2011 (4) TMI 1201 - HC - Companies Law

Scheme of amalgamation - issue of filing fee already paid by the transferor companies on their authorized share capital - Objections by the Regional Director Ministry of Corporate Affairs Chennai - issue of filing fee already paid by the transferor companies on their authorized share capital - held that - this objection cannot be sustained in view of the law laid down by the Hon ble division bench of this court in the case of Regional Director Ministry of Co. Affairs v. Cavin Plastics and Chemicals (P.) Ltd. (2007 (11) TMI 412 (HC)) As per the report of the chartered accountants that they have not come across any act of misfeasance by the directors which would attract the provision of sections 542/543 of the Companies Act 1956. Nor the affairs of the transferor company have been conducted in a manner prejudicial to the interest of its members or public interest. There is no objection by the official liquidator to the scheme and the scheme be beneficial to the company and its members. Consequently the company petition is conditionally ordered subject to sanctioning of the scheme of amalgamation by the Hon ble Calcutta High Court on the petition filed or to be filed by the transferee company.

Issues:
1. Scheme of amalgamation under sections 391 to 394 of the Companies Act, 1956.
2. Approval of the scheme by the shareholders.
3. Delisting of shares from stock exchanges.
4. Objection by Regional Director regarding the authorized share capital.
5. Official liquidator's report and absence of misfeasance.
6. Conditional order subject to sanction by Calcutta High Court.
7. Fixing remuneration for the Additional Central Government standing counsel.

Analysis:

1. The judgment pertains to a company petition filed under sections 391 to 394 of the Companies Act, 1956, seeking approval for a scheme of amalgamation between the petitioner company and a transferee company. The petitioner, a transferor company, aims to merge with the transferee company for operational efficiency and financial benefits.

2. The scheme of amalgamation was approved by the shareholders in a meeting where the resolution was passed unanimously. The shareholders were to be allotted equity shares of the transferee company on a proportionate basis for every 50 equity shares held in the transferor company.

3. The petitioner also applied for delisting its shares from certain stock exchanges. While the Bombay Stock Exchange had already suspended the shares, approval was pending from the Madras Stock Exchange. The transferee company's shares were listed with the Calcutta Stock Exchange, which had issued no objection to the proposed scheme.

4. An objection raised by the Regional Director regarding the authorized share capital was addressed in light of a previous legal precedent. The objection was deemed unsustainable as per the law laid down by the High Court in a previous case.

5. The official liquidator's report confirmed the absence of misfeasance by the directors and stated that the scheme would be beneficial to the company and its members. There were no objections raised by the official liquidator regarding the scheme.

6. The judgment concluded with a conditional order, subject to the scheme's sanction by the Calcutta High Court through a petition filed by the transferee company. Additionally, the remuneration for the Additional Central Government standing counsel was fixed at Rs. 5,000 to be paid by the petitioner company.

This comprehensive analysis covers the key issues addressed in the legal judgment, detailing the process and considerations involved in the scheme of amalgamation and its approval.

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