2002 (12) TMI 503 - HC - Companies Law

Summary

Issues:
Petitions filed under sections 391(2) and 394 of the Companies Act for sanction of the Scheme of Amalgamation of two companies.

Analysis:
1. The Scheme of Amalgamation aimed to merge LG Electronics System India Limited with LG Electronics India (P.) Ltd., both subsidiaries of L.G. Electronics Inc. The petitions detailed the reasons for the merger, which were found acceptable by the Court.

2. Balance Sheets of both companies, along with Board Resolutions, were submitted. No investigations or pending proceedings under relevant sections of the Companies Act were reported.

3. Separate meetings of shareholders and creditors were conducted, where unanimous approval for the amalgamation scheme was obtained. No objections were raised during these meetings.

4. A creditor, Kaveri Telecoms Ltd., objected to the lack of notice in the initial motion stage. However, the Court found that proper notice procedures were followed, and the objection was dismissed.

5. The creditor further argued for detailed creditor information in the petition, citing specific rules. The Court clarified that the appointment of a Chairman for meetings sufficed to safeguard creditor interests.

6. The creditor's objection post-deposit of a significant sum was overruled, as the company was no longer a creditor and had no standing to oppose the scheme.

7. No substantial reasons against the amalgamation were presented, with the Regional Director and Official Liquidator expressing no objections. Tax authority approval was deemed unnecessary, but undertakings were made for compliance if needed.

8. Considering all submissions, lack of opposition, and compliance with legal requirements, the Court granted sanction to the Scheme of Amalgamation under sections 391 to 394 of the Companies Act, leading to the dissolution of the Transferor-Company without winding-up proceedings.