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Issues Involved:
1. Whether the transferor company can amalgamate with a body corporate. 2. Whether a separate application for sanction of the scheme needs to be filed by the body corporate. Summary: Issue 1: Amalgamation with a Body Corporate The petitioner, M/s. Andhra Bank Housing Finance Limited, filed an application u/s 391 and 394 of the Companies Act, 1956, seeking sanction for its amalgamation with Andhra Bank, a body corporate. The court noted that the transferor company is a 100% subsidiary of Andhra Bank. The court examined section 394 of the Act, which allows the transferor company to include a body corporate, while the transferee company must be a company within the meaning of the Act. The court harmonized section 394 with section 4 of the Act, concluding that the transferee company, although a body corporate, is considered a company for the purpose of the Act. Thus, the amalgamation of the transferor company with a body corporate is permissible. Issue 2: Separate Application by the Body Corporate The court addressed whether a separate application for sanction of the scheme needs to be filed by the body corporate. It referred to various judgments, including those of the Bombay High Court and Delhi High Court, which held that if the scheme does not affect the rights of the members or creditors of the transferee company, a separate application by the transferee company is not necessary. The court found that the proposed scheme of amalgamation was not prejudicial to the members or creditors of either the subsidiary or the holding company and did not involve a reorganization of the share capital of the transferee company. Therefore, there was no need for a separate application by Andhra Bank. Conclusion: The court sanctioned the scheme of amalgamation between the subsidiary company and the holding company, noting no legal impediment. The certified copy of the order was to be filed with the Registrar of Companies within 30 days.
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