2015 (8) TMI 1503 - HC - Companies Law

Sanction of the proposed scheme of amalgamation - only observation made by the Regional Director in his report is that the scheme may be made effective subject to sanction of the scheme of amalgamation in favour of the transferor companies by the Delhi High Court in whose jurisdiction those companies are registered - HELD THAT - Having regard to the report of the Regional Director South Eastern Region Ministry of Corporate Affairs Hyderabad and as no objections/claims have been received in pursuance of the advertisement got published by the petitioner in the newspapers this Court is of the opinion that the proposed scheme of amalgamation is in conformity with the provisions of the Act and the same does not in any manner affect the interests of any of the stake holders including the public. Therefore the proposed scheme of amalgamation is sanctioned with effect from the appointed date i.e. 01.04.2015 subject to sanction of the scheme of amalgamation in favour of the transferor companies by the Delhi High Court. The petitioner shall cause a certified copy of this order to be delivered to the Registrar of Companies for the State of Telangana and State of Andhra Pradesh Hyderabad within 30 days of its receipt and take all other consequential steps in pursuance of the approval of the scheme of amalgamation. Petition allowed.

Summary

Issues:
Company petition for sanction of proposed scheme of amalgamation under Sections 391 and 394 of the Companies Act, 1956.

Analysis:
The Company Petition was filed by M/s Empower Research Knowledge Services Private Limited (Transferee Company) seeking approval for the amalgamation of seven companies (Transferor Companies) under Sections 391 and 394 of the Companies Act, 1956. The petitioner company detailed its incorporation date, registered office, main objects, share capital structure, shareholders, and creditors. It emphasized that the Transferor Companies are wholly-owned subsidiaries engaged in similar businesses, highlighting the synergies that could be achieved through consolidation. The proposed amalgamation was seen as a strategic move to leverage assets, build a stronger business, and enhance growth opportunities for all stakeholders.

The petitioner obtained resolutions approving the scheme of amalgamation from its Board of Directors and the Board of Directors of the Transferor Companies. Shareholders of the petitioner company provided consent affidavits for the proposed scheme, and the majority of unsecured creditors also expressed no objection to the amalgamation. The petitioner filed a copy of the proposed scheme of amalgamation and sought dispensation from holding meetings of equity shareholders and unsecured creditors, which was granted by the Court.

The Court ordered notice of the Company Petition to the Regional Director, Ministry of Corporate Affairs, and directed publication in two newspapers. The Regional Director's report highlighted compliance with statutory requirements and the absence of objections from the Income Tax Department. The Regional Director recommended making the scheme effective subject to the Delhi High Court's sanction for the transferor companies registered in its jurisdiction.

Considering the report and lack of objections, the Court found the proposed scheme of amalgamation in line with legal provisions and not detrimental to stakeholders' interests. The Court sanctioned the scheme with effect from the appointed date, subject to approval by the Delhi High Court for the transferor companies. The petitioner was instructed to deliver a certified copy of the order to the Registrar of Companies and take necessary steps to implement the approved scheme. Consequently, the Company Petition was allowed, and the proposed amalgamation was approved.