2011 (3) TMI 1599 - HC - Companies Law

Summary

Issues Involved:
Petition for sanction of a Scheme of Arrangement in the nature of Amalgamation u/s 391 read with Section 394 of the Companies Act, 1956.

Judgment Details:

1. Compliance with Meeting Requirements:
The separate proceedings for the transferee company were dispensed with, and the petition was filed only for the transferor company. Meetings of equity shareholders, secured creditor, and unsecured creditors were dispensed with based on written consent letters. The petition was admitted, and public notices were advertised in newspapers. No objections were raised post-publication.

2. Observations by Regional Director:
An affidavit by the Regional Director highlighted concerns regarding compliance with Accounting Standard 14 by the Transferee Company and the main objects clause not including activities of the transferor company. The petitioner clarified these issues in an additional affidavit, ensuring compliance with Accounting Standard-14 and stating that the main objects of the transferee company are broad enough to encompass the transferor company's activities.

3. Official Liquidator's Report:
The Official Liquidator's report stated that the transferor company's affairs were not conducted prejudicially. The petitioner company was directed to preserve books, papers, and records for 8 years post the scheme's sanctioning, with no disposal without prior permission under Section 396 of the Companies Act, 1956.

4. Court Decision:
After hearing submissions from both parties, the court was satisfied that the scheme of arrangement would benefit the companies and their members. The prayers in the petition were granted, and costs were quantified at Rs. 5,000/- per petition for the Central Government Standing Counsel and Rs. 4,000/- per petition for the transferor company to be paid to the Official Liquidator.

Conclusion:
The petition for the Scheme of Arrangement in the form of Amalgamation was disposed of, with costs allocated as specified.