2008 (4) TMI 513 - HC - Companies Law

Summary

Issues:
Confirmation of scheme of arrangement under section 391/394 of the Companies Act, 1956.

Analysis:
The petition was filed seeking confirmation of a scheme of arrangement under section 391/394 of the Companies Act, 1956 by three companies - the Demerged Company, and two others. The Court had earlier appointed a Chairman for a creditors meeting, where it was unanimously resolved to approve the proposed Scheme of Demerger without modification. Following this, the Court directed publication in two newspapers and served notices to the Official Liquidator and the Regional Director. The Official Liquidator had no objections, but the Regional Director objected to the undisclosed ratio of exchange of shares.

Further Analysis:
The Court directed the petitioner's counsel to disclose the relationship between the Chartered Accountant and the Directors of the Demerged Company. A supplementary affidavit clarified that the Directors had no relationship with the Chartered Accountant. After hearing the petitioner's counsel and reviewing the petition and the Scheme of Arrangement, the Court noted the absence of objections despite advertisements and explanations provided to the authorities. Satisfied that the Scheme was in the interest of shareholders/creditors, the Court approved the Scheme of Arrangement of demerger.

Conclusion:
The Court approved the Scheme of Arrangement of demerger, as filed with the petition, and directed the issuance of a formal order within three weeks. The petition was disposed of, with the petitioners instructed to comply with all statutory requirements within a month.