company along with the No Objection Letters received from all the Unsecured Creditors for the merger and dispensing off of Unsecured Creditors meeting.
iv. That there are 3 (Three) Unsecured Creditor having aggregating outstanding amount to the extent of Rs. 758/- in the Fourth Applicant Company as on 31st day of March, 2021. The present Scheme is an arrangement between the Fourth Applicant Company and its Shareholders as contemplated under Section 230 of the Companies Act, 2013 and there is no Compromise and/or Arrangement with the Creditors as no sacrifice is called for. The rights of the Unsecured Creditors will not be affected as all the creditors would be paid off in the ordinary course of business. The Applicant undertakes to issue individual notices to all its Unsecured Creditors. Hereto annexed and marked as Annexure 48 the Certificate of Chartered Accountant certifying and disclosing the list of Unsecured Creditors of Fourth Applicant Company along with the No Objection Letters received from all the Unsecured Creditors for the merger and dispensing off of Unsecured Creditors meeting.
v. That there are 5 (Five) Unsecured Creditors having aggregating outstanding amount to the extent of Rs. 12,66,837.87/- in the Fifth Applicant Company as on 31st day of March, 2021. The present Scheme is an arrangement between the Fifth Applicant Company and its Shareholders as contemplated under Section 230 of the Companies Act, 2013 and there is no Compromise and/or Arrangement with the Creditors as no sacrifice is called for. The rights of the Unsecured Creditors will not be affected as all the creditors would be paid off in the ordinary course of business. The Applicant undertakes to issue individual notices to all its Unsecured Creditors. Hereto annexed and marked as Annexure 49 the Certificate of Chartered Accountant certifying and disclosing the list of Unsecured Creditors of Fifth Applicant Company along with the No Objection Letters received from all the Unsecured Creditors for the merger and dispensing off of Unsecured Creditors meeting.
vi. That there are 5 (Five) Unsecured Creditors having aggregating outstanding amount to the extent of Rs. 8,69,234/- in the Sixth Applicant Company as on 31st day of March, 2021. The present Scheme is an arrangement between the Sixth Applicant Company and its Shareholders as contemplated under Section 230 of the Companies Act, 2013 and there is no Compromise and/or Arrangement with the Creditors as no sacrifice is called for. The rights of the Unsecured Creditors will not be affected as all the creditors would be paid off in the ordinary course of business. The Applicant undertakes to issue individual notices to all its Unsecured Creditors. Hereto annexed and marked as Annexure 50 the Certificate of Chartered Accountant certifying and disclosing the list of Unsecured Creditors of Sixth Applicant Company along with the No Objection Letters received from all the Unsecured Creditors for the merger and dispensing off of Unsecured Creditors meeting.
vii. That there are 4 (Four) Unsecured Creditors having aggregating outstanding amount to the extent of Rs. 4,79,63,785/- in the Seventh Applicant Company as on 31st day of March, 2021. The present Scheme is an arrangement between the Seventh Applicant Company and its Shareholders as contemplated under Section 230 of the Companies Act, 2013 and there is no Compromise and/or Arrangement with the Creditors as no sacrifice is called for. The rights of the Unsecured Creditors will not be affected as all the creditors would be paid off in the ordinary course of business. The Applicant undertakes to issue individual notices to all its Unsecured Creditors. Hereto annexed and marked as Annexure 51 the Certificate of Chartered Accountant certifying and disclosing the list of Unsecured Creditors of Seventh Applicant Company along with the No Objection Letters received from all the Unsecured Creditors for the merger and dispensing off of Unsecured Creditors meeting.
viii. That there are 5 (Five) Unsecured Creditors having aggregating outstanding amount to the extent of Rs. 3,90,003/- in the Eighth Applicant Company as on 31st day of March, 2021. The present Scheme is an arrangement between the Eighth Applicant Company and its Shareholders as contemplated under Section 230 of the Companies Act, 2013 and there is no Compromise and/or Arrangement with the Creditors as no sacrifice is called for. The rights of the Unsecured Creditors will not be affected as all the creditors would be paid off in the ordinary course of business. The Applicant undertakes to issue individual notices to all its Unsecured Creditors. Hereto annexed and marked as Annexure 52 the Certificate of Chartered Accountant certifying and disclosing the list of Unsecured Creditors of Eighth Applicant Company along with the No Objection Letters received from all the Unsecured Creditors for the merger and dispensing off of Unsecured Creditors meeting.
ix. That there are 4 (Four) Unsecured Creditors having aggregating outstanding amount to the extent of Rs. 8,400/- in the Ninth Applicant Company as on 31st day of March, 2021. The present Scheme is an arrangement between the Ninth Applicant Company and its Shareholders as contemplated under Section 230 of the Companies Act, 2013 and there is no Compromise and/or Arrangement with the Creditors as no sacrifice is called for. The rights of the Unsecured Creditors will not be affected as all the creditors would be paid off in the ordinary course of business. The Applicant undertakes to issue individual notices to all its Unsecured Creditors. Hereto annexed and marked as Annexure 53 the Certificate of Chartered Accountant certifying and disclosing the list of Unsecured Creditors of Ninth Applicant Company along with the No Objection Letters received from all the Unsecured Creditors for the merger and dispensing off of Unsecured Creditors meeting.
x. That there are 34 (Thirty-Four) Unsecured Creditors having aggregating outstanding amount to the extent of Rs. 43,71,551/- in the Tenth Applicant Company as on 31st day of March, 2021. The present Scheme is an arrangement between the Tenth Applicant Company and its Shareholders as contemplated under Section 230 of the Companies Act, 2013 and there is no Compromise and/or Arrangement with the Creditors as no sacrifice is called for. The rights of the Unsecured Creditors will not be affected as all the creditors would be paid off in the ordinary course of business. The Applicant undertakes to issue individual notices to all its Unsecured Creditors. Hereto annexed and marked as Annexure 54 the Certificate of Chartered Accountant certifying and disclosing the list of Unsecured Creditors of Tenth Applicant Company along with the No Objection Letters received from 29 (Twenty-Nine) Unsecured Creditors aggregating to Rs. 42,69,880/- (97.67% of the total amount payable to the Unsecured Creditors) for the merger and dispensing off of Unsecured Creditors meeting.
xi. That there are 8 (Eight) Unsecured Creditors having aggregating outstanding amount to the extent of Rs. 8,62,322/- in the Eleventh Applicant Company as on 31st day of March, 2021. The present Scheme is an arrangement between the Eleventh Applicant Company and its Shareholders as contemplated under Section 230 of the Companies Act, 2013 and there is no Compromise and/or Arrangement with the Creditors as no sacrifice is called for. The rights of the Unsecured Creditors will not be affected as all the creditors would be paid off in the ordinary course of business. The Applicant undertakes to issue individual notices to all its Unsecured Creditors. Hereto annexed and marked as Annexure 55 the Certificate of Chartered Accountant certifying and disclosing the list of Unsecured Creditors of Eleventh Applicant Company along with No Objection Letters received from all the Unsecured Creditors for the merger and dispensing off of Unsecured Creditors meeting.
