2015 (6) TMI 41 - HC - Companies Law

Application for the Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956 - Regional Director s observation regarding compliance of norms of Telecom Regulatory Authority of India (TRAI) duly addressed - Held that - Although the Regional Director in his report has not raised any objection to the proposed Scheme, but in para 7 of his report, he has pointed out that the petitioner companies in their reply have submitted that the transferee company is registered as a Tele Marketer with Telecom Regulatory Authority of India (TRAI) and has to comply with norms specified by them along with the governance principles laid down by the corporation. He, therefore, prays that the transferee company may be directed to give an undertaking that it has complied with norms specified by them along with the governance principles laid down by the corporation (especially around Data integrity & Respect for privacy). In reply, the petitioner companies have filed an affidavit dated 16th March, 2015 of Mr. Manish Motani, authorized signatory of the petitioner companies, undertaking to comply with the norms specified by the Telecom Regulatory Authority of India in terms of the Telecom Commercial Communications Customer Preference Regulations, 2010 and other applicable regulations, rules or guidelines, as also the governance principles laid by the TRAI. The aforesaid undertaking is accepted and the petitioner shall remain bound by the same. In view of the above, the observation made by the Regional Director stands 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, 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. - Application of Scheme of Amalgamation approved.

Summary

Issues:
- Sanction of Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956.

Analysis:
1. Background of Companies: The petition involves a joint petition filed by two companies under Sections 391 to 394 of the Companies Act, 1956, seeking sanction for the Scheme of Amalgamation. The transferor company, originally incorporated as T. T. Travels Private Limited, changed its name multiple times and became American Express Foreign Exchange Services India Limited. The transferee company, initially Tata Finance American Express Private Limited, changed its name to American Express Services India Limited. Both companies have their registered offices in New Delhi.

2. Authorized Share Capital: The transferor company has an authorized share capital of Rs. 14,20,00,000 divided into equity shares of Rs. 10 each, while the transferee company has an authorized share capital of Rs. 55,00,00,000 divided into equity shares of Rs. 10 each. Details of the issued, subscribed, and paid-up share capital for both companies are provided in the petition.

3. Scheme of Amalgamation: The Scheme of Amalgamation aims to enhance decision-making, administration, and cost reduction, along with optimizing resource utilization. The share exchange ratio specifies that no consideration will be payable by the transferee company for the shares of the transferor company, given their existing shareholding relationship.

4. Approval and Compliance: The Board of Directors of both companies unanimously approved the proposed Scheme of Amalgamation. Previous court orders dispensed with the requirement of convening meetings of equity shareholders and creditors. The Official Liquidator and Regional Director did not raise objections to the scheme, and compliance with statutory requirements is emphasized.

5. Sanction and Dissolution: Considering the approval from shareholders and creditors, along with no objections from regulatory authorities, the court grants sanction to the Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956. The transferor company will stand dissolved from the appointed date of Amalgamation.

6. Costs and Undertaking: The Official Liquidator requests costs for the examination of records, which the petitioners agree to deposit. An undertaking is provided regarding compliance with norms specified by the Telecom Regulatory Authority of India, ensuring data integrity and respect for privacy.

7. Conclusion: The petition is allowed, and the companies are directed to comply with statutory requirements. The order does not exempt payment of stamp duty. The companies are required to deposit costs in the Common Pool Fund of the Official Liquidator.