2014 (8) TMI 493 - HC - Companies Law

Application for sanction to the Scheme of Amalgamation - Held that - Official Liquidator has filed his report, wherein he has stated that he has not received any complaint against the proposed Scheme from any person/party interested in the Scheme in any manner and that the affairs of the Transferor Company, which is subject matter of dissolution, do not appear to have been conducted in a manner prejudicial to the interest of its members, creditors or to public interest as per the 2nd Proviso of section 394 (1) of the Act. In view of the approval accorded by the Shareholders and Creditors of the Petitioner Companies; representation/reports filed by the Regional Director, Northern Region and the Official Liquidator, attached with this Court to the proposed Scheme of Amalgamation, there appears to be no impediment to the grant of sanction to the Scheme of Amalgamation. Consequently, sanction is hereby granted to the Scheme of Amalgamation under sections 391 and 394 of the Act. The Petitioner Companies will comply with the statutory requirements in accordance with law - Amalgamation sanctioned.

Summary

Issues:
1. Seeking sanction to the Scheme of Amalgamation under sections 391 to 394 of the Companies Act, 1956.
2. Compliance with statutory requirements for amalgamation.
3. Response from Official Liquidator and Regional Director, Ministry of Corporate Affairs.
4. Change of name of the Transferee Company.
5. Approval and objections to the Scheme of Amalgamation.

Analysis:
1. The judgment pertains to a second motion joint Petition filed under sections 391 to 394 of the Companies Act, 1956, seeking sanction for the Scheme of Amalgamation between two companies. The Petitioner Companies, Transferor and Transferee, are based in New Delhi. Details regarding their incorporation, capital structure, and relevant documents like Memorandum and Articles of Association have been provided.

2. The Petitioner Companies had previously filed for dispensation of meetings, which was granted by the Court. Subsequently, the present petition was filed for sanction to the Scheme of Amalgamation. Notice was issued to the Regional Director, Northern Region, Ministry of Corporate Affairs, and the Official Liquidator. Affidavits of service and publication were filed, along with compliance details.

3. The Official Liquidator, after seeking information and conducting due diligence, submitted a report stating no complaints against the proposed Scheme. The Regional Director, Ministry of Corporate Affairs, also filed a report supporting the Scheme, mentioning the transfer of employees and lack of objections from the Income Tax Department. The change of name of the Transferee Company was addressed in the submissions.

4. The Petitioner Companies undertook to follow the necessary procedures for changing the name of the Transferee Company as per the Scheme of Amalgamation. The concerns raised by the Regional Director were duly addressed, and all statutory compliances were assured to be followed.

5. With no objections received from any party, including the Income Tax Department, and approval from Shareholders and Creditors, the Court granted sanction to the Scheme of Amalgamation under sections 391 and 394 of the Act. The order specified the transfer of property, rights, and liabilities to the Transferee Company, leading to the dissolution of the Transferor Company without winding up.

6. The judgment clarified that it did not exempt the parties from stamp duty or other charges as per the law. Additionally, the Petitioner Companies agreed to deposit a sum in the Common Pool fund of the Official Liquidator. The Petition was allowed as per the terms mentioned in the judgment.