2015 (5) TMI 764 - HC - Companies Law

Application for Scheme of Amalgamation under sections 391(2) & 394 of the Companies Act, 1956 - Regional Director s observation regarding all FEMA compliances , Non filing of e-form 32 (DIR 12) regarding regularization of their Additional Director duly addressed - Held that - Although no objection has been raised by the Regional Director, but in Para 4 of his report, he has submitted that on perusal of the shareholding pattern of both the companies, it has been observed that all the shares are held by foreign companies. He, therefore, prayed that the petitioner company may be asked to give an undertaking for all compliances from Reserve Bank of India as required under FEMA for above transactions involving foreign banks/entities. Further, in para 5 of the report, he has pointed out that the petitioner has not filed the requisite e-form 32 (DIR 12) regarding regularization of their Additional Director, namely Sh. Raman Nagpal. In reply to the aforesaid, the petitioner has undertaken to comply with the statutory provisions under the FEMA and the RBI Act, and the rules and regulations framed thereunder. The same is accepted and the petitioner shall remain bound by the same. The Assistant Registrar of Companies has submitted that the petitioner has also filed the relevant e-form 32 (DIR 12) with regard to the Director, Sh. Raman Nagpal for regularization of his directorship. In view of the aforesaid, the observations raised by the Regional Director, Northern Region stand satisfied. Considering the approval accorded by the equity shareholders and creditors of the petitioner companies to the proposed Scheme of Amalgamation and the affidavits filed by the Regional Director, Northern Region 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, subject to sanction of the Scheme of Amalgamation in respect of the transferor company from the court of competent jurisdiction, sanction is hereby granted to the Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956. - Application for Scheme of Amalgamation approved.

Summary

Issues:
Petition under sections 391(2) & 394 of the Companies Act, 1956 for sanction of Scheme of Amalgamation.

Detailed Analysis:

1. Jurisdiction and Incorporation: The petition involves a request for sanction of the Scheme of Amalgamation by the petitioner/transferee company under sections 391(2) & 394 of the Companies Act, 1956. The petitioner/transferee company is located in New Delhi, within the jurisdiction of the Delhi High Court, whereas the transferor company is situated in Chennai. Separate proceedings have been initiated in the High Court of Judicature at Madras for the transferor company.

2. Company Details: The petitioner/transferee company was incorporated under the Companies Act, 1956 in July 1997. The authorized share capital, issued, subscribed, and paid-up share capital of the company have been specified in the petition along with the submission of relevant documents such as Memorandum, Articles of Association, and audited balance sheets.

3. Scheme of Amalgamation: The Scheme of Amalgamation aims to merge Efficient Frontier Technology India Private Limited with Adobe Systems India Private Limited. The petition outlines the benefits of the proposed amalgamation, including pooling of resources for software development, financial strength, flexibility, and enhanced business potential. The share exchange ratio is detailed in the Scheme, and the Board of Directors of the petitioner company has approved the proposed Scheme.

4. Compliance and Approvals: The petitioner has confirmed that no proceedings under Sections 235 to 251 of the Companies Act, 1956 are pending against the petitioner/transferee company. The Board of Directors' approval, compliance with statutory requirements, and absence of objections from shareholders and creditors have been highlighted in the petition.

5. Regional Director's Report: The Regional Director, Northern Region, has submitted a report regarding the Scheme of Amalgamation. While raising no objections, certain observations were made regarding shareholding pattern, compliance with FEMA regulations, and filing of requisite forms. The petitioner has provided undertakings to comply with statutory provisions, and necessary filings have been completed.

6. Sanction and Compliance: Considering the approval from equity shareholders and creditors, along with the absence of objections, the court has granted sanction to the Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956. The petitioner is required to comply with statutory requirements, file a certified copy of the order with the Registrar of Companies, and ensure payment of stamp duty as per the law. The effective date of amalgamation is specified as 1st April, 2013.

7. Conclusion: The petition seeking sanction of the Scheme of Amalgamation has been allowed by the court, subject to compliance with statutory provisions and the effective date of amalgamation.