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2013 (10) TMI 451 - HC - Companies LawSanction of the Scheme of Arrangement - merger - Held that - In view of the approval accorded by the shareholders and creditors of the Petitioner-Transferee company, affidavit filed by the RD to the proposed Scheme, there appears to be no impediment to the grant of sanction to the Scheme. Consequently, sanction is hereby granted to the Scheme under Sections 391 and 394 of the Act. The Petitioner-Transferee company will comply with the statutory requirements in accordance with law. Certified copy of the order will be filed with the Registrar of Companies 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 properties, assets rights and powers of the Demerged Business undertakings of the Demerged company shall be transferred to and vest in the Petitioner-Transferee company without any further act or deed. Similarly, in terms of the Scheme, all the liabilities and duties of the Demerged Business undertakings of the Demerged company shall be transferred to the Petitioner-Transferee company without any further act or deed - 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 department which may be specifically required under any law.
Issues:
1. Petition filed under Sections 391 to 394 of the Companies Act, 1956 seeking sanction of Scheme of Arrangement. 2. Jurisdiction of the court over the registered offices of the companies involved. 3. Details of the incorporation and capital structure of the Petitioner-Transferee company. 4. Submission of necessary documents like Memorandum, Articles of Association, and audited annual accounts. 5. Resolutions passed by the Boards of Directors approving the Scheme. 6. Confirmation of no pending proceedings under Sections 235 to 251 of the Act. 7. Share exchange ratio and provisions regarding issuance of new shares. 8. Dispensation of requirement for convening meetings of shareholders and creditors. 9. Approval of Scheme by unsecured creditors and subsequent petition for sanction. 10. Notice issuance to Regional Director and publication in newspapers. 11. Concerns raised by Regional Director regarding employees and foreign entity shares. 12. Undertakings for compliance with Reserve Bank of India (RBI) requirements under FEMA. 13. Observations regarding decision subject to High Court of Andhra Pradesh. 14. Approval of Scheme by High Court of Andhra Pradesh. 15. Absence of objections to the Scheme. 16. Confirmation of no objections received and compliance with publication requirements. 17. Grant of sanction to the Scheme under Sections 391 and 394 of the Act. 18. Transfer of undertaking, properties, assets, liabilities, and duties as per the Scheme. 19. Clarification on exemption from stamp duty, taxes, or other charges. 20. Voluntary deposit in Common Pool Fund of the Official Liquidator. 21. Petition allowed with specific terms. Detailed Analysis: 1. The petition was filed under Sections 391 to 394 of the Companies Act, 1956 seeking the court's sanction for the Scheme of Arrangement between the Petitioner-Transferee company and the Demerged company, along with their respective shareholders and creditors. 2. The jurisdiction of the court was established over the registered offices of the companies, with the Petitioner-Transferee company located in New Delhi and the Demerged company situated in Hyderabad, outside the court's jurisdiction. 3. Details regarding the incorporation of the Petitioner-Transferee company, including its authorized, issued, subscribed, and paid-up capital, were provided in the petition. 4. Essential documents such as the Memorandum, Articles of Association, and latest audited annual accounts of the Petitioner-Transferee company were submitted as part of the petition. 5. Resolutions approving the Scheme were passed by the Boards of Directors of both the Petitioner-Transferee company and the Demerged company, and these resolutions were included in the record. 6. It was confirmed that no proceedings under Sections 235 to 251 of the Act were pending against the Petitioner-Transferee company. 7. The share exchange ratio and provisions related to the issuance of new shares were outlined in the Scheme, clarifying the process due to the companies' relationship. 8. The court had earlier dispensed with the requirement for convening meetings of certain shareholders and creditors, and subsequent meetings were held as directed. 9. Approval of the Scheme by unsecured creditors led to the filing of the present petition seeking sanction for the Scheme. 10. Notices were issued to the Regional Director and published in newspapers as required, with compliance regarding service and publication demonstrated. 11. Concerns raised by the Regional Director regarding employees and foreign entity shares were addressed through submissions and affidavits. 12. Undertakings for compliance with RBI requirements under FEMA were provided to ensure adherence to regulations concerning foreign entities. 13. Observations were made regarding the decision being subject to the outcome of the High Court of Andhra Pradesh, which had already approved the Scheme. 14. Approval of the Scheme by the High Court of Andhra Pradesh was confirmed, eliminating the need for further consideration on this aspect. 15. Absence of objections to the Scheme indicated a lack of opposition from any party involved in the process. 16. Confirmation of no objections received and compliance with publication requirements reinforced the smooth progress towards obtaining sanction for the Scheme. 17. Granting of sanction to the Scheme under Sections 391 and 394 of the Act was based on the approval of shareholders and creditors, along with compliance with statutory requirements. 18. The transfer of undertaking, properties, assets, liabilities, and duties as per the Scheme was directed without the need for further formalities. 19. Clarifications were provided regarding exemption from stamp duty, taxes, or other charges, emphasizing compliance with relevant laws and regulations. 20. A voluntary deposit in the Common Pool Fund of the Official Liquidator was agreed upon by the Petitioner-Transferee company within a specified timeframe. 21. The petition was allowed with the specified terms, ensuring the completion of the Scheme in accordance with the court's directions.
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