2016 (2) TMI 242 - HC - Companies Law

Scheme of Amalgamation sanctioned. As directed that the petitioner shall preserve its books of accounts, papers and records and shall not dispose of the records without the prior permission of the Central Government under Section 396A of the Companies Act, 1956. Filing and issuance of drawn up order is hereby dispensed with and all the authorities to act on a copy of this order along with the Scheme duly authenticated by the Registrar, High Court of Gujarat. The Registrar, High Court of Gujarat shall issue the authenticated copy of this order along with Scheme as expeditiously as possible.

Summary

Issues:
1. Sanction of Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956.
2. Dispensation of meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors.
3. Response to observations from Regional Director and Official Liquidator.
4. Preservation of books of accounts, papers, and records.
5. Adjudication of stamp duty and filing requirements post-sanction.

Analysis:
1. The petition sought the sanction for the Scheme of Amalgamation of two companies under Sections 391 to 394 of the Companies Act, 1956. The Holding Company had previously obtained an order that no separate proceedings were required for it. The Transferor Company also obtained dispensation of meetings for Equity Shareholders, Secured Creditors, and Unsecured Creditors. The petition was admitted, and notice was issued to the Regional Director and Official Liquidator, followed by publication in local newspapers.

2. The Regional Director, in response, made observations regarding compliance with the Income Tax Act, to which the petitioner responded, citing circulars and willingness to comply. The Official Liquidator confirmed no prejudicial conduct but requested preservation of records. After hearing all parties, the Court found it appropriate to grant sanction to the Scheme of Amalgamation, directing the preservation of records and compliance with Section 396A.

3. The Court sanctioned the Scheme of Amalgamation, with directions to preserve records and seek permission before disposal. Costs were determined, and the petitioner was instructed to lodge assets schedule and Scheme for stamp duty adjudication. Filing requirements with the Registrar of Companies were specified, along with dispensation of drawn-up order issuance, allowing authorities to act on an authenticated copy promptly.

4. The judgment concluded by disposing of the petition accordingly, addressing all issues raised during the process. The detailed analysis covered the legal proceedings, responses to observations, compliance with regulatory requirements, and final directives post-sanction. The judgment ensured adherence to the Companies Act provisions and safeguarding of interests during the amalgamation process.