2007 (6) TMI 549 - HC - Companies Law

Summary

Issues Involved:
1. Compliance with Sections 94 and 97 of the Companies Act, 1956.
2. Payment of requisite fee/stamp duty on enhanced share capital.
3. Objection by a shareholder regarding information suppression and valuation.

Summary:

1. Compliance with Sections 94 and 97 of the Companies Act, 1956:
The main objection of the Registrar of Companies was that the petitioner must comply with Sections 94 and 97 before approaching the Court for amalgamation. The Court referenced the Andhra Pradesh High Court's decision in Saboo Leasing (P) Limited In Re., which held that the certified copy of the Court's order sanctioning the scheme, filed with the Registrar within 30 days, serves as sufficient notice under Sections 95 and 97. The Court concluded that the provisions of Sections 94 to 97 are complied with in the scheme of amalgamation, and there is no infraction of these provisions.

2. Payment of requisite fee/stamp duty on enhanced share capital:
The second objection raised was regarding the payment of requisite fee/stamp duty on the enhanced share capital. The Court cited various judgments, including Jaypee Cement Limited and Vasant Investment Corporation Limited, which held that upon merger, the combined authorized share capital does not necessitate additional fee/stamp duty payment. The Court concluded that since the requisite fee/stamp duty has already been paid on the authorized share capital of the respective companies, there is no obligation to pay again on the same authorized capital.

3. Objection by a shareholder regarding information suppression and valuation:
A shareholder objected to the scheme, alleging suppression of information and disputing the valuation and exchange ratio of shares. The Court noted that the shareholder did not attend the meeting and was informed to review the documents at the company's registered office, which he failed to do. The Court found no statutory obligation to provide three years of balance sheets and deemed the majority decision of the shareholders as just and fair. The valuation by Deloitte Haskin and Sells was accepted as fair and reasonable by the Board of Directors of both companies, and the Court held that it is not for the Court to substitute its judgment over the commercial wisdom of the shareholders.

Conclusion:
The Court found that all requisite statutory procedures were complied with, and the scheme was approved by the requisite majority. The scheme of amalgamation was sanctioned, binding on the petitioner company, its shareholders, and creditors. The petitioner was directed to file the certified copy of the order with the Registrar of Companies within thirty days. The office was instructed to draw up a decree in Form No. 42, with no costs awarded.