2004 (8) TMI 394 - HC - Companies Law

Summary

Issues: Scheme of Amalgamation approval by High Court of Judicature at Bombay, No objection from Central Government, Approval by equity shareholders, secured creditors, and unsecured creditors, Justification for the Scheme of Arrangement/Amalgamation, Financial viability of the companies post-merger, Absence of investigations or proceedings against the companies, Official Liquidator's no objection, Overall benefit and interest of all stakeholders.

Scheme of Amalgamation Approval:
The High Court of Judicature at Bombay sanctioned the scheme of amalgamation of the transferor company with the petitioner company. The order was passed based on the application by the transferor company. The scheme was unanimously adopted by equity shareholders, secured creditors, and unsecured creditors in separate meetings, as confirmed by the Chairman's report.

No Objection and Approvals:
The Regional Director of the Department of Company Affairs affirmed that the Central Government had no objection to the proposed Scheme of Amalgamation. The respective Board of Directors of both the transferee and transferor companies approved the Scheme of Arrangement/Amalgamation.

Justification and Financial Viability:
The petition detailed the circumstances, reasons, and grounds justifying the Scheme of Arrangement/Amalgamation. It was highlighted that post-merger, the aggregate assets of both companies would be more than sufficient to meet their liabilities. Provisions were made for the payment of all liabilities in due course without adversely affecting any creditors' rights.

Absence of Investigations and Official Liquidator's No Objection:
No investigations or proceedings were pending against either company under relevant sections of the Companies Act, ensuring a clean slate for the merger. The Official Liquidator also had no objection to the sanction of the Scheme.

Overall Benefit and Interest of Stakeholders:
After a thorough review of the petition and supporting documents, the judge was satisfied that the Scheme of Arrangement/Amalgamation would not prejudice anyone and would be beneficial for the transferee and transferor companies, their shareholders, creditors, and all concerned parties. Consequently, the judge sanctioned the Scheme, making it binding on all parties involved from a specified effective date.