- (1.) The present Company Application bearing CA(CAA) No.204/230/HDB/2017, is filed by S & P Capital IQ (India) Private Limited (Transferor Company) and SNL Financial (India) Private Limited (Transferee Company) , under Sections 230 to 232 of the Companies Act, 2013, by inter-alia seeking the following reliefs:- a) To dispense with the meeting of the Equity Shareholders of both the Applicant Companies or alternatively, if the Applicant Companies' prayer for dispensation of the said meeting is rejected, direct that the meeting of the Equity Shareholders of the Applicant Companies' be held on such date and time as this Bench may deem fit for the purpose of considering, and if thought fit, approving, with or without modification(s) , the Scheme, and that a Chairman be appointed for the meeting and necessary directions may be given with regard to issue of notice, convening, holding and conducting of the meeting, and pass orders dispensing with publication of notice of the meeting in the newspapers, if the said meeting is not convened; and b) To dispense with the meeting of the Creditors of both the Applicant Companies or alternatively, if the Applicant Companies' prayer for dispensation of the said meeting is rejected, direct that the meeting of the Creditors of the Applicant Companies' be held on such date and time as this Bench may deem fit for the purpose of considering, and if thought fit, approving, with or without modification(s) , the Scheme, and that a Chairman be appointed for the meeting and necessary directions may be given with regard to issue of notice, convening, holding and conducting of the meeting, and pass orders dispensing with publication of notice of the meeting in the newspapers, if the said meeting is not convened;
(2.) When the case was posted for the first time on 21.11.2017, Counsel for the Applicant Companies, agreed to amend the prayer by seeking direction to conduct meeting instead of conditional prayer and posted the matter on 04.12.2017. During the hearing held on 04.12.2017, Counsel for the Applicant Companies appeared and sought time to file application amending the prayer and to file affidavit pertaining urgency in the case and posted the case on 15.12.2017. Accordingly, the Applicant Companies filed an Affidavit dated 14.12.2017 stating the following:- a) The Transferor Company is a wholly owned subsidiary of the Transferee Company and both the companies and their respective shareholders are private and unlisted companies, being part of the same group with no public interest involved and all the shareholders of both the Companies have already consented to the composite Scheme of Arrangement (Scheme) through the consent letters expressing their approval to the Scheme. b) Holding shareholders' meetings after a normal notice period, would lead to considerable purposeless delay which would adversely impact the desired merger objective i.e. simplification of group structure in India by eliminating multiple companies at the earliest in order to minimise business complexities and maximise operational efficiencies through avoidance of costs of operating both the entities including cost of various statutory compliances. c) Lapse of time on account of holding shareholders' meetings coupled with additional cost of operating both the Transferor Company and the Transferee .Company would defeat the main purpose behind the Companies' strategic decision of entering into the scheme and reduce the effectiveness thereof. d) Furthermore, convening the shareholders' meeting upon shorter notice, for which the written consents from both shareholders have already been obtained. The Transferee Company proposes to file an Advance Pricing Agreement (APA) with the Indian Tax authorities, to be made effective from 01.04.2018 for upto five years and with a role back for the past four years i.e. till financial year 2014-15, to address the transfer pricing of the inter-company services to be provided by the Transferee Company and to achieve tax certainty and a delay in the conclusion of such shareholders' meeting may adversely impact such application. e) The Income Tax Act, 1961 read with Rules made there under provides that the APA application may be filed at the any time "(i) before the first day of the previous year relevant to the first assessment year for which the application is made, in respect of transactions which are of a continuing nature from dealings that are already occurring; or (ii) before undertaking the transaction in respect of remaining transactions." f) Accordingly, if the APA application is filed anytime on or after 01.04.2018, ,the Transferee Company will lose out on one year of the roll back period i.e. financial year 2014-2015 from the ambit of APA which would lead to tax uncertainty and needlessly increased costs to the Transferee Company. g) It is further submitted that 96.69% of total unsecured creditors in value of the Transferee Company outstanding as on 30th September, 2017 and 97.78% of total unsecured creditors in value of the Transferor Company outstanding as on 30th September, 2017, have already given their consent in writing to the Scheme and the same were attached to the joint Application. That all the Unsecured Creditors of Applicant Companies outstanding as on 30.09.2017 have already been paid off by the Applicant Companies as on 30.11.2017. Therefore, there is no requirement to convene the meetings of the unsecured creditors of the Applicant Companies. h) The Applicant Companies do not have any Secured Creditors. i) In view of the above, it is. submitted that the Applicant Companies be allowed to amend the 1st Prayer made in the paragraph pertaining to the reliefs sought in the Company Application No.204/230/HDB/2017 to amend 1st Prayer and replace the same with the following prayer: "To direct that the meeting of the Equity Shareholders of the Applicant Companies be held at a shorter notice on 22.12.2017 at 10 AM and 11 AM respectively at the registered office of the Applicant Companies for the purpose of obtaining the approval of the shareholders of the Applicant Companies to the Scheme of Arrangement, that the quorum for the said meeting be fixed as two (2) members present in person or through proxy, that a Chairman be appointed for convening the said meetings, that the publication of notice of the meetings of the Equity Shareholders of the Applicant Companies be carried out in Andhra Prabha (Telugu Daily) and Business Standard (English daily) Hyderabad editions and that the Chairman shall file his reports on the result of the meeting with the Hon'ble Bench within three (3) days from the date of such meetings." The Affidavit filed by the Applicant Companies taken on record.
(3.) Brief facts leading to the filing of present case are as follows: I) In respect of 1st Applicant/Transferor Company: (a) S & P Capital IQ (India) Private Limited, the Transferor Company was incorporated as a Private Limited Company on 09.11.1994, under the Companies Act, 1956 with Corporate Identity Number U72200TG1994PTC018719. (b) The Authorised share capital as on 31.03.2017 is Rs. 1,20,00,000/-divided into 1,20,000 equity shares of Rs.100/- each. The issued, subscribed and paid up share capital is Rs.71,75,000/- divided into 71,750/- equity shares of Rs.100/- each. (c) The main objects of Company as set out in its Memorandum, in brief, are to render consultancy and other services in the field of computers and software development, to develop programmes and systems including projects those based on CD-ROM, etc. II) In respect of 2"d Applicant/Transferee Company: (a) SNL Financial (India) Private Limited, the Transferee Company was originally incorporated as a Private Company on 24.09.2004 under the Companies Act, 1956 with Corporate Identity Number U67110TG2004PTC119619. (b) The Authorised share capital as on 31.03.2017 is Rs.65,00,00,000/-divided into 65,00,000 equity shares of Rs.10/- each. The issued, subscribed and paid up share capital is Rs.60,68,100/- divided into 6,06,810 equity shares of Rs.10/- each. (c) The main objects of Company, as set out in its Memorandum, in brief, are to act as a financial information provider by gathering, collating, organizing, arranging, storing and transmitting all types of financial, marketing, industrial and commercial information etc.;