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Issues involved: Interpretation of Section 391(2) of the Companies Act, 1956 regarding the necessity of separate proceedings for amalgamation of wholly owned subsidiaries by the holding company.
Summary: The judgment by the Gujarat High Court in the case involved an application by Azure Knowledge Corporation Pvt. Ltd., the transferee company, seeking a ruling that separate proceedings under Section 391(2) of the Companies Act, 1956 were not required for the proposed amalgamation of its wholly owned subsidiaries, Successcraft Solutions Pvt. Ltd. and While Calls Services Pvt. Ltd. The applicant argued that since the capital structure of the transferee company would not change post-amalgamation and the rights of existing shareholders and creditors would remain unaffected, separate proceedings were unnecessary. The applicant cited previous court orders and decisions to support their argument, emphasizing that holding companies need not undertake separate proceedings for amalgamation of wholly owned subsidiaries. After considering the submissions and relevant legal precedents, the High Court, in line with previous judgments, held that separate proceedings were indeed not required for the transferee company in this case. The application was allowed accordingly, with no costs imposed.
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