NCLT Dismisses Amalgamation Petition due to Non-Compliance with Companies Act and Shareholders’ Interests
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- Last Updated on 19 July, 2023
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Case Details: Vanraj Suppliers (P.) Ltd. (VSPL) v. Shree Shyam Tea (P.) Ltd. (SSTPL) - [2023] 152 taxmann.com 41 (NCLT-Guwahati)
Judiciary and Counsel Details
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- Deep Chandra Joshi, Judicial Member & Prasanta Kumar Mohanty, Technical Member
- Neha Somani, CS for the Petitioner.
Facts of the Case
In the instant case, the petitioner (i.e. Transferor Company) filed an application under section 232(3) of the Companies Act, 2013 seeking approval of the amalgamation scheme with the respondent (i.e. Transferee Company) and their respective shareholders.
In the application for amalgamation, it had been stated that Shareholders of the Petitioner Companies had given their written consents by way of affidavits and, copies of the said affidavits had been annexed with the company application.
The Chartered Accountants of the transferee company submitted that the accounting treatment proposed in the Scheme of Amalgamation was in conformity with the Accounting Standards prescribed under section 133 of the Companies Act, 2013 and in compliance with the proviso to section 230(7) of the Companies Act, 2013.
It was noted that the RBI, through its press release, had cancelled the registration certificate of the transferor company. Further, it was noted that the cancellation of license of the transferor company by the RBI and the shifting of the company from one State to another just after the cancellation of the license was not brought to the notice of the instant Tribunal during the first motion of hearing.
NCLT Held
The NCLT held that since publishing an advertisement in widely circulated newspapers in both States was required in the interest of all stakeholders, the statutory requirement of sections 230 and 232 of the Companies Act, 2013 had not been complied with.
Therefore, the proposed scheme of amalgamation of companies was not to be sanctioned in the interest of all shareholders. Hence, the petition was to be dismissed.
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