2012 (11) TMI 79 - HC - Companies Law

Scheme of Amalgamation - claim made by the unsecured creditor for outstanding dues - Held that - There is no dispute that the Transferee Company will remain in existence even after the post sanctioned scheme. There is no substance in the apprehension so raised. The Transferee Company permitted the concerned Authorities to take appropriate action or steps, if any. The pendency of such investigation in no way should be the reason not to sanction the scheme. The Official Liquidator has filed his report dated 26th September, 2012, stating that the affairs of the Petitioner Company have been conducted in a proper manner and that the Petitioner Company may be ordered to be dissolved - in spite of being on notice the said unsecured creditor of the Petitioner Company has not appeared before this court neither has filed his objection before this Court. Thus the objection is without merit and is rejected. The rights of the unsecured creditor of the Petitioner Company are not affected From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy. None of the parties concerned have come forward to oppose the Scheme in the Court - scheme of Amalgamation s well within the frame work of law and the record and as it is difficult for the Court to deal and decide the business strategies as it is not the court s domain. Petitioner Company to pay costs of Rs. 10,000/- each respectively, to the Regional Director and to the Official Liquidator, High Court Bombay.

Issues:
1. Sanction of the Court sought for Scheme of Amalgamation under Companies Act, 1956.
2. Compliance with statutory requirements and objections raised by unsecured creditor.
3. Report of Official Liquidator and fairness of the Scheme.
4. Expert opinions and legality of the Scheme.
5. Statutory compliances and orders for filing and payment.

Analysis:

1. The judgment pertains to the sanction sought by the Petitioner for the Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956 between two companies. The Court heard the Counsel for the parties and noted the compliance with all requirements as per its directions.

2. The Regional Director's Affidavit stated that, except for a pending investigation, the Scheme is not prejudicial to shareholders and the public. The objection raised by an unsecured creditor regarding outstanding payment was disputed by the Petitioner, emphasizing that the Scheme does not affect the rights of unsecured creditors.

3. The Official Liquidator's report confirmed proper conduct of the Petitioner Company's affairs, recommending its dissolution. The Court rejected the objection of the unsecured creditor, finding it without merit, and observed that the Scheme appeared fair, reasonable, and compliant with the law.

4. The judgment highlighted that experts and professionals supported the scheme, and their unanimous opinion favored its acceptance. It noted the competitive corporate market and the companies' ability to strategize in line with market dynamics, emphasizing the Court's limited role in assessing business strategies.

5. With all statutory compliances fulfilled, the Court made the Company Scheme Petition absolute, directing the filing of the Scheme with the concerned authorities within specified timelines. Additionally, costs were imposed on the Petitioner for the Regional Director and Official Liquidator, with orders for payment and dispensation of the drawn-up order.

This detailed analysis covers the issues of sanctioning the Scheme, compliance with statutory requirements, objections raised by creditors, fairness of the Scheme, expert opinions, and the legal procedures to be followed post the judgment.

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