xii. That there are 4 (Four) Unsecured Creditors having aggregating outstanding amount to the extent of Rs. 51,136/- in the Twelfth Applicant Company as on 31st day of March, 2021. The present Scheme is an arrangement between the Twelfth Applicant Company and its Shareholders as contemplated under Section 230 of the Companies Act, 2013 and there is no Compromise and/or Arrangement with the Creditors as no sacrifice is called for. The rights of the Unsecured Creditors will not be affected as all the creditors would be paid off in the ordinary course of business. The Applicant undertakes to issue individual notices to all its Unsecured Creditors. Hereto annexed and marked as Annexure 56 the Certificate of Chartered Accountant certifying and disclosing the list of Unsecured Creditors of Twelfth Applicant Company along with the No Objection Letters received from all the Unsecured Creditors for the merger and dispensing off of Unsecured Creditors meeting.
xiii. That there are 59 (Fifty-Nine) Unsecured Creditors having aggregating outstanding amount to the extent of Rs. 1,56,88,726.60/- in the Thirteenth Applicant Company as on 31st day of March, 2021. The present Scheme is an arrangement between the Thirteenth Applicant Company and its Shareholders as contemplated under Section 230 of the Companies Act, 2013 and there is no Compromise and/or Arrangement with the Creditors as no sacrifice is called for. The rights of the Unsecured Creditors will not be affected as all the creditors would be paid off in the ordinary course of business. The Applicant undertakes to issue individual notices to all its Unsecured Creditors. Hereto annexed and marked as Annexure 57 the Certificate of Chartered Accountant certifying and disclosing the list of Unsecured Creditors of Thirteenth Applicant Company along with the No Objection Letters received from 43 (Forty-Three) Unsecured Creditors aggregating to Rs. 1,53,40,692.60/- (97.78% of the total amount payable to the Unsecured Creditors) for the merger and dispensing off of Unsecured Creditors meeting.
V. The Applicant Companies request that the directions be issued for serving the Notice on the Central Government, the Registrar of Companies- Kerala, Income Tax authorities and Official Liquidator under the provisions of Section 230(5) of the Companies Act, 2013.
3. Details of Applicant Companies:
i. The First Applicant Company, was incorporated on the 13th day of July, 1979 with Corporate Identity Number U25191KL1979PTC003085. As per Sub clause 5 of Clause III B of the Memorandum of Association, it has powers to amalgamate with any other Company. As per the latest Audited Balance Sheet, the Share Capital of the First Applicant Company as on the 31st day of March, 2021 is as under:
| Particulars | Amount (in |
| Authorised Capital | |
| 50,000 Equity Shares of Rs.10/- | 5,00,000 |
| TOTAL | 5,00,000 |
| Issued, subscribed and Paid-up Capital | |
| 9,000 equity shares of Rs 10 | 90,000 |
| TOTAL | 90,000 |
There are no Preference Shares issued or allotted by the First Applicant Company.
ii. The objects of the First Applicant Company are set out in the Memorandum of Association. They are briefly as under:
To carry on business as manufacturers, dealers, agents, importers, exporters and merchants of all kinds of rubber and rubber products, tread rubber, tread gum, retreading materials, foam rubber, bushes, mouldings, sheets, kattai sheets, vulcanising solution, flaps, channels, industrial linings, V-belts, transmission belts, conveyers, industrial and automobile belts, tubes, tyres and other compounds, articles and appliances made with or from and involving the use of natural rubber and synthetic rubber.
iii. As on the date of Application, the First Applicant Company has 8 (Eight) Equity Shareholders holding aggregate 9,000 Equity Shares of Rs. 10 each. There are no Debenture Holders or Deposit Holders and Secured Creditors as on 31st day of March, 2021. There are 4 (Four) Unsecured Creditors having aggregate outstanding amount of Rs. 4,77,950/- as on the 31st day of March, 2021 as per the books of accounts.
iv. The Second Applicant Company, was incorporated on 18th June, 1984 with Corporate Identity Number U25191KL1984PTC003994. As per Sub Clause 5 of Clause III B of the Memorandum of Association, it has powers to amalgamate with any other Company. As per the latest Audited Balance Sheet, the Share Capital of the Second Applicant Company as on the 31st day of March, 2021 is as under:
| Particulars | Amount (in Rupees) |
| Authorised Capital | |
| 1,00,000 Equity Shares of Rs.10/- | 10,00,000 |
| TOTAL | 10,00,000 |
| Issued, subscribed and Paid-up Capital | |
| 9,807 equity shares of Rs 10 each, | 98,070 |
| TOTAL | 98,070 |
There are no Preference Shares issued or allotted by the Second Applicant Company.
v. The objects of the Second Applicant Company are set out in the Memorandum of Association. They are briefly as under:
To carry on business as manufacturers, dealers, agents, importers, exporters and merchants of all kinds of rubber and rubber products, tread rubber, tread gum, retreading materials, foam rubber, bushes, mouldings, sheets, kattai sheets, vulcanising solution, flaps, channels, industrial linings, V-belts, transmission belts, conveyers, industrial and automobile belts, tubes, tyres and other compounds, articles and appliances made with or from and involving the use of natural rubber and synthetic rubber.
vi. As on the date of Application, the Second Applicant Company has 8 (Eight) Equity Shareholders holding in aggregate 9807 Equity Shares of Rs. 10 each. There are 5 (Five) Unsecured Creditors having aggregate outstanding amount of Rs. 4,32,708 /- as on 31st day of March, 2021 as per its books of accounts. There are no debenture holders or Deposit holders and Secured Creditors as on 31st day of March, 2021.
vii. The Third Applicant Company, was incorporated on 06th July, 1984 with Corporate Identity Number U25199KL1984PTC004005. As per Sub-clause 5 of Clause III B of the Memorandum of Association, it has powers to amalgamate with any other Company. As per the latest Audited Balance Sheet, the Share Capital of the Third Applicant Company as on the 31st day of March, 2021 is as under:
| Particulars | Amount (in |
| Authorised Capital | |
| 1,00,000 Equity Shares of Rs.10/- | 10,00,000 |
| each TOTAL |
10,00,000 |
| Issued, subscribed and Paid-up Capital | |
| 9,792 equity shares of Rs 10 each, | 97,920 |
| fully pa TOTAL |
97,920 |
There are no Preference Shares issued or allotted by the Third Applicant Company.
viii. The objects of the Third Applicant Company are set out in the Memorandum of Association. They are briefly as under:
To carry on business as manufacturers, dealers, agents, importers, exporters and merchants of all kinds of rubber and rubber products, tread rubber, tread gum, retreading materials, foam rubber, bushes, mouldings, sheets, kattai sheets, vulcanising solution, flaps, channels, industrial linings, V-belts, transmission belts, conveyers, industrial and automobile belts, tubes, tyres and other compounds, articles and appliances made with or from and involving the use of natural rubber and synthetic rubber.
ix. As on the date of Application, the Third Applicant Company has 10 (Ten) Equity Shareholders holding aggregate 9792 Equity Shares of Rs. 10 each. There are no Debenture holders or Deposit holders and Secured Creditors in the Third Applicant Company as on 31st day of March, 2021. There are 5 (Five) Unsecured Creditors having aggregate outstanding amount of Rs. 4,84,680 /- as on 31st day of March, 2021 as per its books of accounts.
