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Issues involved: Application for sanction of a Scheme of Arrangement and Amalgamation between two companies and their shareholders and creditors, approval of scheme by shareholders and creditors, objections raised by Regional Director, compliance with Companies Act, 1956.
Approval of Scheme: Court dispensed with meetings of equity shareholders and creditors of petitioner No.1 as all had given written consent. Meetings of equity shareholders and secured creditors of petitioner No.2 were held, and approvals were obtained. Secured creditors of petitioner No.1 and debenture trustee also approved the scheme. Competition Commission approved the scheme under Section 31(1) of the Competition Act, 2002. Objections by Regional Director: Regional Director raised objections regarding appointed dates, transfer to trust not meeting Companies Act definition, treatment of secured creditors, and potential violation of Section 77 of the Companies Act. Petitioners' Response: Petitioners addressed objections in their affidavit, agreeing to change the appointed date, justifying transfer to trust under Sections 391 to 394 of the Companies Act, clarifying no financial assistance provided, and highlighting creditor consents. Final Hearing and Compliance: Audited accounts of both companies were submitted. Court requested final trust deed and trustee names. Petitioners disclosed trustees and provided final trust deed. Petitioners addressed and resolved all objections raised by the Regional Director. Court Decision: Court allowed the application, amended the scheme's clause, and directed alteration of Schedule 2 to reflect assets and liabilities. Compliance with Companies Act formalities and AS-14 accounting standards required. Computerized printout of the scheme to be appended to the order. Final copy of trust deed to form part of the sanctioned scheme. Petitioner companies to bear costs of the application. Urgent certified photocopies of the order to be provided upon request.
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