2016 (2) TMI 176 - HC - Companies Law

Scheme of Amalgamation - amendment to clause - Held that - As the scheme at clause 9(a) is hereby modified and relevant extract of the clause 9(a) be read as 1(one) Equity shares of ₹ 10/each credited as fully paidup held by such member in the capital of the Transferor Company. In respect to entitlement to a shareholder, the same shall be rounded to the next nearest integer . The amendment as above is permitted to be carried out in the Scheme. As per the report of the Official Liquidator, the petitioner has undertaken to preserve the books of account, papers and records and not to dispose of the records without the prior permission of Central Government, as per the provisions of Section 396(A) of the Companies Act, 1956, as well to comply with all statutory provisions. Considering the above facts and circumstances, the prayers made in the petitions are granted. The Scheme at Exhibit D , with both the petitions is sanctioned, with the modification as directed above, in respect of clause 9(a).

Summary

Issues: Petitions for sanctioning of a Scheme of Amalgamation involving compliance with Accounting Standard 14, meeting of Secured Creditors, tax demands, share exchange ratio, and statutory requirements.

Analysis:
1. Dispensation of Meetings: The petitioners sought dispensation of meetings for considering the Scheme of Amalgamation of two companies. The Court passed an order allowing the same after considering the applications.

2. Compliance with Legal Requirements: The Regional Director and Official Liquidator raised observations regarding compliance with Accounting Standard 14, meeting of Secured Creditors, tax demands, share exchange ratio, and other statutory requirements. The petitioner responded to these queries through an affidavit, ensuring compliance with the law and rectifying errors in the Scheme.

3. Approval of Scheme: The Regional Director and Official Liquidator confirmed that the Scheme was not prejudicial to the interests of shareholders or the public. The Court modified a clause in the Scheme and permitted the amendment. The petitioner undertook to preserve records and comply with statutory provisions.

4. Costs and Directions: The Court granted the prayers made in the petitions, sanctioning the Scheme with modifications. Costs were imposed on the Transferor Company and the petitioners, along with directions for authentication and issuance of orders by the Registrar of the High Court of Gujarat within a specified timeline.

This detailed analysis covers the key issues addressed in the legal judgment regarding the sanctioning of the Scheme of Amalgamation, ensuring compliance with legal requirements, and the final directives issued by the Court.