2008 (9) TMI 565 - HC - Companies Law

Amalgamation - Held that - Examineing the scheme of amalgamation it is found nothing prejudicial to the interest of the Transferor Company and Transferee Company. The Regional Director has also no objection if the transferor company is amalgamated with the transferee company. These company petitions are accordingly allowed. The scheme of amalgamation filed with the company petitions is approved as per the prayer clauses. The Official Liquidator shall be entitled to ₹ 2,500 each from the Transferee Company and the Transferor Company.

Summary

Issues:
1. Approval of amalgamation under sections 391 to 394 of the Companies Act.
2. Compliance with Accounting Standard 14 for amalgamation.
3. Official Liquidator's report on the affairs of the Transferor Company.
4. Dissolution of the Transferor Company under section 394(1)(iv) of the Companies Act.

Analysis:

1. The petition involved Company Petition No. 5 of 2008 and Company Petition No. 6 of 2008 under sections 391 to 394 of the Companies Act for the amalgamation of the Transferor Company with the Transferee Company. Both companies had approved the scheme of amalgamation in their respective board meetings.

2. The Regional Director highlighted the need for compliance with Accounting Standard 14, requiring an undertaking from the petitioner company to follow the accounting treatment prescribed for amalgamations. The Regional Director also emphasized that all employees of the Transferor Company would seamlessly transition to the Transferee Company without service interruptions.

3. The Official Liquidator's report confirmed that the affairs of the Transferor Company had been managed without prejudice to the interests of its members and creditors. The report stated no objections to the dissolution of the Transferor Company post the amalgamation, as per section 394(1)(iv) of the Companies Act.

4. After reviewing the material on record and considering the submissions, the judge found no prejudicial aspects in the scheme of amalgamation. The judge concurred with the Official Liquidator's assessment that the interests of both companies were safeguarded. Consequently, the court approved the scheme of amalgamation as per the prayer clauses in the petitions.

5. The court allowed the company petitions, granting approval for the amalgamation and directing the Official Liquidator to receive a specified amount from both the Transferee and Transferor Companies. The dissolution of the Transferor Company was permitted in accordance with the provisions of the Companies Act.