2011 (3) TMI 1469 - HC - Companies Law

Amalgamation - transferee company, seeking an order for amalgamation and a declaration to effect that it was binding on both transferee-company and transferor company and also on their respective shareholders and creditors - Reply affidavit was filed by Regional Director, Ministry of Corporate Affairs, pursuant to section 394A - Official Liquidator also submitted his reply affidavit wherein it was stated that transferee company would continue to exist and there would be no dissolution of company consequent to sanction of scheme Held that - In such circumstances, it was only transferor company which was being dissolved and amalgamated with petitioner. petition seeking sanction of scheme of amalgamation was to be allowed with a direction to petitioner that it would comply with all statutory requirements in accordance with law

Summary

Issues:
- Second motion petition under sections 391 to 394 of the Companies Act, 1956
- Sanction of the Scheme of Amalgamation
- Declaration of binding effect on shareholders and creditors

Analysis:

Second Motion Petition:
The judgment pertains to a second motion petition under sections 391 to 394 of the Companies Act, 1956. The petitioner company sought permission for exemption from holding meetings of secured and unsecured creditors and shareholders. The court considered the scheme of amalgamation, resolutions passed by the companies, and approvals granted by the Delhi High Court. Based on the affidavits filed and the Delhi High Court's order, the court granted permission for exemption and disposed of the petition, allowing the petitioner to approach the court again for further approval if needed.

Sanction of the Scheme of Amalgamation:
The petitioner also presented an order from the Delhi High Court in a related case, where objections raised by the Regional Director were deemed untenable. The Delhi High Court sanctioned the Scheme of Arrangement under sections 391 to 394 of the Companies Act, 1956, directing compliance with statutory requirements. In the present petition, the petitioner requested an order under section 394 of the Act to sanction the Scheme of Amalgamation, declaring its binding effect on the involved companies, shareholders, and creditors. The court reviewed the scheme, the affidavit filed by the Regional Director, and the Delhi High Court's judgment, ultimately granting sanction to the Scheme of Amalgamation and clarifying that the order does not exempt from stamp duty or tax obligations.

Declaration of Binding Effect:
Regarding the declaration of the binding effect of the Scheme of Amalgamation, the court acknowledged the reply affidavit filed by the Regional Director and the Official Liquidator's submission. It was clarified that only the Transferor Company would be dissolved and amalgamated, while the Transferee Company would continue to exist. The court granted sanction to the Scheme of Amalgamation under sections 391 to 394 of the Act, emphasizing compliance with statutory requirements and orders issued by relevant courts. The order explicitly stated that it does not exempt from stamp duty or tax obligations, ensuring clarity on this aspect.

In conclusion, the judgment addressed the second motion petition, sanctioned the Scheme of Amalgamation, and declared its binding effect on the involved parties, providing a comprehensive legal analysis and directives in accordance with the Companies Act, 1956 and relevant court orders.