x. The Fourth Applicant Company, was incorporated on 18th August, 1979 with Corporate Identity Number U2519KL1979PTC003090. As per Sub clause 5 of Clause III B of the Memorandum of Association, it has powers to amalgamate with any other Company. As per the latest Audited Balance Sheet, the Share Capital of the Fourth Applicant Company as on the 31st day of March, 2021 is as under:
| Particulars | Amount (in Rupees) |
| Authorised Capital | |
| 50,000 Equity Shares of Rs.10/- each | 5,00,000 |
| TOTAL | 5,00,000 |
| Issued, subscribed and Paid-up Capital | |
| 25,000 equity shares of Rs 10 each, fully | 2,50,000 |
| TOTAL | 2,50,000 |
There are no Preference Shares issued or allotted by the Fourth Applicant Company.
xi. The objects of the Fourth Applicant Company are set out in the Memorandum of Association. They are briefly as under:
To carry on business as manufacturers, dealers, agents, importers, exporters and merchants of all kinds of rubber and rubber products, tread rubber, tread gum, retreading materials, foam rubber, bushes, mouldings, sheets, kattai sheets, vulcanising solution, flaps, channels, industrial linings, V-belts, transmission belts, conveyers, industrial and automobile belts, tubes, tyres and other compounds, articles and appliances made with or from and involving the use of natural rubber and synthetic rubber.
xii. As on the date of Application, the Fourth Applicant Company has 4 (Four) Equity Shareholders holding in aggregate 25,000 Equity Shares of Rs. 10 each. There are no Debenture holders or Deposit holders and Secured Creditors in the Fourth Applicant Company as on 31st day of March, 2021. There are 3 (Three) Unsecured Creditors having aggregate outstanding amount of Rs. 758/- as on 31st day of March, 2021 as per its books of accounts.
xiii. The Fifth Applicant Company, was incorporated on 14th March, 1980 with Corporate Identity Number U25191KL1980PTC003166. As per Sub-clause 5 of Clause III B of the Memorandum of Association, it has powers to amalgamate with any other Company. As per the latest Audited Balance Sheet, The Share Capital of as on the 31st day of March, 2021 is as under:
| Particulars | Amount (in Rupees) |
| Authorised Capital | |
| 10,000 Equity Shares of Rs.10/- | 1,00,000 |
| TOTAL | 1,00,000 |
| Issued, subscribed and Paid-up Capital | |
| 9,000 equity shares of Rs 10 each, | 90,000 |
| TOTAL | 90,000 |
There are no Preference Shares issued or allotted by the Fifth Applicant Company.
xiv. The objects of the Fifth Applicant Company are set out in the Memorandum of Association. They are briefly as under:
To carry on business as manufacturers, dealers, agents, importers, exporters and merchants of all kinds of rubber and rubber products, tread rubber, tread gum, retreading materials, foam rubber, bushes, mouldings, sheets, kattai sheets, vulcanising solution, flaps, channels, industrial linings, V-belts, transmission belts, conveyers, industrial and automobile belts, tubes, tyres and other compounds, articles and appliances made with or from and involving the use of natural rubber and synthetic rubber.
xv. As on the date of Application, the Fifth Applicant Company has 8 (Eight) Equity Shareholders holding aggregate 9,000 Equity Shares of Rs. 10 each. There are no Debenture holders or Deposit holders and Secured Creditors in the Fifth Applicant Company as on 31st day of March, 2021. There are 5 (Five) Unsecured Creditors having aggregate outstanding amount of Rs. 12,66,837.87/- as on 31st day of March, 2021 as per its books of accounts.
xvi. The Sixth Applicant Company, was incorporated on 14th March, 1980 with Corporate Identity Number U25191KL1980PTC003165. As per Sub Clause 5 of Clause III B of the Memorandum of Association, it has powers to amalgamate with any other Company. The Share Capital of the Sixth Applicant Company as on the 31st day of March, 2021, is as under:
| Particulars | Amount (in Rupees) |
| Authorised Capital | |
| 10,000 Equity Shares of Rs.10/- each | 1,00,000 |
| TOTAL | 1,00,000 |
| Issued, subscribed and Paid-up Capital | |
| 10,000 equity shares of Rs 10 each, fully | 1,00,000 |
| TOTAL | 1,00,000 |
There are no Preference Shares issued or allotted by the Sixth Applicant Company.
xvii. The objects of the Sixth Applicant Company are set out in the Memorandum of Association. They are briefly as under:
To carry on business as manufacturers, dealers, agents, importers, exporters and merchants of all kinds of rubber and rubber products, tread rubber, tread gum, retreading materials, foam rubber, bushes, mouldings, sheets, kattai sheets, vulcanising solution, flaps, channels, industrial linings, V-belts, transmission belts, conveyers, industrial and automobile belts, tubes, tyres and other compounds, articles and appliances made with or from and involving the use of natural rubber and synthetic rubber.
Presently, the company is having income earned out of the investments made over the period.
xviii. As on the date of Application, the Sixth Applicant Company has 11 (Eleven) Equity Shareholders holding aggregate 10,000 Equity Shares of Rs. 10 each. There are no Debenture holders or Deposit holders and Secured Creditors in the Sixth Applicant Company as on 31st day of March, 2021. There are 5 (Five) Unsecured Creditors having aggregate outstanding amount of Rs. 8,69,234/- as on 31st day of March, 2021 as per its books of accounts.
xix. The Seventh Applicant Company, was incorporated on 04th October, 1978 with Corporate Identity Number U51219KL1978PTC003009. As per Sub clause 5 of Clause III B of the Memorandum of Association, it has powers to amalgamate with any other Company. As per the latest Audited Balance Sheet, the Share Capital of the Seventh Applicant Company as on the 31st day of March, 2021 is as under:
| Particulars | Amount (in Rupees) |
| Authorised Capital | |
| 10,000 Equity Shares of Rs.10/- | 1,00,000 |
| TOTAL | 1,00,000 |
| Issued, subscribed and Paid-up Capital | |
| 10,000 equity shares of Rs 10 | 1,00,000 |
| TOTAL | 1,00,000 |
There are no Preference Shares issued or allotted by the Seventh Applicant Company.
xx. The objects of the Seventh Applicant Company are set out in the Memorandum of Association. They are briefly as under:
To establish and carry on the business of advisors to the plantation industry and render assistance and provide information on the management, cultivation, processing, manufacturing and marketing of all agricultural produce either in their raw, intermediary or finished state.
