2009 (4) TMI 453 - HC - Companies Law

Amalgamation - Held that - As the learned counsel for the Official Liquidator and the Registrar of Companies submit that they have no objection for grant of the Scheme of Amalgamation at Annexure-A. It is stated that the scheme will be beneficial to the transferor company and its creditors and also the respective members of the transferee company and will result in better and more efficient operation of the transferee company, post amalgamation, the Scheme of Amalgamation at Annexure-A is hereby sanctioned.

Summary

Issues:
1. Sanction of the Scheme of Amalgamation involving two companies.
2. Approval of the Scheme by shareholders and creditors.
3. Appointment of a Chartered Accountant to verify the books and records.
4. Objection raised by the Regional Director regarding the exchange ratio of shares.
5. Final decision and orders issued by the Court.

Analysis:

1. The High Court of Karnataka considered petitions from two companies, the transferor company and the transferee company, seeking sanction for the Scheme of Amalgamation to merge the transferor company with the transferee company. Both companies were incorporated under the Companies Act, 1956, and the Board of Directors of both companies had approved the amalgamation scheme.

2. The transferee company filed an application for dispensation of the shareholders' meeting and received approval from the Court to convene meetings of secured and unsecured creditors, which unanimously approved the scheme. Similarly, the transferor company also obtained dispensation for the shareholders' and creditors' meetings.

3. The Official Liquidator filed a petition for the appointment of a Chartered Accountant to verify the transferor company's books and records. The appointed Chartered Accountant submitted a report stating that the affairs of the transferor company were not prejudicial to its members or the public.

4. The Regional Director raised an objection regarding the exchange ratio of shares proposed in the scheme. However, the Court cited a Supreme Court judgment to dismiss this objection, stating that the exchange ratio was acceptable.

5. After considering submissions from the Official Liquidator and the Registrar of Companies, who had no objections to the scheme, the Court sanctioned the Scheme of Amalgamation. The transferor company was dissolved without winding up, and specific orders were issued for compliance by both companies within a specified timeline, including filing a copy of the order with the Registrar of Companies.

This detailed analysis outlines the key aspects of the judgment, including the approval process, objections raised, verification of records, and the final decision of the Court sanctioning the Scheme of Amalgamation between the two companies involved.