2015 (12) TMI 1900 - HC - Companies Law

Sanction of Composite Scheme of Arrangement in the nature of Slump Sale - HELD THAT - This Court is of the view that the present Scheme of Arrangement is in the interest of the shareholders and creditors of all the companies as well as in the public interest, therefore, the same deserves to be sanctioned. Petition disposed off.

Summary

Issues:
Petitions for sanction of Composite Scheme of Arrangement involving Slump Sale and Amalgamation under sections 391 to 394 of the Companies Act, 1956.

Analysis:
1. The petitions were filed by three companies for the sanction of a Composite Scheme of Arrangement involving a Slump Sale of Stock Broking Business Undertakings by the Transferor Company to the Transferee Company and the Amalgamation of residue Undertaking with another company. The reorganization was proposed to realign business operations within the same management group. The advantages of the reorganization included effective control of business segments, growth strategies, and efficient handling of different businesses.

2. Meetings of shareholders and creditors were dispensed with based on consent letters and approvals obtained. The petitions for sanction were admitted after due advertisement of the hearing. No objections were received post-publication. The Official Liquidator recommended dissolution of the Transferor Company subject to preserving books and records. The Central Government's observations on accounting treatment were addressed by the petitioners, citing compliance with accounting standards and necessary disclosures.

3. The Court considered the submissions, affidavits, and judgments, concluding that the Scheme was in the interest of shareholders, creditors, and the public. The observations made by the Regional Director no longer raised concerns, and the Scheme deserved sanction. Orders were granted in favor of the petitions, and costs were quantified for the Central Government Standing Counsel and the Official Liquidator. Directions were given for stamp duty adjudication, filing with authorities, and issuance of the order.

4. The Court directed the petitioner companies to comply with all statutory liabilities even after the Scheme's sanction. The Scheme was deemed to be in the best interest of all stakeholders involved, leading to the grant of the petitions and the subsequent disposal of the cases.