The manufacturing facilities of the Company are currently being used by one of the associate concerns of the company on lease basis.
xxi. As on the date of Application, the Seventh Applicant Company has 9 (Nine) Equity Shareholders holding aggregate 10,000 Equity Shares of Rs. 10 each. There are no Debenture holders or Deposit holders and Secured Creditors in the Seventh Applicant Company as on 31st day of March, 2021. There are 4 (Four) Unsecured Creditors having aggregate outstanding amount of Rs. 4,79,63,785/- as on 31st day of March, 2021 as per its books of accounts.
xxii. The Eighth Applicant Company, was incorporated on 11th September 1979 with Corporate Identity Number U25191KL1979PTC003101. As per Sub-clause 5 of Clause III B of the Memorandum of Association, it has powers to amalgamate with any other Company. As per the latest Audited Balance Sheet, the Share Capital of the Eighth Applicant Company as on the 31st day of March, 2021 is as under:
| Particulars | Amount (In Rupees) |
| Authorised Capital | |
| 50,000 Equity Shares of
Rs.10/- each |
5,00,000 |
| TOTAL | 5,00,000 |
| Issued, subscribed and Paid-up Capital | |
| 25,000 equity shares of Rs 10
each, fully paid |
2,50,000 |
| TOTAL | 2,50,000 |
There are no Preference Shares issued or allotted by the Eighth Applicant Company.
xxiii. The objects of the Eighth Applicant Company are set out in the Memorandum of Association. They are briefly as under:
To carry on business as manufacturers, dealers, agents, importers, exporters and merchants of all kinds of rubber and rubber products, tread rubber, tread gum, retreading materials, foam rubber, bushes, mouldings, sheets, kattai sheets, vulcanising solution, flaps, channels, industrial linings, V-belts, transmission belts, conveyers, industrial and automobile belts, tubes, tyres and other compounds, articles and appliances made with or from and involving the use of natural rubber and synthetic rubber.
Presently, the company is having rental income and income earned out of the investments made over the period.
xxiv. As on the date of Application, the Eighth Applicant Company has 6 (Six) Equity Shareholders holding aggregate 25,000 Equity Shares of Rs. 10 each. There are no Debenture holders or Deposit holders and Secured Creditors in the Eighth Applicant Company as on 31st day of March, 2021. There are 5 (Five) Unsecured Creditors having aggregate outstanding amount of Rs. 3,90,003/- as on 31st day of March, 2021 as per its books of accounts.
xxv. The Ninth Applicant Company, was incorporated on 14th March, 1980 with the Corporate Identity Number U25119KL1980PTC003169. As per Sub-clause 5 of Clause III B of the Memorandum of Association, it has powers to amalgamate with any other Company. As per the latest Audited Balance Sheets, the Share Capital of the Ninth Applicant Company as on the 31st day of March, 2021 is as under:
| Particulars | Amount (in Rupees) |
| Authorised Capital | |
| 1,00,000 Equity Shares of Rs.10/- each |
10,00,000 |
| TOTAL | 10,00,000 |
| Issued, subscribed and Paid-up Capital | |
| 8,800 equity shares of Rs 10 each, fully paid | 88,000 |
| TOTAL | 88,000 |
There are no Preference Shares issued or allotted by the Ninth Applicant Company.
xxvi. The objects of the Ninth Applicant Company are set out in the Memorandum of Association. They are briefly as under:
To carry on business as manufacturers, dealers, agents, importers, exporters and merchants of all kinds of rubber and rubber products, tread rubber, tread gum, retreading materials, foam rubber, bushes, mouldings, sheets, kattai sheets, vulcanising solution, flaps, channels, industrial linings, V-belts, transmission belts, conveyers, industrial and automobile belts, tubes, tyres and other compounds, articles and appliances made with or from and involving the use of natural rubber and synthetic rubber.
Presently, the company is having income earned out of the investments made over the period.
xxv. As on the date of Application, the Ninth Applicant Company has 8 (Eight) Equity Shareholders holding aggregate 8,800 Equity Shares of Rs. 10 each. There are no Debenture holders or Deposit holders and Secured Creditors in the Ninth Applicant Company as on 31st day of March, 2021. There are 4 (Four) Unsecured Creditors having aggregate outstanding amount of Rs. 8,400/- in the Ninth Applicant Company as on 31st day of March, 2021 as per its books of accounts.
xxvi. The Tenth Applicant Company, was originally incorporated as “Midas Machines Private Limited” on 05th September, 1990 with its name being changed to Midas Retreads India Private Limited on 06.06.1996 and the Corporate Identity Number is U25119KL1990PTC05794. As per Sub clause 5 of Clause III B of the Memorandum of Association, has powers to amalgamate with any other Company.
xxvii. As per the latest Audited Balance Sheet, the Share Capital of the Tenth Applicant Company as on the 31st day of March, 2021 is as under:
| Particulars | Amount (in |
| Authorised Capital | |
| 1,00,000 Equity Shares of Rs.10/- each | 10,00,000 |
| TOTAL | 10,00,000 |
| Issued, subscribed and Paid-up Capital | |
| 50,000 equity shares of Rs 10 each, fully paid | 5,00,000 |
| TOTAL | 5,00,000 |
There are no Preference Shares issued or allotted by the Tenth Applicant Company.
xxviii. The objects of the Tenth Applicant Company are set out in the Memorandum of Association. They are briefly as under:
To manufacture machines, purchase, take on lease or otherwise acquire machineries, accessories and fixtures and to lease, let on hire or rent out machineries, accessories and fixtures for processing, mixing and masticating of natural and synthetic rubber and for manufacture of all kinds of rubber goods.
Presently, the Company is engaged in the business of manufacture and sale of tyre retreading materials namely precured tread rubber, tread rubber and cushion gum.
xxix. As on the date of Application, the Tenth Applicant Company has 4 (Four) Equity Shareholders holding aggregate 50,000 Equity Shares of Rs. 10 each. There are no Debenture holders or Deposit Holders Secured Creditors in the Tenth Applicant Company as on 31st day of March, 2021. There are 34 (Thirty-Four) Unsecured Creditors having aggregate outstanding of Rs. 43,71,551/- in the Tenth Applicant Company as on 31st day of March, 2021 as per its books of accounts.
xxx. The Eleventh Applicant Company, was incorporated on 13th July, 1979 with Corporate Identity Number U25191KL1979PTC003086. As per Sub clause 5 of Clause III B of the Memorandum of Association, it has powers to amalgamate with any other Company. As per the latest Audited Balance Sheets, the Share Capital of the Eleventh Applicant Company as on the 31st day of March, 2021 is as under:
| Particulars | Amount (in Rupees) |
| Authorised Capital | |
| 10,000 Equity Shares of Rs.10/- each | 1,00,000 |
| TOTAL | 1,00,000 |
| Issued, subscribed and Paid-up Capital | |
| 10,000 equity shares of Rs. 10 each, fully | 1,00,000 |
| TOTAL | 1,00,000 |
There are no Preference Shares issued or allotted by the Eleventh Applicant Company.
xxxi. The objects of the Eleventh Applicant Company are set out in the Memorandum of Association. They are briefly as under:
To carry on business as manufacturers, dealers, agents, importers, exporters and merchants of all kinds of rubber and rubber products, tread rubber, tread gum, retreading materials, foam rubber, bushes, mouldings, sheets, kattai sheets, vulcanising solution, flaps, channels, industrial linings, V-belts, transmission belts, conveyers, industrial and automobile belts, tubes, tyres and other compounds, articles and appliances made with or from and involving the use of natural rubber and synthetic rubber.
