2003 (8) TMI 361 - HC - Companies Law

Issues Involved:
1. Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956
2. Approval and Meetings of Equity Shareholders
3. Compliance with Legal Requirements and Reports from Official Liquidator and Regional Director
4. Financial Position and Auditor's Reports of the Companies
5. Sanction of the Proposed Scheme and Dissolution of Transferor Companies

Detailed Analysis:

1. Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956:
The petition was filed by three companies: Telesia Trading and Finance Ltd. (transferee company), Gobind Vanijya Ltd. (transferor company No. 1), and Ujala Mercantiles Ltd. (transferor company No. 2) under sections 391 and 394 of the Companies Act, 1956, seeking the court's sanction for a proposed scheme of amalgamation. The scheme proposed the amalgamation of the two transferor companies with the transferee company and their subsequent dissolution without winding up.

2. Approval and Meetings of Equity Shareholders:
The court directed separate meetings of the equity shareholders of the transferee and transferor companies. The meetings were held on 19 April 2003, chaired by Sri Ajai Bhanot, Advocate. The resolutions approving the scheme of amalgamation were passed unanimously in each meeting, with 100% attendance of voting strength in the transferee company, 99.76% in transferor company No. 1, and 99.98% in transferor company No. 2.

3. Compliance with Legal Requirements and Reports from Official Liquidator and Regional Director:
Notices were published in newspapers and served to the Official Liquidator and the Regional Director, Northern Region, Department of Company Affairs. The Official Liquidator submitted Report No. 172 of 2003, confirming that the affairs of the transferor companies were not managed prejudicially to their members or the public. The Regional Director also filed a representation stating no objection to the proposed scheme and highlighted that the regular employees of the transferor companies would become employees of the transferee company without any break in service.

4. Financial Position and Auditor's Reports of the Companies:
The financial positions of the transferee and transferor companies were detailed in the petition, including audited accounts for the financial year ending 31-3-2002 and provisional accounts for the period 1-4-2002 to 31-1-2003. The latest Auditor's Reports were annexed to the petition, confirming compliance with statutory requirements.

5. Sanction of the Proposed Scheme and Dissolution of Transferor Companies:
The court found no objections to the proposed scheme and noted compliance with all legal requirements. The scheme of amalgamation was sanctioned, and it was ordered that the transferor companies would stand dissolved without winding up upon filing a certified copy of the order with the Registrar of Companies, Kanpur. The court directed that the order be prepared in the prescribed form within two weeks and filed with the Registrar within thirty days.

Conclusion:
The company petition was disposed of with the court sanctioning the proposed scheme of amalgamation, leading to the dissolution of the transferor companies without winding up, after ensuring compliance with all statutory requirements and receiving necessary approvals from shareholders and regulatory authorities.

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