2010 (12) TMI 1071 - HC - Companies Law

Amalgamation - Transferor-companies and transferee-company sought for sanction of scheme of their amalgamation

Summary

Issues:
1. Second motion petition under sections 391-394 of the Companies Act, 1956 for scheme of amalgamation.
2. Dispensing with meeting of shareholders, creditors, and preference shareholders.
3. Official Liquidator's report and absence of objections.
4. Regional Director's objection regarding amendment in Memorandum of Association.
5. Legal precedent and decision regarding objection overruled.
6. Approval and sanction of the scheme of amalgamation.

Analysis:
1. The judgment pertains to a second motion petition under sections 391-394 of the Companies Act, 1956, filed by three companies for a scheme of amalgamation. The petitioners, two transferor-companies and one transferee-company, sought approval for the proposed scheme enclosed with the petition.

2. The court had previously dispensed with the requirement of conducting meetings of shareholders, unsecured creditors, and preference shareholders of the involved companies. It was noted that there had been no significant changes in the creditors and shareholding patterns of the companies, which were all group entities.

3. The Official Liquidator reported no complaints against the proposed scheme and affirmed that the affairs of the transferor-companies had not been conducted prejudicially. Additionally, no objections were received by the petitioners regarding the scheme.

4. The Regional Director raised an objection concerning an amendment in the Memorandum of Association of the transferee-company as outlined in the scheme. The objection was based on the prescribed procedures under the Act for such amendments.

5. The court referred to a previous decision and legal precedent to address the Regional Director's objection. It cited a case where it was held that section 391 of the Act provides a streamlined process for such corporate actions to avoid unnecessary procedures. The court overruled the objection, stating that the proposed amendment was in line with the nature of the scheme and had already been approved by the shareholders.

6. Ultimately, the court allowed the petition, approving and sanctioning the scheme of amalgamation while clarifying that the order did not grant any exemption from stamp duty payment, if applicable. The judgment concluded the matter, disposing of the petition.