2010 (8) TMI 164 - HC - Companies Law

Scheme of amalgamation - Held that - A perusal of the scheme shows that it contains no objectionable feature detrimental to the interest of the employees of the transferor company or of the transferee company. The said scheme is not violative of any statutory provisions. The scheme is fair, just, sound and is not against any public policy or public interest. No proceedings are pending under sections 231 to 237 of the Companies Act, 1956. All the statutory provisions are complied with. There shall be an order approving the scheme of amalgamation of the transferor company, Laurel Aromatics (P.) Ltd., with the transferee company, Contract Point Impex (India) (P.) Ltd., as provided in annexures 5 and 4 in the respective company petitions, with effect from April 1, 2009, as the procedure laid down under sections 391 and 394 of the Companies Act, 1956, is duly complied with. These petitions are allowed. Taking note of the report by the chartered accountant as enclosed by the official liquidator, in terms of the order passed by this court, the transferor company shall stand dissolved without winding up.

Summary

Issues Involved:
1. Sanctioning the scheme of amalgamation under sections 391 to 394 of the Companies Act, 1956.
2. Objection regarding the absence of an amalgamation clause in the memorandum of association of the transferee company.
3. Objection by the Regional Director concerning the increase in share capital and the filing of Form No. V.

Detailed Analysis:

1. Sanctioning the Scheme of Amalgamation:
The petitions were filed under sections 391 to 394 of the Companies Act, 1956, to sanction the scheme of amalgamation of the transferor company, M/s. Laurel Aromatics P. Ltd., with the transferee company, M/s. Contract Point Impex (India) P. Ltd., effective from April 1, 2009. The board of directors of both companies approved the scheme in their respective meetings held on February 12, 2010. The court dispensed with the convening and holding of meetings of the equity shareholders for both companies based on individual consent affidavits.

2. Objection Regarding the Absence of an Amalgamation Clause:
The official liquidator raised an objection stating that the memorandum of association of the transferee company did not include a specific clause on amalgamation. The court referenced various judgments, including those from the Calcutta High Court and the Bombay High Court, which held that the statutory powers under sections 391 to 396 of the Companies Act, 1956, are sufficient for approval of such schemes. The court concluded that the absence of an enabling provision in the memorandum of association does not impede the approval of the scheme, provided it is not detrimental to the interests of the involved companies.

3. Objection by the Regional Director:
The Regional Director raised two objections:
- The transferee company lacked the power to amalgamate with other companies. This objection was overruled based on the aforementioned legal precedents.
- The transferee company needed to file Form No. V along with the registration fees for the increase in share capital. The court referred to its previous decision in Cavin Plastics and Chemicals (P.) Ltd., In re, which established that no such payment is required in the case of a merger.

Conclusion:
The court found that the scheme of amalgamation contained no objectionable features detrimental to the interests of the employees of either company and was not violative of any statutory provisions. The scheme was deemed fair, just, sound, and not against public policy or public interest. Consequently, the court approved the scheme of amalgamation with effect from April 1, 2009, and ordered the dissolution of the transferor company without winding up. The learned Additional Central Government Standing Counsel was awarded a fee of Rs. 2,500 from the transferee company.