The Regional Director (Eastern ... vs Camden Industries Ltd. & Ors

The Regional Director (Eastern Region), Ministry of Corporate Affairs. ...Appellant

Vs.

Camden Industries Limited and Ors. ...Respondents

Present: For Appellant: - Ms. Richa Kukreja, Joint Director.

For Respondents: - Mr. Mainak Bose and Mr. Nikhil Jhunjhunwala, Advocates.

O R D E R

22.02.2019─ An application under Sections 230 and 232 of the

Companies Act, 2013 read with Companies (Compromise, Arrangement

and Amalgamation) Rules 2016 was filed by 'Camden Industries Limited'-

(Transferor Company No.1); 'Highgate Industries Limited'- (Transferor

Company No.2) along with 'Euston Industries Limited'- (Transferee

Company) before the National Company Law Tribunal, Kolkata Bench

(hereinafter referred to as "Tribunal").

2. After following all the procedure, when the matter was taken up,

the Petitioner Companies brought to the notice of the Tribunal that in

terms of Section 230(7) of the Companies Act, 2013, the Statutory Auditor

of the transferee company has certified that the Accounting Treatment is

in conformity with the Accounting Standards under Section 133 of the

Company Appeal (AT) No. 07 of 2019 2 Companies Act, 2013. The copy of the said certificate was annexed along

with the application.

3. It was further brought to the notice of the Tribunal that the

exchange ratio of the shares of the Transferor Companies and the

Transferee Company has been fixed at a fair and reasonable basis and

the valuation of shares have been certified by the Statutory Auditor. In

support of such plea the Valuation Report was enclosed. It was also

pleaded that the Scheme of Arrangement for Amalgamation was also for

the benefit of the Petitioner Companies and their shareholders, creditors,

employees and all concerned.

4. The Appellant- Regional Director, Eastern Region, Ministry of

Corporate Affairs, has raised one objection with regard to 'Camden

Industries Limited' which according to him was functioning as 'NBFC'

without necessary registration from the Reserve Bank of India under

Section 451 A of the Reserve Bank of India Act, 1934. It is stated that

instructions were also sought from the Income Tax Department but they

have not received any reply. However, it is accepted that on the

examination of the report, the Registrar of Companies has informed that

there is no complain or objection filed against the proposed Scheme of

Amalgamation.

5. Having noticed the aforesaid stand by the Regional Director and

the stand taken by the Petitioners (Transferor Companies and the

Transferee Company) and the report of the Official Liquidator dated 31st

August, 2018, which is in support of the 'Camden Industries Limited' and Company Appeal (AT) No. 07 of 2019 3

'Highgate Industries Limited', the Tribunal by impugned order dated 27th

September, 2018 conditionally sanctioned the Scheme.

6. Learned counsel appearing on behalf of the Appellant reiterated

that the 'Camden Industries Limited'- (Transferor Company No.1) was

functioning as 'NBFC', without necessary registration from the Reserve

Bank of India.

7. In reply to the same, the Respondents have taken specific plea as

was taken before the Tribunal that the Transferor Company No.1 was

primarily engaged in manufacturing business. The Transferor Company

No.1 was never carried on any financial activities as its main business,

which is not in dispute.

8. There is nothing on the record to suggest that the Transferor

Company No.1 was engaged in or carrying on financial activities. In

absence of any such report of any of the Competent Authority or

complaint made by any party and all the reports being in support of the

Transferor Companies, we find no reason to interfere with the impugned

order. In absence of any merit, the appeal is dismissed. No cost.

(Justice S.J. Mukhopadhaya) Chairperson

Ar/g Company Appeal (AT) No. 07 of 2019