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2015 (3) TMI 990 - HC - Companies LawSanction of the Scheme of Amalgamation - Concern of the Regional Director regarding compliance of provisions of sec.17 of the Companies Act, 1956, in respect of alternation in the Memorandum and Articles of Association has been duly addressed - Held that - In view of the approval accorded by the Shareholders, Secured Creditors and the Unsecured 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, 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, taxes or any other charges, if payable in accordance with law; or permission/compliance with any other requirement which may be specifically required under any law. - Scheme of Amalgamation approved.
Issues:
Petition filed under Sections 391(2) & 394 of the Companies Act, 1956 seeking sanction of the Scheme of Amalgamation involving multiple Transferor Companies and a Transferee Company. Analysis: The petition sought sanction for the Scheme of Amalgamation involving eight Transferor Companies and a Transferee Company under Sections 391 and 394 of the Companies Act, 1956. The Petitioner Companies, including the Transferor and Transferee Companies, were situated in New Delhi. Details regarding the incorporation dates and capital structures of the Petitioner Companies were provided in the petition. The Memorandum and Articles of Association, along with the latest audited financial statements, were enclosed with the petition. Resolutions approving the Scheme were passed by the Board of Directors of the Petitioner Companies. It was confirmed that no proceedings under Sections 235 to 251 of the Companies Act, 1956 were pending against the Petitioner Companies. The Scheme outlined that due to the negative Net Worth of the Petitioner Companies, no share exchange was feasible. The balance sheets of the Transferor Companies were to be consolidated with that of the Transferee Company, with shareholders retaining the same number of shares post-amalgamation. Previous court directions had dispensed with the need for convening meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors. The Official Liquidator reported no complaints against the proposed Scheme, stating that the affairs of the Transferor Companies did not appear prejudicial. The Regional Director raised concerns regarding compliance with Section 17 of the Companies Act, 1956, for altering the Memorandum and Articles of Association. In response to the Regional Director's concerns, the Petitioners undertook to comply with the relevant provisions. No objections to the Scheme were received from any party, including the Income Tax Authorities. With approvals from Shareholders, Secured Creditors, and Unsecured Creditors, as well as positive reports from the Regional Director and Official Liquidator, the court granted sanction to the Scheme of Amalgamation under Sections 391 and 394 of the Act. The order mandated compliance with statutory requirements, transfer of assets and liabilities to the Transferee Company, and dissolution of the Transferor Companies without winding up. The order clarified that it did not exempt from stamp duty or taxes and required a deposit in the Common Pool fund of the Official Liquidator.
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