1995 (5) TMI 217 - HC - Companies Law

Summary

Issues:
Petition for sanction of the scheme of amalgamation of multiple companies with Gulmohar Finance Limited, approval of the scheme by shareholders and creditors, objection raised by the Central Government regarding valuation and share transfer ratio.

Analysis:
The petition before the High Court of Delhi sought sanction for the scheme of amalgamation involving several companies with Gulmohar Finance Limited, emphasizing the anticipated benefits such as economies of scale, improved resource utilization, and enhanced productivity and profitability. The absence of any pending proceedings under relevant sections of the Companies Act, 1956 against the involved companies was highlighted.

The Court noted that notice was duly served to the Official Liquidator and the Central Government, and public notifications were issued, with no opposition received from any party. Meetings of shareholders and creditors were conducted as per the Court's order, and the scheme of amalgamation was approved by the concerned parties.

The Official Liquidator's report confirmed that the transferor-company's affairs were not prejudicial to stakeholders or public interests, suggesting dissolution without winding up. An objection from the Central Government regarding valuation and share transfer ratio was raised, but it was countered by the applicant, asserting compliance with relevant rules and minimal creditor involvement.

The Regional Director of the Department of Company Affairs affirmed that the companies' affairs were conducted in a non-prejudicial manner. After considering all submissions and approvals, the Court found merit in sanctioning the amalgamation scheme, declaring it binding on all shareholders and creditors involved, with assets, liabilities, and reserves transferring to the transferee-company.

In conclusion, the Court sanctioned the scheme of amalgamation, directing the Registry to prepare a formal order within the specified timeline for filing with the Registrar of Companies. The judgment aimed at facilitating the amalgamation process and ensuring its legal validity and enforceability.