2016 (3) TMI 1414 - HC - Companies Law

Sanction of the Scheme of Amalgamation - section 391 and 394 of Companies Act - HELD THAT - In view of the approval accorded to the scheme by the shareholders, secured and unsecured creditors of the petitioners and, given the fact, that the RD and the OL have not articulated any objections qua the scheme, as indicated above, in my opinion, there appears to be no impediment in the grant of sanction to the scheme. Consequently, sanction is granted to the scheme in terms of Section 391 and 394 of the Act. The petitioners will, however, comply with all statutory requirements, as mandated in law. It is directed that the petitioners will comply with all provisions of the scheme - Petition allowed.

Issues:
1. Sanction of Scheme of Amalgamation under Sections 391 and 394 of the Companies Act 1956.

Detailed Analysis:
1. The petition filed jointly by several transferor companies sought sanction of the Scheme of Amalgamation to consolidate shareholdings, finances, and management for enhanced competitiveness and financial growth.

2. The scheme indicated that the entire share capital of the transferor companies was held by the transferee company, and thus, no shares would be issued post-amalgamation.

3. The jurisdiction of the court was established as the registered offices of the petitioners were within its jurisdiction, allowing for the court's adjudication on the petition.

4. Details regarding the petitioners' capital structure, including authorized, issued, subscribed, and paid-up capital, were provided in the petition for reference.

5. Supporting documents such as Memorandum, Articles of Association, profit and loss accounts, and Balance Sheets were filed along with the petition.

6. Board of Directors' resolutions approving the scheme were also submitted with the petition.

7. The petitioners confirmed the absence of pending proceedings against them under specific sections of the Companies Act.

8. Previous motions related to dispensing with the requirement of convening meetings of shareholders and creditors were discussed, with approvals obtained from most parties.

9. Notice for the current petition was duly issued and accepted by relevant parties, and citations were published in newspapers as per court orders.

10. Affidavits from the Regional Director (RD) and Official Liquidator (OL) indicated no objections to the scheme, with compliance with circulars and communications with regulatory authorities.

11. The OL's report highlighted the absence of complaints regarding the scheme and affirmed that the companies' affairs were conducted in a non-prejudicial manner.

12. Provisions in the scheme regarding employee transitions, transfer of assets and liabilities, and dissolution of transferor companies without winding up were noted.

13. With approvals from shareholders, secured and unsecured creditors, and no objections from regulatory authorities, the court granted sanction to the scheme under Sections 391 and 394 of the Act.

14. The petitioners were directed to ensure compliance with all statutory requirements and file the sanctioned order with the ROC within the stipulated timeframe.

15. Any deficiencies or violations of laws post-sanction would not impede legal actions against concerned persons, directors, or officials.

16. The order did not exempt the petitioners from stamp duty, taxes, charges, permissions, or compliances required by law.

17. The petition was allowed and disposed of accordingly, emphasizing compliance with all provisions of the scheme and legal obligations.

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