1998 (11) TMI 502 - HC - Companies Law

Summary

Issues:
Amalgamation under section 394, read with section 391(2) of the Companies Act, 1956.

Detailed Analysis:

1. Petition for Amalgamation:
- Allied Coatings and Compounds Ltd., as the transferor company, filed C.P. No. 135 of 1998 seeking amalgamation with ITW Signode India Limited, the transferee company, under section 394, read with section 391(2) of the Act.

2. Company Details:
- The transferor company was initially a private limited company which later became a deemed public company. The transferor company's authorized share capital, issued, subscribed, and paid-up capital, along with its business objectives, were outlined.

3. Transferee Company Details:
- Details regarding the transferee company's history, name changes, business activities, and financial status were provided, emphasizing its role in manufacturing engineering goods and the need for a special coating.

4. Purpose of Amalgamation:
- The rationale behind the proposed amalgamation included reducing costs, enhancing control, improving infrastructure, operational synergy, and gaining better bargaining power with suppliers and banks.

5. Approval and Meeting Details:
- The Board of directors approved the scheme of amalgamation, and meetings of shareholders of both companies were conducted, resulting in the approval of the scheme.

6. Reports and Official Liquidator's Opinion:
- Reports from the Central Government, Regional Director, and Official Liquidator were submitted, supporting the amalgamation based on cost reduction, improved control, and operational synergy.

7. Misstatement in Company Petition:
- An issue was raised regarding a misstatement in the company petition about the transferee company's object clause related to water-soluble paints, which was clarified by referencing the correct clause in the memorandum of association.

8. Court's Decision:
- The court accepted the submissions and ordered the amalgamation of the transferor company with the transferee company without any further act or deed, effective from 1-4-1998, as per the proposed scheme. All rights, liabilities, and duties of the transferor company would transfer to the transferee company, leading to the dissolution of the transferor company without winding up.

9. Conclusion:
- Both petitions were disposed of, directing the transferee company to file a copy of the order with the Registrar of Companies for dissolution of the transferor company and allowing interested parties to seek appropriate directions from the court if needed.

This detailed analysis covers the legal judgment involving amalgamation under the Companies Act, 1956, highlighting the key aspects, company details, purpose of amalgamation, approval process, court's decision, and the final outcome.