Presently, the Company is engaged in the business of manufacture and sale of tyre retreading materials namely precured tread rubber, tread rubber and cushion gum.
xxxii. As on the date of Application, the Eleventh Applicant Company has 8 (Eight) Equity Shareholders holding in aggregate 10,000 Equity Shares of Rs. 10 each. There are no Debenture holders or Deposit Holders Secured Creditors in the Eleventh Applicant Company as on 31st day of March, 2021. There are 8 (Eight) Unsecured Creditors having aggregate outstanding amount of Rs. 8,62,322/- in the Eleventh Applicant Company as on 31st day of March, 2021 as per its books of accounts.
xxxiii. The Twelfth Applicant Company, was incorporated on 13th July, 1979 with the Corporate Identity Number U25191KL1979PTC003087.
As per Sub clause 5 of Clause III B of the Memorandum of Association, it has powers to amalgamate with any other Company. As per the latest Audited Balance Sheet, the Share Capital of the Twelfth Applicant Company as on the 31st day of March, 2021 is as under:
| Particulars | Amount (in Rupees) |
| Authorised Capital | |
| 50,000 Equity Shares of Rs.10/- | 5,00,000 |
| TOTAL | 5,00,000 |
| Issued, subscribed and Paid-up Capital | |
| 10,000 equity shares of Rs 10/- | 1,00,000 |
| TOTAL | 1,00,000 |
There are no Preference Shares issued or allotted by the Twelfth Applicant Company.
xxxiv. The objects of the Twelfth Applicant Company are set out in the Memorandum of Association. They are briefly as under:
To carry on business as manufacturers, dealers, agents, importers, exporters and merchants of all kinds of rubber and rubber products, tread rubber, tread gum, retreading materials, foam rubber, bushes, mouldings, sheets, kattai sheets, vulcanising solution, flaps, channels, industrial linings, V-belts, transmission belts, conveyers, industrial and automobile belts, tubes, tyres and other compounds, articles and appliances made with or from and involving the use of natural rubber and synthetic rubber.
xxxv. As on the date of Application, the Twelfth Applicant Company has 10 (Ten) Equity Shareholders holding in aggregate 10,000 Equity Shares of Rs. 10 each. There are no Debenture holders or Deposit holders and Secured Creditors in the Twelfth Applicant Company as on 31st day of March, 2021. There are 4 (Four) Unsecured Creditors having aggregate outstanding amount of Rs. 51,136/- in the Twelfth Applicant Company as on 31st day of March, 2021 as per its books of accounts.
xxxvi. The Thirteenth Applicant Company, was incorporated on 14th March, 1980 with the Corporate Identity Number is U25119KL1980PTC003167. As per Sub clause 5 of Clause III B of the Memorandum of Association, it has powers to amalgamate with any other Company. As per the latest Audited Balance Sheet, the Share Capital of the Thirteenth Applicant Company as on the 31st day of March, 2021 is as under:
| Particulars | Amount (in Rupees) |
| Authorised Capital | |
| 1,00,000 Equity Shares of Rs.10/- | 10,00,000 |
| each TOTAL |
10,00,000 |
| Issued, subscribed and Paid-up Capital | |
| 10,000 equity shares of Rs 10 each, | 1,00,000 |
| TOTAL | 5,00,000 |
There are no Preference Shares issued or allotted by the Thirteenth Applicant Company.
xxxvii. The objects of the Thirteenth Applicant Company are set out in the Memorandum of Association. They are briefly as under:
To carry on business as manufacturers, dealers, agents, importers, exporters and merchants of all kinds of rubber and rubber products, tread rubber, tread gum, retreading materials, foam rubber, bushes, mouldings, sheets, kattai sheets, vulcanising solution, flaps, channels, industrial linings, V-belts, transmission belts, conveyers, industrial and automobile belts, tubes, tyres and other compounds, articles and appliances made with or from and involving the use of natural rubber and synthetic rubber.
xxxviii. As on the date of Application, the Thirteenth Applicant Company has 10 (Ten) Equity Shareholders holding in aggregate 10,000 Equity Shares of Rs. 10 each. There are no Debenture holders or Deposit holders and Secured Creditors in the Thirteenth Applicant Company as on 31st day of March, 2021. There are 59 (Fifty-Nine) Unsecured Creditors having aggregate outstanding amount of Rs. 1,56,88,726.60/- in the Thirteenth Applicant Company as on 31st day of March, 2021 as per its books of accounts.
4. The applicants stated that in terms of Accounting Treatment of the Scheme, Inter-company balances, if any, between the Transferee Company and the Transferor Companies shall stand cancelled, All the assets, liabilities and reserves (including securities premium) recorded in the books of the Transferor Companies shall be transferred to and vested in the Transferee Company pursuant to the Scheme and shall be recorded by the Transferee Company at their respective book values and the difference between the amount recorded as share capital issued and the amount of share capital of the transferor company is adjusted in the reserves of the Transferee Company.
5. All the participating Companies owned by the Panampunna Family known as “Midas Group”. The Applicant Companies now proposes a scheme of amalgamation with a view to synergise and consolidate the resources. The Scheme of Amalgamation presented under Sections 230 to 232 of the Compaies Act, 2013 for Amalgamation of all 12 Transferor Companies with the Transferee Company (STANDARD TREADS PRIVATE LIMITED).
6. The Applicant Companies further stated that the scheme also provides for various other matters consequential or otherwise integrally connected with the above. This Scheme of Amalgamation will result in consolidation and streamlining of the group’s businesses and will facilitate the ending of cross holdings between the participating companies which have a hindrance for the corporate restructuring of the group businesses by ensuring a common shareholding pattern. The management has identified the following as the core commercial reasons in this regard:
i. Greater integration and greater financial strength and flexibility for the amalgamated entity, which would result in maximising overall shareholder value, and will improve the competitive position of the combined entity.
ii. Greater efficiency in cash management of the amalgamated entity, 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.
iii. Improved organizational capability and leadership, arising from the pooling of human capital who have the diverse skills, talent and vast experience to compete successfully in an increasingly competitive industry.
iv. Greater access by the amalgamated company to different market segments in the conduct of its business.
v. Cost savings are expected to flow from more focused operational efforts, rationalization, standardisation and simplification of business processes, and the elimination of duplication, and rationalization of administrative expenses.
7. The learned Counsel for the Applicant Companies argued that the Board of Directors of the Applicant Companies approved the Scheme of Amalgamation. The dates on which the Board of Directors of the Applicant Companies approved the Scheme is on 14.09.2021. All the 12 Transferor Companies with the Transferee Company would take effect from 01.04.2021, which is referred to as the ‘Appointed date of transfer’.
8. It is further stated that in pursuance of the proviso to Sec. 230 (7) and Section 232 (3) of the Act, the Applicant Companies have filed the certificate dated 04.10.2021 issued by Statutory Auditors of Amalgamating Companies and Transferee Company certifying that the Scheme is in compliance with the Accounting Standards under Section 133 of the Act has been produced ast Annexure A-43 of the application. Upon the Scheme becoming effective, all assets and liabilities, including reserves of the Transferor Companies shall be recorded in the books of the Transferee Company at their existing carrying values and in the same form as described in the Accounting Standard 14, issued by the Institute of Chartered Accountants of India. The identity of the reserves of the Transferor Companies shall be preserved and they shall appear in the financial statements of the Transferee Company in the same form and manner in which they appear in the financial statements of the Transferor Companies, prior to this Scheme being made effective. In case of any differences in accounting policies between the Transferor Companies and the Transferee Company, the accounting policies followed by the Transferee Company shall prevail to ensure that the financial statements of the Transferee Company reflect the financial position on the basis of consistent accounting policies.
