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2008 (5) TMI 428 - HC - Companies LawAmalgamation - Held that - Having gone through the petition and the annexures attached therewith and having considered the above referred authorities, the Court is satisfied that since all these changes are proposed to be effected as an integral part of the Scheme, the approval granted by the shareholders at the meeting to the Scheme as a whole amounts to approval to all such incidental proposals and no separate procedure is required to be followed as envisaged by sections 17, 31, 94, 97, 81(1A), 100 and 149(2A) respectively. It goes without saying that when this Court sanctions the Scheme, the Scheme is sanctioned as a whole with all its clauses and proposals. The certified copy of the order sanctioning the Scheme by this court, when filed with the Registrar of Companies, shall be treated as intimation to the Registrar of Companies and it shall take note of all the changes proposed and sanctioned by the Court. In view of the same, no separate compliances of aforesaid provisions of the Companies Act, 1956 are, therefore, necessary. The Court is further satisfied that the amalgamation would be in the interest of the Companies and their Members and Creditors and, hence, prayer in terms of para 24(a) is hereby granted. The petition is disposal of accordingly. So far as the cost to be paid to the learned Assistant Solicitor General of India is concerned, the same is quantified ₹ 3,500. The same may be paid directly to the learned advocate Shri Harin P. Raval.
Issues Involved:
1. Sanctioning the Scheme of Arrangement in the nature of amalgamation under sections 391 to 394 of the Companies Act, 1956. 2. Submission of the latest financial statements. 3. Compliance with provisions of sections 94/97, 17, and 21 of the Companies Act, 1956. 4. Application of the principle of Single Window Clearance. 5. Objections raised by the Central Government and the responses to them. Issue-wise Detailed Analysis: 1. Sanctioning the Scheme of Arrangement in the Nature of Amalgamation: The petitioner-company, Mekaster Valves & Engineering Services Private Limited, filed a petition under sections 391 to 394 of the Companies Act, 1956, seeking sanction for the Scheme of Arrangement in the nature of amalgamation with Mekaster Engineering & Equipments Private Limited. The rationale for the amalgamation included achieving synergic advantages, better synchronization in operations, resource utilization, reduction in costs, and an overall improvement in profits and turnover. The Board of Directors of both companies resolved to proceed with the amalgamation, subject to necessary approvals and sanctions. The Scheme of Amalgamation was unanimously approved by the Equity Shareholders of the petitioner company. 2. Submission of the Latest Financial Statements: The Central Government, through the Deputy Registrar of Companies, requested the petitioner companies to submit their latest financial statements before the Court. In response, the petitioner company submitted the provisional balance sheet as of 29-2-2008 as Annexure 1 to the additional affidavit. 3. Compliance with Provisions of Sections 94/97, 17, and 21 of the Companies Act, 1956: The Central Government raised concerns regarding compliance with sections 94/97 (change in Capital Clause), 17 (change in Objects Clause), and 21 (change in Name Clause) of the Companies Act, 1956. The petitioner company argued that the principle of Single Window Clearance should apply, which would negate the need for separate compliance procedures. The Court agreed, stating that when the Scheme envisages various incidental proposals as an integral part, the procedures prescribed under the Companies Act need not be separately undertaken. The approval of the Scheme by shareholders was deemed sufficient for compliance with the relevant sections. 4. Application of the Principle of Single Window Clearance: The petitioner company cited several judgments supporting the principle of Single Window Clearance, where the Court can sanction a Scheme containing all necessary alterations without requiring separate procedures. The Court referenced cases such as Vasant Investment Corpn. Ltd., PMP Auto Industries Ltd., ICICI Bank Ltd., and others, affirming that section 391 of the Companies Act is a complete Code and intended to function as a single window clearance system. This principle ensures that parties are not subjected to repeated applications for various alterations needed to implement the sanctioned Scheme. 5. Objections Raised by the Central Government and Responses: The Central Government, through Mr. Harin P. Raval, argued against the application of Single Window Clearance, citing the need for compliance with statutory provisions. However, the petitioner company, represented by Mrs. Swati Soparkar, countered with legal precedents supporting their case. The Court reviewed the objections and the supporting judgments, concluding that the principle of Single Window Clearance was well-established and applicable. The Court also noted that the certified copy of the order sanctioning the Scheme would serve as intimation to the Registrar of Companies, thereby fulfilling all necessary compliance requirements. Conclusion: The Court, after considering the petition, annexures, and relevant legal authorities, was satisfied that the amalgamation was in the interest of the companies, their members, and creditors. The Court granted the prayer in terms of para 24(a), sanctioning the Scheme as a whole with all its clauses and proposals. The petition was disposed of accordingly, and the cost to be paid to the learned Assistant Solicitor General of India was quantified at Rs. 3,500. Order Accordingly.
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