2013 (2) TMI 822 - HC - Companies Law

Summary

Issues involved: Application u/s 391 and 394 of the Companies Act, 1956 for Scheme of Amalgamation of two companies.

Details of the judgment:

1. The application was made for the Scheme of Amalgamation of a Transferor company with a Transferee company. Both companies' registered offices are in Delhi.

2. Details of incorporation dates, capital, and financial accounts were provided in the application.

3. Boards of Directors of both companies approved the proposed Scheme, with resolutions enclosed.

4. Status of equity shareholders and creditors of Transferor company, along with consents obtained, were detailed in the application.

5. Prayer was made for dispensation of meetings of shareholders and creditors of Transferor company.

6. Since Transferor company is wholly owned by Transferee company, and consents were obtained, meetings of Transferor company's shareholders were dispensed with.

7. Net worth of both companies was positive, ensuring no adverse impact on creditors post-merger, justifying dispensation of meetings of creditors.

8. The Scheme involved amalgamation of a subsidiary with its holding company, without issuance of new shares, resulting in an unaltered capital structure.

9. All assets and liabilities of the subsidiary were to be transferred to the holding company, whose net worth was positive.

10. Precedents were cited where courts dispensed with the requirement of seeking sanction under Sections 391 to 394 of the Act in similar amalgamation cases.

11. The application was allowed as per the terms presented, with orders for further action.