9. The learned Counsel for the applicants further argued that pursuant to the Scheme coming into effect and without any further application, the Transferee Company shall issue and allot to all the equity shareholders of the Transferor Companies, whose names appears in the register of members as on the record date, fully paid-up equity shares in the following share entitlement ratio:
| Name of the Transferor Company |
No of shares of held in Transferor Company |
No of shares entitled in Transferee Company |
| Sabari Rubber Private Limited |
919 | 200 |
| Parampuzha Treads Private Limited |
34 | 3 |
| Kaveri Treads Private Limited |
300 | 35 |
| Sona Rubber Private Limited |
87 | 1 |
| Peacock Rubber Private Limited |
34 | 3 |
| Guardian Rubber Private Limited |
33 | 1 |
| Southern Agro Trades and Services Private Limited |
96 | 19 |
| Ideal Rubber Private Limited |
501 | 11 |
| Midland Treads Private Limited |
47 | 6 |
| Midas Re-treads India Private Limited |
206 | 3 |
| Zeus Rubber Private Limited |
25 | 1 |
| Sumeru Rubber Private Limited | 47 | 4 |
10. Vishesh Unni Raghunathan, an IBBI Registered Valuer (IBBI/RV/05/2019/11260) has issued the report on the Share Entitlement Ratio adopted under the Scheme. The aforesaid report on the Share Entitlement Ratio has been duly considered by the Board of Directors of all the Transferor Companies and Transferee Company. The share holding pattern of the Transferee Company after effecting the Scheme shall be in the following manner:
| Sl. No. | Name of the shareholder | Percentage of holding |
| 1 | Divya Varughese | 1.93 |
| 2 | George Varughese | 24.94 |
| 3 | Malini Mathew Varughese | 0.01 |
| 4 | Midas Butyl Products (I) Pvt. Ltd. | 0.55 |
| 5 | Midas Precured Treads Pvt. Ltd. | 3.13 |
| 6 | Midas Rubber Pvt. Ltd. | 8.83 |
| 7 | P.John Zachariah & Co.Pvt. Ltd. | 0.96 |
| 8 | Panampunna Estates Pvt. Ltd. | 11.87 |
| 9 | Paulose Varughese | 16.50 |
| 10 | Sarah Varughese | 15.22 |
| 11 | Thriveni Rubber Pvt.Ltd. | 1.52 |
| 12 | Varkey Varughese | 14.54 |
| TOTAL | 100 | |
Any fraction equal to or more than 0.5 arising out of such allotment shall be rounded off to the next higher integer and a fraction less than 0.5 shall be rounded off to the earlier lower integer.
11. The applicant Companies stated that upon the Scheme becoming effective and upon the New Equity Shares being issued and allotted as provided in this Scheme, the equity shares of the Transferor Companies shall be deemed to have been automatically cancelled and be of no effect on and from the Record Date.
12. The applicant Companies further stated that upon the Scheme becoming effective and upon the New Equity Shares being issued and allotted as provided in this Scheme, the equity shares held by the Transferor Companies in the Transferee Company prior to the amalgamation shall be deemed to have been automatically cancelled.
13. The Applicant Companies have also stated that there are no winding-up petitions been instituted or are pending in relation to the Applicant Companies under the Companies Act, 2013. It is further stated that no investigation proceedings have been instituted or are pending in relation to the Transferee Company/Applicant Companies under Sections 210 to 226 of the Companies Act, 2013.
14. We have heard the learned counsel for the Applicant Companies Shri Nebil Nizar, and have thoroughly perused the whole documents attached with the Application including the Scheme contemplated by the Applicant Companies.
15. The Applicant Companies has filed its Memorandum and Articles of Association inter alia delineating its object clause as well as their latest Audited Balance Sheet of the applicant Companies for the year ended 31.03.2021. It is understood that all the Applicant Companies are having registered office at Midas Marketing, Building, Varisserry, Mariathuruthu P.O., Kottayam-686027.
16. The Board of Directors of the Applicant Companies in its meeting held on 14.09.2021 unanimously approved the proposed Scheme as contemplated above and the copies of resolution passed thereon have been filed by the applicant Companies as Annexure 41 in this Application.
17. The appointed date as specified in the Scheme is 01.04.2021.
18. The Statutory Auditors of the Applicant Companies have examined the Scheme in terms of provisions of Section 232 of the Companies act, 2013 and rules made thereunder and certified that the Accounting standards are in compliance with Section 133 of the Companies Act, 2013.
19. For analysis, we refer to Section 230(2)(a) of the Act, which states that the company or any other person, by whom an application is made under sub-section (1), shall disclose to the Tribunal by affidavit— (a) all material facts relating to the company, such as the latest financial position of the company, the latest auditor’s report on the accounts of the company and the pendency of any investigation or proceedings against the company.
20. It is important to note here that Rule 24(2) of the Companies (Compromise, Arrangements and Amalgamation) Rules, 2016 has provided the Tribunal with the power to dispense with any procedure prescribed under the said rules. It read as-
“The Tribunal may pass any direction(s) or order dispense with any procedure prescribed by these rules in pursuance of the object for implementation of the scheme of arrangement or compromise or restricting or otherwise except on those matters specifically provided in the act.”
21. While considering the power of the Tribunal to dispense with the meeting of shareholders, we rely on the decision of the National Company Law Tribunal in the case of Jupiter Alloys & Steel (India) Limited V. Jupiter Wagons Limited (2017 SCC Online NCLT 14022), wherein it is stated that NCLT is empowered to dispense the meeting of shareholders by virtue of its inherent powers vested in NCLT by Rule 11 of the NCLT Rules, 2016. The NCLT, Kolkata Bench also made an observation that High Courts used to exercise their discretion to dispense the meeting of shareholders under the Companies Act, 2013 and such decisions cannot be ignored.
22. Under Section 230(9) of the Companies Act, 2013, the Tribunal may dispense with calling of a meeting of Creditors or class of Creditors where such Creditors or class of Creditors, having at least 90% value, agree and confirm, by way of affidavit, to the scheme of compromise or arrangement.
23. It is found that the Applicant Companies have received consent affidavits from all the Equity shareholders and No Objection Certificates (NOC) from the Unsecured Creditors regarding their unequivocal, unconditional consent to the scheme. In their respective consent affidavit, each of the Equity Shareholders has also waived their right for the notice for calling their meeting of the Equity shareholders and also waive the right to attend and participate in such meeting of the Equity shareholders or any other process in connection with the approval of the Scheme. The Unsecured Creditors in their NOC also mentioned that they do not have any objection against the Company seeking dispensation of holding of their meeting for approval of the Scheme as they already consent for the Scheme of Amalgamation.
