2016 (2) TMI 92 - HC - Companies Law

Scheme of Amalgamation - Scheme of arrangement is in the interest of the shareholders and creditors of all the companies as well as in the public interest, therefore, the same deserves to be sanctioned.

Summary

Issues:
1. Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956.
2. Dispensation of meetings of Equity Shareholders and Unsecured Creditors.
3. Official Liquidator's report and directions for preservation of books of accounts.
4. Observations by the Central Government and compliance with Income Tax Act.
5. Sanction of the Scheme of arrangement.

Analysis:
1. The judgment pertains to two Companies seeking the Court's sanction for a Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956. Both companies belong to the same management group, with one primarily engaged in advisory services related to corporate laws and the other focused on taxation and allied laws. The proposed amalgamation aims for synergic benefits as detailed in the petitions.

2. Meetings of Equity Shareholders and Unsecured Creditors of both companies were dispensed with based on the consent letters received. No objections were raised post the publication of the hearing notice in newspapers. There were no Secured Creditors involved. The petitions for the Scheme's sanction were admitted, and the publication in the Government Gazette was waived as per orders.

3. The Official Liquidator's report confirmed that the Transferor Company conducted its affairs within its object clauses and not prejudicial to members or public interest. However, directions were issued to preserve books of accounts and records post-dissolution, with compliance to statutory liabilities even after the Scheme's sanction.

4. Observations by the Central Government were addressed, including compliance with the Income Tax Act and Rules. The Income Tax Department's presumed no-objection due to the statutory period lapse was noted. The Court found the Scheme to be in the interest of shareholders, creditors, and public interest, leading to its sanction.

5. The Court granted the prayers in the Company Petitions, disposing of them accordingly. Costs to Central Government Standing Counsel and Official Liquidator were quantified. Directions were given for lodging the order, assets schedule, and Scheme for stamp duty adjudication and filing with concerned authorities. The issuance of the drawn-up order was dispensed with for expeditious action based on the authenticated copy of the order and Scheme.