2016 (1) TMI 547 - HC - Companies Law

Sanction of Amalgamation and Arrangement - Scheme of Amalgamation and Arrangement is hereby sanctioned with the direction to follow all the procedural formalities.

Summary

Issues:
1. Sanctioning of Scheme of Amalgamation of two companies.
2. Compliance with provisions of FEMA/RBI Act.
3. Confirmation of absence of pending legal proceedings.
4. Binding nature of the Scheme on concerned parties.
5. Deposit in Common Pool Fund Account and publication of order.

Sanctioning of Scheme of Amalgamation:
The petition involves seeking the sanctioning of a Scheme of Amalgamation between two companies, namely Gambro India Private Limited (Transferor Company) and Baxter (India) Private Limited (Transferee Company). The Board of Directors of both companies had approved the Scheme in their respective meetings. The Court had previously dispensed with convening a meeting of Equity Shareholders of the Transferee Company and directed a meeting of Unsecured Creditors, which was duly conducted. The Regional Director of the Ministry of Corporate Affairs raised an issue regarding compliance with FEMA/RBI Act, which was addressed by the petitioner company. The Court, after considering all relevant facts and procedural requirements, sanctioned the Scheme, subject to certain conditions and compliance with applicable laws.

Compliance with provisions of FEMA/RBI Act:
The Regional Director highlighted the need for the Transferee Company to comply with the provisions of FEMA/RBI Act. The Scheme itself addressed this issue by stating that the Transferee Company shall obtain necessary approvals for the issue and allotment of new equity shares. The petitioner company, through an affidavit, undertook to comply with all applicable provisions related to FEMA/RBI Act, Income Tax Act, 1961, or any other relevant laws. The Court, taking into account the assurances provided, sanctioned the Scheme with a requirement for the Transferee Company to adhere to all conditions stipulated under the FEMA/RBI Act and other laws.

Confirmation of absence of pending legal proceedings:
The petitioner company confirmed that there were no ongoing proceedings under specific sections of the Companies Act, 1956, and relevant provisions of the Companies Act, 2013 against it. This confirmation was crucial in establishing the eligibility of the companies for the Scheme of Amalgamation and ensuring a smooth transition of assets and liabilities from the Transferor Company to the Transferee Company.

Binding nature of the Scheme on concerned parties:
The Court declared that the Scheme of Amalgamation would be binding on the Transferor and Transferee Companies, their respective Shareholders, Creditors, and all concerned parties. This binding nature ensures that all stakeholders are legally obligated to adhere to the terms and conditions outlined in the approved Scheme, thereby safeguarding the interests of all involved entities.

Deposit in Common Pool Fund Account and publication of order:
As part of the resolution, the petitioner companies agreed to voluntarily deposit a specified amount in the Common Pool Fund Account of the Official Liquidator within a stipulated timeframe. Additionally, the Court directed the publication of the order in specified newspapers and the official Gazette of the Government of Haryana to inform interested parties. Any individual with a legitimate interest was granted the liberty to apply to the Court for necessary directions in accordance with the law. The order was disposed of accordingly, emphasizing compliance with the sanctioned Scheme and associated legal obligations.

This detailed analysis of the judgment from the Punjab and Haryana High Court encompasses all the issues involved, providing a comprehensive overview of the legal proceedings and outcomes related to the Scheme of Amalgamation between the two companies.