24. In the IA (C/ACT) 37 KOB 2022 filed by the Applicant Companies, it is stated that there was difficulty in arranging the consent letters by way of an Affidavit from the unsecured creditors of the Applicant Company No.10 and No.13 as they are located in different parts of the country. It is stated that the Applicant Company No. 10 has 34 (Thirty-Four) unsecured creditors aggregating Rs. 43,71,551/- (Rupees Forty-Three Lakhs Seventy-One Thousand Five Hundred and Fifty-One only) and Applicant Company No.13 has 59 (Fifty-Nine) unsecured creditors aggregating Rs. 1,56,88,726/- (Rupees One Crore Fifty-Six Lakhs Eighty-Eight Thousand Seven Hundred and Twenty-Six only).
25. Taking into consideration the application filed by the applicant companies and the documents filed therewith as well as the position of law, and the circumstances enumerated herein above and in the light of the decision in Jupiter Alloys & Steel (India) Limited (supra), We are of the considered opinion that the prayers of the Applicant Companies deserve to be allowed and that the meetings of the members and publication of notice of meetings in the newspapers of the Transferor Companies and Transferee Company as envisaged under Section 230(1) of the Companies Act, 2013 is not necessary and will not serve any purpose, if called, be dispensed with subject to strict compliance of the conditions laid down herein below: –
I.
A. IN RELATION TO SABARI RUBBER PRIVATE LIMITED (First Applicant):
i. With respect to Equity Shareholders:
Since there are 8 Equity Shareholders in the company and the consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
ii. With respect to Secured Creditors:
Since there is NIL Secured Creditors in the company, the necessity of convening and holding the meeting does not arise.
iii. With respect to Unsecured Creditors:
Since there are 4 Unsecured Creditors in the company and the NOC/ consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
B. IN RELATION TO PARAMPUZHA TREADS PRIVATE LIMITED (Second Applicant):
i. With respect to Equity Shareholders:
Since there are 8 Equity Shareholders in the company and the consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
ii. With respect to Secured Creditors:
Since there is NIL Secured Creditors in the company, the necessity of convening and holding the meeting does not arise.
iii. With respect to Unsecured Creditors:
Since there are 5 Unsecured Creditors in the company and the NOC/ consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
C. IN RELATION TO KAVERI TREADS PRIVATE LIMITED (Third Applicant):
i. With respect to Equity Shareholders:
Since there are 10 Equity Shareholders in the company and the consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
ii. With respect to Secured Creditors:
Since there is NIL Secured Creditors in the company, the necessity of convening and holding the meeting does not arise.
iii. With respect to Unsecured Creditors:
Since there are 5 Unsecured Creditors in the company and the NOC/ consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
D. IN RELATION TO SONA RUBBER PRIVATE LIMITED (Fourth Applicant):
i. With respect to Equity Shareholders:
Since there are 4 Equity Shareholders in the company and the consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
ii. With respect to Secured Creditors:
Since there is NIL Secured Creditors in the company, the necessity of convening and holding the meeting does not arise.
iii. With respect to Unsecured Creditors:
Since there are 3 Unsecured Creditors in the company and the NOC/ consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
E. IN RELATION TO PEACOCK RUBBERS PRIVATE LIMITED (Fifth Applicant):
i. With respect to Equity Shareholders:
Since there are 8 Equity Shareholders in the company and the consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
ii. With respect to Secured Creditors:
Since there is NIL Secured Creditors in the company, the necessity of convening and holding the meeting does not arise.
iii. With respect to Unsecured Creditors:
Since there are 5 Unsecured Creditors in the company and the NOC/ consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
F. IN RELATION TO GUARDIAN RUBBER PRIVATE LIMITED (Sixth Applicant) :
i. With respect to Equity Shareholders:
Since there are 11 Equity Shareholders in the company and the consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
ii. With respect to Secured Creditors:
Since there is NIL Secured Creditors in the company, the necessity of convening and holding the meeting does not arise.
iii. With respect to Unsecured Creditors:
Since there are 5 Unsecured Creditors in the company and the NOC/ consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
G. IN RELATION TO AGRO TRADES AND SERVICES PRIVATE LIMITED (Seventh Applicant):
iv. With respect to Equity Shareholders:
Since there are 9 Equity Shareholders in the company and the consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
v. With respect to Secured Creditors:
Since there is NIL Secured Creditors in the company, the necessity of convening and holding the meeting does not arise.
vi. With respect to Unsecured Creditors:
Since there are 4 Unsecured Creditors in the company and the NOC/ consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
H. IN RELATION TO IDEAL RUBBER PRIVATE LIMITED (Eight Applicant):
vii. With respect to Equity Shareholders:
Since there are 6 Equity Shareholders in the company and the consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
viii. With respect to Secured Creditors:
Since there is NIL Secured Creditors in the company, the necessity of convening and holding the meeting does not arise.
ix. With respect to Unsecured Creditors:
Since there are 5 Unsecured Creditors in the company and the NOC/ consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
I. IN RELATION TO MIDLAND TREADS PRIVATE LIMITED (Ninth Applicant):
x. With respect to Equity Shareholders:
Since there are 8 Equity Shareholders in the company and the consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
xi. With respect to Secured Creditors:
Since there is NIL Secured Creditors in the company, the necessity of convening and holding the meeting does not arise.
xii. With respect to Unsecured Creditors:
Since there are 4 Unsecured Creditors in the company and the NOC/ consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
J. IN RELATION TO MIDAS RETREADS INDIA PRIVATE LIMITED (Tenth Applicant):
xiii. With respect to Equity Shareholders:
Since there are 4 Equity Shareholders in the company and the consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
xiv. With respect to Secured Creditors:
Since there is NIL Secured Creditors in the company, the necessity of convening and holding the meeting does not arise.
xv. With respect to Unsecured Creditors:
Since there are 34 Unsecured Creditors in the company and no NOC/ consent affidavits obtained from them, the meeting is to be conducted as per order no. (II) here under.
K. IN RELATION TO ZEUS RUBBER PRIVATE LIMITED (Eleventh Applicant):
xvi. With respect to Equity Shareholders:
Since there are 8 Equity Shareholders in the company and the consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
xvii. With respect to Secured Creditors:
Since there is NIL Secured Creditors in the company, the necessity of convening and holding the meeting does not arise.
xviii. With respect to Unsecured Creditors:
Since there are 8 Unsecured Creditors in the company and the NOC/ consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
L. IN RELATION TO SUMERU RUBBER PRIVATE LIMITED (Twelfth Applicant):
xix. With respect to Equity Shareholders:
Since there are 10 Equity Shareholders in the company and the consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
xx. With respect to Secured Creditors:
Since there is NIL Secured Creditors in the company, the necessity of convening and holding the meeting does not arise.
xxi. With respect to Unsecured Creditors:
Since there are 4 Unsecured Creditors in the company and the NOC/ consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
M. IN RELATION TO STANDARD TREADS PRIVATE LIMITED (Thirteenth Applicant):
xxii. With respect to Equity Shareholders:
Since there are 10 Equity Shareholders in the company and the consent affidavits obtained from them are placed on record, the necessity of convening and holding the meeting is dispensed with.
xxiii. With respect to Secured Creditors:
Since there is NIL Secured Creditors in the company, the necessity of convening and holding the meeting does not arise.
xxiv. With respect to Unsecured Creditors:
Since there are 59 Unsecured Creditors in the company and no NOC/ consent affidavits obtained from them, the meeting is to be conducted as per order no. (II) here under.
