2016 (3) TMI 979 - HC - Companies Law

Scheme of Amalgamation - Held that - As it appears that the requirements of the provisions of sections 391 to 394 of the Companies Act, 1956 are satisfied. The Scheme appears to be genuinely in the interest of the shareholders and creditors. This Court, therefore, allows the Company Petitions and sanctions the Scheme. The prayers made in the respective Company Petitions are granted. The petitions are allowed, accordingly.

Summary

Issues:
1. Sanctioning of the Scheme of Amalgamation of multiple companies.
2. Dispensing with the convening and holding of meetings for Equity Shareholders, Secured Creditors, and Unsecured Creditors.
3. Compliance with SEBI Circulars, FEMA, RBI guidelines, Accounting Standard 14, Income Tax Act, and Rules.
4. Report of the Official Liquidator regarding the affairs of Transferor Companies.
5. Compliance with statutory liabilities and applicable laws.

Analysis:

1. The petitions were filed for the sanctioning of the Scheme of Amalgamation involving multiple companies. The Court dispensed with the meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors of the Transferee Company as their rights and interests were not affected by the Scheme.

2. The Regional Director raised concerns regarding compliance with SEBI Circulars, FEMA, RBI guidelines, Accounting Standard 14, and the Income Tax Act. The Petitioner Companies addressed these concerns, stating compliance with SEBI Circulars, non-applicability of FEMA or RBI guidelines due to the Scheme structure, and compliance with the Income Tax Act. The Court directed compliance with the Income Tax Act and Rules.

3. The Official Liquidator's report confirmed that the affairs of the Transferor Companies were not conducted prejudicially. The Petitioner Companies assured compliance with the observations made by the Official Liquidator, ensuring they would not be absolved from their statutory liabilities.

4. After considering the facts and perusing the Scheme, the Court found that the requirements of the Companies Act were satisfied, and the Scheme was in the interest of shareholders and creditors. Consequently, the Court allowed the Company Petitions and sanctioned the Scheme, granting the prayers made in the petitions.

5. The Court quantified the fees for the Assistant Solicitor General of India and the Official Liquidator, to be paid by the Transferee Company. Filing and issuance of drawn-up orders were dispensed with, and all concerned authorities were directed to act on a copy of the order along with the authenticated Scheme provided by the Registrar within seven days.

This detailed analysis of the judgment highlights the key issues involved, the responses to those issues, and the final decision of the Court regarding the sanctioning of the Scheme of Amalgamation.