2015 (3) TMI 1294 - HC - Companies Law

Scheme of Amalgamation Holding Transferee Company requirement to take out separate proceedings for obtaining the sanction to the proposed Scheme of Amalgamation of its wholly owned subsidiary companies with itself? - Held that - No separate proceedings is required to be undertaken by Transferee Company being the Holding Company under the provisions of Sec. 391(2) of the Companies Act, 1956.

Summary

Issues:
Interpretation of Section 391(2) of the Companies Act, 1956 regarding the requirement of separate proceedings by a Transferee Company in a proposed Scheme of Amalgamation.

Analysis:
The judgment pertains to a Judges Summons taken out by Fuse+Media Pvt. Ltd., the Transferee Company, seeking a ruling that it, as the Parent Holding Company, does not need to undertake separate proceedings under Section 391(2) of the Companies Act, 1956 in the proposed Scheme of Amalgamation involving Fuse Interactive Pvt. Ltd. and Anya Jyothirmayi Health Resort Pvt. Ltd., its wholly owned subsidiary companies. The applicant argued that since it holds the entire share capital of the Transferor Companies and the shares held by the Transferee Company will be cancelled upon sanction of the scheme without issuing new shares, its capital structure will remain unchanged, and the rights of existing shareholders will not be affected. The applicant relied on a previous order of the Court in support of its position.

Upon considering the submissions and the Scheme of Amalgamation, the Court, represented by Mr. S.R.Brahmbhatt J., held that the Transferee Company, being the Holding Company, is not required to initiate separate proceedings under Section 391(2) of the Companies Act, 1956. The Court referenced a previous decision and concluded that in the present case, no additional proceedings are necessary for the Transferee Company. As a result, the Judges Summons was disposed of accordingly, affirming that the Transferee Company does not need to undertake separate proceedings for the proposed Amalgamation of its wholly owned subsidiary companies.