2005 (3) TMI 475 - HC - Companies Law

Summary

Issues Involved:
1. Scheme of Amalgamation under sections 391 and 394 of the Companies Act, 1956.
2. Sanction of the Scheme by the Court.
3. Compliance with statutory requirements and directions.
4. Financial and legal status of the involved companies.
5. Approval from shareholders and creditors.
6. Reports from the Official Liquidator and Regional Director.
7. Extension of the period for sanctioning the Scheme.

Issue-wise Detailed Analysis:

1. Scheme of Amalgamation under sections 391 and 394 of the Companies Act, 1956:
The petition was filed by five companies seeking the Court's sanction for a Scheme of Amalgamation. The Transferor Companies were Rohit Soaps & Detergents Private Limited, Rahul Detergents Private Limited, Singh Detergents Private Limited, and Kanpur Detergents and Chemicals Private Limited. The Transferee Company was Shri Mahadeo Soap Industries Private Limited. The Scheme proposed the transfer of all properties, rights, claims, and liabilities of the Transferor Companies to the Transferee Company.

2. Sanction of the Scheme by the Court:
The petitioners requested the Court to sanction the Scheme of Amalgamation to be binding from April 1, 2003, or another date as fixed by the Court. The Court was satisfied with the disclosures made by the petitioners and found no objections filed against the Scheme. The Court sanctioned the Scheme under sections 391 and 394 of the Companies Act, 1956.

3. Compliance with statutory requirements and directions:
The petitioners complied with the statutory requirements, including the preparation and auditing of financial accounts, maintaining proper books of account, and holding meetings of unsecured creditors as directed by the Court. The meetings were held on March 20, 2004, and the resolutions approving the Scheme were unanimously passed.

4. Financial and legal status of the involved companies:
The financial positions of the Transferor Companies and the Transferee Company as of March 31, 2003, were disclosed. The Court noted that there were no substantial changes in their financial positions since then, except those arising from the usual course of business. The petitioners also confirmed that no proceedings under sections 235 to 251 or sections 397 and 398 of the Companies Act, 1956, were pending against them.

5. Approval from shareholders and creditors:
The Court dispensed with the requirement of holding meetings of equity shareholders and secured creditors, as they had already approved the Scheme. The meetings of unsecured creditors were held as per the Court's directions, and the resolutions approving the Scheme were passed unanimously.

6. Reports from the Official Liquidator and Regional Director:
The Official Liquidator's report stated that the affairs of the Transferor Companies were not conducted in a manner prejudicial to the interest of members or the public. The Regional Director's affidavit confirmed that all employees of the Transferor Companies would become employees of the Transferee Company without interruption in service. The Regional Director also noted the extension of the period for sanctioning the Scheme until March 31, 2005.

7. Extension of the period for sanctioning the Scheme:
The Scheme initially provided for a revocation date of June 30, 2004, if not sanctioned by then. However, the Board of Directors of the Transferor and Transferee Companies extended this period to March 31, 2005. The Court accepted this extension, noting that the Board of Directors had the power to extend the period as per the Scheme's provisions.

Conclusion:
The Court sanctioned the Scheme of Amalgamation, directing that all properties, rights, interests, and liabilities of the Transferor Companies be transferred to the Transferee Company. The Transferor Companies were dissolved without winding up. The petitioners were directed to file a certified copy of the order with the Registrar of Companies within 30 days. The Company Petition was disposed of accordingly.