2003 (9) TMI 569 - HC - Companies Law

Summary

Issues:
Approval of Scheme of Amalgamation and reduction of Paid-up Share Capital.

Analysis:
The judgment pertains to a Company Petition seeking approval for the Scheme of Amalgamation of a Transferor Company with a Transferee Company, along with a reduction of Paid-up Share Capital. The petitioner's counsel presented the details of the scheme, emphasizing the transfer of Undertakings from the Transferor Company to the Transferee Company as per the terms outlined in the scheme. The court examined the petition and its annexures thoroughly.

In a previous order, the court had waived the necessity of convening meetings for Preference Shareholders, Equity Shareholders, and creditors of the petitioner Company, as their rights and interests were not impacted by the scheme. The court also exempted the need for a separate procedure for reducing the Paid-up Share Capital, considering it an integral part of the scheme.

Following the admission of the petition, notices were issued to the Central Government through the Regional Director, and publication in newspapers was directed. An affidavit confirming the publication of notices and service on the Regional Director was submitted. The Regional Director, in correspondence, expressed no objections to the amalgamation, leaving the decision to the court.

Upon review, the court found no grounds to reject the approval of the scheme. It determined that the provisions of the Companies Act, 1956 were satisfied, and the scheme was genuine, bona fide, and in the interest of the shareholders and creditors of the petitioner Company. Consequently, the court approved the arrangement embodied in the Scheme of Amalgamation, including the reduction of Paid-up Share Capital. The relief sought in the petition was granted.

Additionally, the fees of the Addl. Central Government Standing Counsel were quantified and ordered to be paid by the petitioner Company. The judgment highlighted the compliance with legal provisions, the fairness of the scheme, and the overall benefit to the stakeholders, leading to the approval of the scheme and related actions by the court.