2016 (5) TMI 1618 - HC - Companies Law

Seeking sanction of the Scheme of Amalgamation - Sections 391(2) 394 of the Companies Act 1956 - HELD THAT - Considering the approval accorded by the equity shareholders and creditors of the petitioner companies to the proposed Scheme of Amalgamation and the affidavits filed by the Regional Director Northern Region and the Official Liquidator having not raised any objection to the proposed Scheme of Amalgamation there appears to be no impediment to the grant of sanction to the Scheme of Amalgamation. Consequently sanction is hereby granted to the Scheme of Amalgamation under Sections 391 and 394 of the Companies Act 1956. The petitioner companies will comply with the statutory requirements in accordance with law. Certified copy of this order be filed with the Registrar of Companies within 30 days. Petition allowed.

Summary

Issues:
1. Sanction of the Scheme of Amalgamation under Sections 391(2) & 394 of the Companies Act, 1956.

Detailed Analysis:
The judgment involves a joint petition filed by the petitioner companies seeking the sanction of the Scheme of Amalgamation of two transferor companies with a transferee company under Sections 391(2) & 394 of the Companies Act, 1956. The transferor company no. 1 and transferor company no. 2 are to be amalgamated with the transferee company, all having their registered offices in New Delhi. The authorized share capital and details of each company have been provided in the judgment to establish their financial standing and structure.

The Scheme of Amalgamation aims to bring about business synergy, resource pooling, and consolidation of the companies involved. It is claimed that the proposed amalgamation will lead to various benefits such as the elimination of duplicate work, reduction in overheads, better utilization of resources, and overall enhancement of business efficiency. The share exchange ratio has been detailed in the Scheme, specifying the number of equity shares the transferee company will issue to the shareholders of the transferor companies. Notably, the Board of Directors of all companies involved have unanimously approved the proposed Scheme of Amalgamation.

The judgment highlights that no proceedings under specific sections of the Companies Act, 1956 are pending against the petitioner companies. Additionally, the requirement of convening meetings of equity shareholders and unsecured creditors was dispensed with in a previous order. Following due process, notices were issued to relevant authorities, and reports from the Official Liquidator and Regional Director indicated no objections to the proposed Scheme of Amalgamation.

In light of the approvals received and the absence of objections, the High Court granted sanction to the Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956. The order specified compliance with statutory requirements, the filing of a certified copy with the Registrar of Companies, and the dissolution of the transferor companies without winding up. Costs were also addressed, with the petitioners directed to deposit a specified sum with the Common Pool Fund of the Official Liquidator. Ultimately, the petition was allowed as per the terms outlined in the judgment.