2013 (10) TMI 358 - HC - Companies Law

Sanction of the Scheme of Amalgamation - Held that - No objection has been received to the proposed Scheme from any other party. Mr. Sanjay Bhargava, authorized signatory of the Petitioner companies, has filed an affidavit dated July 19, 2013 confirming that the Petitioner companies have not received any objection pursuant to citations published in the said newspapers - In view of the approval accorded by the shareholders and creditors of the Petitioner companies, representation/reports filed by the RD and the OL, and no objections received to the proposed Scheme, there appears to be no impediment to grant of sanction to the Scheme. Consequently, sanction is hereby granted to the Scheme under Sections 391 and 394 of the Act. The Petitioner companies will comply with the statutory requirements in accordance with law - The certified copy of the order will be filed with the ROC within 30 days from the date of receipt of the same. In terms of Sections 391 and 394 of the Act and in terms of the Scheme, the whole of the undertaking, the property, rights and powers of the Transferor company shall be transferred to and vest in the Transferee company without any further act or deed. Similarly, in terms of the Scheme, all the liabilities and duties of the Transferor company shall be transferred to the Transferee company without any further act or deed. Upon the Scheme coming into effect the Transferor company shall stand dissolved without winding up. It is, however, clarified that this order will not be construed as an order granting exemption from payment of stamp duty or taxes or any other charges, if payable in accordance with any law; or permission/compliance with any other requirement which may be specifically required under any law - Petition allowed.

Summary

Issues Involved:
1. Sanction of Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956.
2. Share exchange ratio determination.
3. Compliance with Reserve Bank of India regulations under FEMA.
4. Undertakings by the Transferee company.
5. No objections received to the proposed Scheme.
6. Approval by shareholders and creditors.
7. Transfer of assets, liabilities, and dissolution of Transferor company.
8. Compliance with statutory requirements.
9. Filing of certified copy of the order with the ROC.
10. Clarification on exemption from stamp duty, taxes, and charges.
11. Voluntary deposit in the Common Pool Fund of the OL.

Detailed Analysis:

1. The judgment pertains to a second motion joint petition filed under Sections 391 to 394 of the Companies Act, 1956 seeking sanction of the Scheme of Amalgamation between two companies. The petition includes details of the companies' incorporation, capital structure, resolutions by the Boards of Directors, and absence of pending proceedings under relevant sections of the Act.

2. The Scheme outlines the share exchange ratio for amalgamation, specifying the issuance of fully paid-up equity shares by the Transferee company to the members of the Transferor company. The Court had previously allowed dispensation of shareholder and creditor meetings, and now the petition seeks sanction of the Scheme.

3. The Official Liquidator (OL) and Regional Director (RD) were issued notices, and the OL's report confirmed no complaints against the Scheme. The RD raised concerns regarding the exchange ratio determination and compliance with RBI regulations under FEMA, which were addressed by the Petitioner companies through affidavits clarifying the qualifications of the valuation team and commitment to compliance.

4. No objections were received to the proposed Scheme, as confirmed by the authorized signatory of the Petitioner companies. With approval from shareholders and creditors, as well as positive reports from the RD and OL, the Court found no impediment to granting sanction to the Scheme under Sections 391 and 394 of the Act.

5. The order directs compliance with statutory requirements, including filing a certified copy with the ROC within 30 days, transferring assets and liabilities as per the Scheme, and dissolution of the Transferor company without winding up. The order also clarifies that it does not exempt from stamp duty, taxes, or other charges, and emphasizes compliance with all legal requirements.

6. The Petitioner companies voluntarily agreed to deposit a sum in the Common Pool Fund of the OL. The petition was allowed, and the order was issued for immediate action.