2007 (9) TMI 375 - HC - Companies Law

Amalgamation - Held that - As the learned Counsel during the course of hearing has placed on record copy of the order dated 27-4-2007 passed by the High Court of Bombay at Goa in Company Petition No. 7 of 2007, whereby the sanction has been granted in respect of one of the Transferor Companies namely, Goa International School Pvt. Ltd. It has been further stated that the matter is awaited for sanction in the appropriate proceedings so far as another Transferor Company is concerned by the High Court of Karnataka. Hence, the sanction even if it is to be granted by this Court, would be subject to the orders of the High Court of Karnataka since the scheme of Amalgamation is a composite and inter-connected. Ordered accordingly.

Summary

Issues involved:
1. Sanctioning the Scheme of Amalgamation
2. Compliance with provisions of the Companies Act
3. Change of name and compliance with statutory provisions
4. Granting sanction subject to orders of other High Courts

Analysis:

Issue 1: Sanctioning the Scheme of Amalgamation
The petition was filed for sanctioning the Scheme of Amalgamation, with the petitioner being the Transferee Company. The Scheme involved two Transferor Companies, Goa International School Pvt. Ltd. and Laguna Kumarakom Resorts Pvt. Ltd. The court had earlier dispensed with the meeting of equity shareholders and unsecured creditors. Public advertisements were issued, and no objections opposing the Scheme were received. The Central Government raised objections, but it was argued that once the scheme is sanctioned, no additional stamp duty or registration charges are required. The court rejected the objections, emphasizing that there should be no double recovery of stamp duty and that the Transferee Company should not benefit unduly from the amalgamation.

Issue 2: Compliance with provisions of the Companies Act
The objections raised by the Central Government regarding compliance with sections 17, 94/97, and 21 of the Companies Act were addressed. The court referred to previous decisions and concluded that the objections could not be maintained except for filing necessary forms with the Registrar of Companies for changes resulting from the scheme. The companies were directed to file the required forms and pay the requisite fees, considering the fees already paid by the Transferor Companies.

Issue 3: Change of name and compliance with statutory provisions
The objections related to the change of name and compliance with sections 17 and 21 of the Act were discussed. The court referred to previous judgments and held that the scheme proceedings under sections 391-394 provide a "single window clearance." The companies were directed to file necessary forms with the Registrar of Companies to record the changes. The pending proceedings against the demerged company were allowed to continue in accordance with the law.

Issue 4: Granting sanction subject to orders of other High Courts
The court noted that the sanction of the scheme would be subject to the orders of the High Court of Karnataka since the amalgamation scheme was interconnected. The Scheme of Amalgamation for the Petitioner Company was sanctioned as per the provisions of the Companies Act, subject to the observations and directions provided.

In conclusion, the petition was allowed, and the Assistant Solicitor General's fees were to be paid by the petitioning Company. The judgment comprehensively addressed the issues of amalgamation, compliance with statutory provisions, and coordination with other High Courts in granting sanction for the scheme.