II. With respect to Unsecured Creditors of applicant companies No. 10 and 13, meeting is directed to be held on 16.06.2022 at 10.30 AM at the Registered Office of the Company or through video conferencing. The quorum for the meeting of the Unsecured Creditors of the Transferor Company (10)/ Transferee Company (13) shall be 10.
a. Adv. Ameerul Millath, Advocate, Millath and Associates, Rahman Towers, Near Manath Stores, NGO Quarters, Thrikkakara P O, Cochin – 682021 (Mob: 9895422203, email: [email protected]) is appointed as the Chairperson for the above said meetings and the alternative Chairperson appointed for the above said meeting shall be Shri. Varkey Varghese, resident at Panampunnayil, Mariathuruthu, Kottayam-686017, who is one of the Directors of the Applicant Companies who has sworn in affidavit on behalf of the respective Applicant Companies. The fee of the Chairperson for the aforesaid meeting shall be Rs. 75,000/- (Rupees Seventy-Five Thousand Only) in addition to his incidental expenses.
b. Adv. Nidhi Jacob, C4, Lotus Enclave, Puthukkalavattom Road, Elamakkara, Ernakulam- 68 2017 (Mob: 9582513160, Email: [email protected]), is appointed as a Scrutinizer. She would be entitled to fee of Rs. 30,000/- (Rupees Thirty Thousand Only) in addition to incidental expenses. The Chairperson will file the report of the meeting within a week from the date of holding of the above said meetings.
c. In case the quorum as noted above, for the above meetings of the Applicant Companies No. 10 & 13 is not present, then the meeting shall be adjourned by half an hour, and thereafter the person(s) present and voting shall be deemed to constitute the quorum. For the purpose of computing the quorum the valid proxies shall also be considered, if the proxy in the prescribed form, duly signed by the person entitled to attend and vote at the meeting, is filed in the Registered Office of the Applicant Companies at least 48 hours before the meeting. The Chairperson and Alternative Chairperson appointed herein along with the Scrutinizer shall ensure that the proxy registers are properly maintained. However, every endeavour should be made by the Applicant Companies to attain at least the quorum fixed, if not more in relation to approval of the scheme.
d. The meetings shall be conducted either by way of physical means or by video or other audio visual means enabled with e—voting as per applicable procedure prescribed under the MCA General Circular Nos. (i) 20/2020 dated 5th May, 2020 (AGM Circular), (ii) 14/2020, dated 08.04.2020 (EGM Circular—I) and (iii) 17/2020 dated 13.04.2020 (EGM Circular-II);
e. That individual notices of the above said meetings shall be sent by the Applicant Companies through registered post or speed post or through courier or e—mail, 30 days in advance before the scheduled date of the meeting, indicating the day, date, the place and the time as aforesaid, together with a copy of Scheme, copy of explanatory statement, required to be sent under the Companies Act, 2013 and the prescribed form of proxy shall also be sent along with it, and in addition to the above any other documents as may be prescribed under the Act or Rules may also be duly sent with the notice.
f. That the Applicant Companies shall publish advertisement with a gap of atleast 30 clear days before the aforesaid meetings, indicating the day, date and the place and time as aforesaid, to be published in the English Daily “Business Standard” (All India Edition), and “Mathrubhoomi” Malayalam (Kerala Edition) in Vernacular stating the copies of Scheme, the Explanatory Statement required to be furnished pursuant to Section 230 of the Companies Act, 2013 and the form of proxy shall be provided free of charge at the Registered Office of the respective Applicant Companies.
g. Voting shall be allowed on the proposed Scheme by voting in person. The Chairperson shall as aforestated be responsible to report the result of the meeting within a period of 3 days of the conclusion of the meeting with details of voting on the proposed scheme.
h. The Applicant Companies shall further furnish copy of the Scheme free of charge within two days of any requisition for the Scheme made by every creditor or member of the Applicant Companies entitled to attend the meetings as aforesaid.
i. The Authorized Representative of the Applicant Company shall furnish an affidavit of service of notice of meetings and publication of advertisement and compliance of all directions contained herein at least a week before the proposed meetings.
j. All the aforesaid directions are to be complied with strictly in accordance with the applicable law including forms and formats contained in the Companies (Compromises, Arrangements, Amalgamations) Rules, 2016 as well as the provisions of the Companies Act, 2013 by the Applicants.
III. The Applicant Companies shall serve the notices upon their Unsecured Creditors, as on date of passing of this order having outstanding debt amounting to not less than five percent of total outstanding debt of the Companies as per the list of creditors as of today. Similar action shall also be taken by the transferee company in respect of the current equity shareholders i.e. shareholders as of toda, having shares of not less than five percent of the subscribed share capital of the Transferee Company. If no response is received from such creditors within 30 days of receipt of the notice, it shall be presumed that such creditors have no objection to the proposed Scheme.
IV. The notices to be served under Section 230 (5) of the Companies Act,2013 as aforesaid shall contain all disclosures as mentioned in Rule 6 (3) of the Companies (Compromise, Arrangements and Amalgamations) Rules, 2016 irrespective of the fact that meetings have been dispensed with.
V. Advertisement of despatch of notices to the creditors and equity shareholders as above shall be published in accordance with Rule 7 of the Companies (Compromise, Arrangements and Amalgamations) Rules, 2016 with suitable changes as may be practicable.
VI. The applicant Companies shall host the notices along with the copy of the Scheme on their respective websites, if any or shall furnish the Scheme free of charge within two days of any requisition for the same made by every creditor as mentioned in the above or members of the concerned Applicant Companies.
VII. The Applicant companies shall serve notice upon the Regional Director, Ministry of Corporate Affairs, Registrar of Companies, Kerala, Income Tax Department within whose jurisdiction the assessments of the Applicant Companies are made, the Official Liquidator, High Court of Kerala in case of both the Applicant Companies and BSE, NSE and SEBI in case of transferee company, pursuant to Section 230(5) of the Companies Act, 2013 read with Rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. If no response is received from the aforesaid authorities within 30 days of date of receipt of the notice, it would be presumed that such authorities have no objection to the proposed Scheme of Amalgamation. This facts should be mentioned in the notice, while the notice are issued to the aforesaid authorities.
VIII. The Applicant companies shall file compliance report of the above said directions with the Registry of this Tribunal.
IX. Failure to comply with the Order No. (II) to (VII), the order for dispensing with the meeting of the Members/Shareholders and unsecured creditors of both the companies (Applicant Companies No. 10 & 13) shall be cancelled automatically.
X. The applicant Companies are directed to present a Company Application (CP(CAA)) to this Tribunal in Form No.CAA-5 for sanction of the Scheme of Amalgamation.
26. Accordingly, this Company Application CA (CAA)/ 1/ KOB/ 2022 stands allowed.
27. In view of the order to call the meeting of the Unsecured Creditors in Applicant Companies No. 10 & 13, the IA (C/ACT) 37/ KOB/ 2022 stands disposed of.
Dated this the 5th day of May, 2022
