2009 (9) TMI 1045 - HC - Companies Law

Summary

Issues Involved:
1. Sanction of the Scheme of Amalgamation.
2. Dispensation of meetings of shareholders and creditors.
3. Compliance with publication and notice requirements.
4. Objections from the Central Government and Official Liquidator.
5. Consideration of the appointed date in the Scheme of Amalgamation.
6. Judicial scrutiny and modification of the Scheme.

Summary:

1. Sanction of the Scheme of Amalgamation:
The petitions sought sanction for the Scheme of Amalgamation of six transferor companies with one transferee company. The Scheme was produced at Annexure-C in the petitions.

2. Dispensation of Meetings of Shareholders and Creditors:
In Company Petition Nos. 110/2009 and 111/2009, meetings of equity shareholders and preference shareholders were dispensed with as all had given consent. In Company Petition Nos. 112, 113, 114, and 115 of 2009, meetings of equity shareholders and unsecured creditors were dispensed with. In Company Petition No. 116 of 2009, meetings of equity shareholders and unsecured creditors were also dispensed with.

3. Compliance with Publication and Notice Requirements:
The petitions were admitted on 5-5-2009, and it was ordered to advertise in two daily newspapers. Notice was issued to the Central Government and the Official Liquidator. Compliance with publication was confirmed through affidavits, and no objections were received from the public.

4. Objections from the Central Government and Official Liquidator:
The Central Government, through the Deputy Registrar of Companies, requested the submission of the latest financial statements, which were already provided. The Official Liquidator's report stated that the affairs of the transferor companies were not conducted prejudicially to the interest of members or public interest.

5. Consideration of the Appointed Date in the Scheme of Amalgamation:
The appointed date in the Scheme was 1-4-2008. The Court considered the relevance of the appointed date concerning fiscal laws and accounting years. It was noted that the statutory process for convening meetings was initiated after the end of the accounting year 2008-09, in April 2009. The Court emphasized the importance of initiating statutory processes within the relevant accounting year to avoid complications.

6. Judicial Scrutiny and Modification of the Scheme:
The Court referred to the powers u/s 392(1) and 394(1) of the Companies Act to supervise and modify the Scheme. Citing the case of Miheer H. Mafatlal v. Mafatlal Industries Ltd., the Court highlighted its duty to ensure the Scheme is fair, just, reasonable, and not contrary to law or public policy. The Court decided to modify the appointed date to 1-4-2009, considering the delay in initiating the statutory process.

Conclusion:
The Scheme of Amalgamation was sanctioned with the modification that the appointed date shall be 1-4-2009 instead of 1-4-2008. The petitions were allowed to this extent, and costs were directed to be paid to the Central Government Standing Counsel and the Official Liquidator.