2009 (1) TMI 911 - HC - Companies Law

Summary

Issues Involved:
1. Compliance with RBI Act for the amalgamation involving a foreign company.
2. Submission of latest financial statements by the petitioner company.
3. Jurisdiction and applicability of the Companies Act, 1956 for amalgamation involving a foreign company.

Summary:

Issue 1: Compliance with RBI Act for the amalgamation involving a foreign company

The petitioner, Essar Shipping and Ports Logistics Limited, sought the High Court's sanction for a Scheme of Amalgamation with India Shipping (Mauritius) and Essar Sisco Shipping Management Company Limited. The Central Government raised concerns about compliance with the RBI Act due to the foreign registration of India Shipping. The petitioner confirmed compliance with the RBI Act for issuing shares to shareholders of the Mauritius-based company. The Court found no violation of Mauritius law, as confirmed by a legal opinion and relevant provisions of the Mauritius Companies Act, 2001.

Issue 2: Submission of latest financial statements by the petitioner company

The Central Government requested the latest financial statements of the petitioner company. The petitioner submitted the latest published results as of 30.09.2008, satisfying the Court's requirement.

Issue 3: Jurisdiction and applicability of the Companies Act, 1956 for amalgamation involving a foreign company

The Central Government argued that India Shipping, being a Mauritius-incorporated company, could not be wound up under the Companies Act, 1956, and thus could not be amalgamated under Sections 391 to 394. The petitioner countered that Section 394(4)(b) includes any body corporate, whether a company within the meaning of the Act or not. The Court referenced decisions from the Andhra Pradesh High Court and Bombay High Court, which supported the amalgamation of foreign companies with Indian companies under Section 394. The Court concluded that the amalgamation was permissible and in the interest of shareholders and creditors, granting the sanction.

Conclusion:

The High Court sanctioned the Scheme of Amalgamation, finding it compliant with relevant laws and beneficial for stakeholders. The petition was disposed of with directions for the petitioner to pay fees to the Central Government Counsel.