2009 (3) TMI 566 - HC - Companies Law

Amalgamation - Held that - The Official Liquidator in its report has stated that he has not received any complaint against the Scheme of Amalgamation from any person/parties interested in the scheme in any manner whatsoever, and on the basis of information submitted by the petitioner companies. Thus it was inferred that the affairs of the petitioner companies do not appear to have been conducted in a manner prejudicial to the interest of the members, creditors, or public and in accordance with the provisions of section 394(1) of the Companies Act, 1956. The Regional Director (NR) has not filed any response but has submitted at the hearing that the petitioners should undertake to comply with Accounting Standard-14. The petitioners have undertaken to comply with the said accounting standards.There is no other legal impediment to the sanction of the Scheme of Amalgamation which is annexed to the petition. Consequently, sanction is hereby granted to the Scheme of Amalgamation under sections 391 and 394 of the Companies Act, 1956.

Issues Involved:
Petitions under sections 391 and 394 of the Companies Act, 1956 seeking sanction of the Scheme of Amalgamation of two companies.

Analysis:

1. Preparation of Judgment:
The judgment discusses the need for further directions due to discrepancies in the reports of the Chairpersons appointed to conduct meetings of secured and unsecured creditors of the transferor and transferee companies. The matter was listed for directions, and after hearings, the judgment was reserved again.

2. Background of Companies:
Details about the transferor and transferee companies, including their incorporation dates, registered offices, authorized share capital, and equity share capital, are provided.

3. Petitions for Amalgamation:
The petitions sought orders under sections 391 and 394 of the Companies Act, 1956 to convene meetings of secured and unsecured creditors for the proposed Scheme of Amalgamation between the two companies. Dispensation of shareholder meetings was allowed based on filed consents.

4. Meetings of Creditors - Transferor Company:
Reports by Chairpersons of meetings of secured and unsecured creditors of the transferor company are discussed, including attendance, approval of the Scheme, and the presence of the required quorum.

5. Meetings of Creditors - Transferee Company:
Similar details are provided for the meetings of secured and unsecured creditors of the transferee company, including attendance, approval of the Scheme, and the presence of the required quorum.

6. Publication of Citations and Responses:
Citations were published in newspapers as per rules, and affidavits confirmed the same. No objections were received from the public. Reports from the Official Liquidator and the Regional Director were also considered.

7. Official Liquidator's Report:
The Official Liquidator reported no complaints against the Scheme of Amalgamation and found no prejudicial conduct in the affairs of the petitioner companies.

8. Compliance with Accounting Standards:
The Regional Director suggested compliance with Accounting Standard-14, which the petitioners agreed to follow.

9. Sanction of the Scheme:
No legal impediments were found, and the court granted sanction to the Scheme of Amalgamation under sections 391 and 394 of the Companies Act, 1956. Compliance with statutory requirements, including Accounting Standard-14, was mandated.

10. Dissolution of Transferor Company:
Upon the Scheme becoming effective, the transferor company would stand dissolved without being wound up. Expenses for the Official Liquidator were specified to be paid within a stipulated time.

11. Conclusion:
The petition was disposed of as per the order, clarifying that it did not exempt from any applicable payments. Certified copies of the order were to be filed with the Registrar of Companies, and the Official Liquidator's expenses were to be deposited in the Common Pool Fund.

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