2015 (3) TMI 67 - HC - Companies Law

Sanction of the Scheme of Arrangement - De-merger - Concern of Regional Director regarding Creation / Satisfaction of charge , Date of valuation report and details of assets & liabilities proposed to be transferred duly addressed - Held that - In view of the approval accorded by the Shareholders and Creditors of the Petitioner Companies; representation/report filed by the Regional Director, Northern Region to the proposed Scheme of Arrangement, there appears to be no impediment to the grant of sanction to the Scheme of Arrangement. Consequently, sanction is here by granted to the revised Scheme of Arrangement under sections 391 and 394; 100 to 104 of the Companies Act, 1956. The Petitioner Companies will comply with the statutory requirements in accordance with law. It is, however, clarified that this order will not be construed as an order granting exemption from payment of stamp duty 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. - Scheme of Amalgamation approved.

Issues:
1. Sanction of Scheme of Arrangement under sections 391 to 394 read with section 100 to 104 of the Companies Act, 1956 for de-merger of two companies into two resultant companies.
2. Compliance with statutory requirements and observations raised by the Regional Director, Northern Region, Ministry of Corporate Affairs.
3. Transfer of assets, liabilities, and employees from the demerged company to the resultant companies.
4. Approval of shareholders and creditors for the scheme of arrangement.

Analysis:

Issue 1: Sanction of Scheme of Arrangement
The petitioners filed a joint petition seeking sanction of the Scheme of Arrangement for the de-merger of Metro Hospital & Research Centre and Nursing College cum Hospital of Metro Institutes of Medical Sciences Pvt Ltd into two resultant companies. The petition included details of the incorporation, capital, and accounts of the petitioner companies. Resolutions approving the scheme were passed by the board of directors. The court had earlier dispensed with the requirement of convening meetings of shareholders and creditors, and reports confirmed unanimous approval by the creditors. The court granted sanction to the revised scheme under relevant sections of the Companies Act, 1956.

Issue 2: Compliance with Statutory Requirements
The Regional Director raised concerns regarding the transfer of charges, valuation dates, assets and liabilities details, cash position, and submission of balance sheets. The petitioners addressed these concerns by providing necessary explanations, documents, and clarifications. The Regional Director's observations were duly addressed, and the court directed compliance with statutory requirements in accordance with the law.

Issue 3: Transfer of Assets, Liabilities, and Employees
The Regional Director highlighted issues related to charges transfer, valuation dates, and details of assets and liabilities. The petitioners clarified that necessary forms for charge creation and satisfaction were filed, and the valuation exercise was based on available financial statements. They also provided details of assets and liabilities as per the proposed scheme. The court directed the transfer of property, rights, powers, liabilities, and duties from the demerged company to the resultant companies without further act or deed.

Issue 4: Approval of Shareholders and Creditors
The court noted the absence of objections from any party regarding the scheme of arrangement. The director of the demerged company confirmed the lack of objections received. With approval from shareholders and creditors, along with the representation/report filed by the Regional Director, the court found no impediment to granting sanction to the scheme of arrangement. The petition was allowed in the specified terms, with compliance requirements outlined for the petitioner companies.

In conclusion, the judgment granted sanction to the scheme of arrangement, addressed concerns raised by the Regional Director, ensured compliance with statutory requirements, and facilitated the transfer of assets, liabilities, and employees as per the de-merger plan.

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