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2015 (4) TMI 987 - HC - Companies LawApplication for sanction of the Scheme of Amalgamation under Sections 391(2) & 394 of the Companies Act, 1956 - No objection received from any of the party i.e. Regional Director, Northern Region, and the Official Liquidator - Held that - Considering the approval accorded by the equity shareholders, secured and unsecured creditors of the petitioner companies to the proposed Scheme of Amalgamation and the affidavits filed by the Regional Director, Northern Region, and the Official Liquidator not raising any objection 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 Companies Act, 1956. The petitioner company will comply with the statutory requirements in accordance with law. Certified copy of this order be filed with the Registrar of Companies within 30 days. It is also clarified that this order will not be construed as an order granting exemption from payment of stamp duty as payable in accordance with law. Upon the sanction becoming effective from the appointed date of Amalgamation, i.e. 1st April, 2014, the transferor company shall stand dissolved without undergoing the process of winding up. - Scheme of amalgamation approved.
Issues:
Petition under Sections 391(2) & 394 of the Companies Act, 1956 for sanction of the Scheme of Amalgamation of two companies. Analysis: Issue 1: Scheme of Amalgamation The joint petition was filed seeking sanction of the Scheme of Amalgamation of two companies, the transferor, and the transferee company, under Sections 391(2) & 394 of the Companies Act, 1956. The Scheme aimed at merging Rajgharana Projects Private Limited with Umra Securities Limited, highlighting the business synergy, resource pooling, and overall efficiency enhancement expected from the amalgamation. Issue 2: Share Capital and Ratio Details of the authorized and paid-up share capital of both companies were provided. The share exchange ratio in the Scheme stated that for every 100 equity shares of the transferor company, shareholders would receive 249 equity shares of the transferee company. This ratio was a crucial aspect of the proposed Amalgamation Scheme. Issue 3: Approvals and Resolutions Board of Directors of both companies unanimously approved the proposed Scheme of Amalgamation in separate meetings. Resolutions passed by the Board of Directors were submitted as part of the application, demonstrating internal consent and compliance with corporate governance requirements. Issue 4: Compliance and Reports The petitioners had previously sought directions to dispense with the requirement of convening shareholder and creditor meetings, which was granted by the court. Compliance with statutory requirements, including notice issuance and publication in newspapers, was meticulously followed. Reports from the Official Liquidator and Regional Director did not raise any objections to the Scheme. Issue 5: Sanction of the Scheme Considering the approvals from equity shareholders and creditors, along with the absence of objections from concerned parties, the court granted sanction to the Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956. The order specified compliance with statutory obligations and the dissolution of the transferor company upon the Scheme becoming effective. In conclusion, the judgment sanctioned the Scheme of Amalgamation, emphasizing the legal compliance, internal approvals, absence of objections, and the expected benefits of the merger. The detailed analysis covered various aspects of the legal process, corporate governance, and compliance requirements under the Companies Act, 1956.
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