2016 (4) TMI 359 - HC - Companies Law

Scheme of Amalgamation - Held that - The Official Liquidator has opined that the affairs of the Petitioner Transferor Company have not been conducted in a manner prejudicial to the interest of its members or to the public interest. In the view of this Court, there does not appear to be any impediment to the grant of sanction to the Scheme of Amalgamation. From the material on record and upon perusal of the Scheme, it appears to be fair, and reasonable and does not appear to contain any clause that is contrary to public policy. The Amalgamation under the proposed Scheme appears to be in the interest of the companies and their members and creditors and, therefore, deserves to be sanctioned. Accordingly, the Scheme as proposed by the Petitioner Company is hereby sanctioned.

Summary

Issues:
Sanction of scheme of Amalgamation under Companies Act, 1956 and 2013; Compliance with SEBI Circulars, AS14, and Income Tax Act; Observations by Regional Director and Income Tax Department; Report by Official Liquidator; Preservation of books of accounts and records; Sanction of the Scheme; Payment of professional charges; Lodging of order and Scheme for stamp duty adjudication; Filing with Registrar of Companies; Disposal of the petition.

Analysis:
The petition was filed for the sanction of a scheme of Amalgamation between two companies under Sections 391 to 394 of the Companies Act, 1956, and the corresponding provisions of the Companies Act, 2013. The scheme aimed at integrating operations, simplifying group structure, and achieving synergy benefits. Meetings of shareholders and creditors were dispensed with due to written consents. The petition was admitted by the Court, and public notices were duly advertised.

The Regional Director raised observations regarding compliance with SEBI Circulars, AS14, and the Income Tax Act. The Income Tax Department emphasized the need to protect its interests. The petitioner assured compliance with all requirements, including tax liabilities, subject to the outcome of pending appeals. The Regional Director reported no complaints against the petitioner companies.

The Official Liquidator's report stated that the affairs of the Transferor Company were not prejudicial. The petitioner agreed to preserve books of accounts and comply with statutory requirements. The Court, after hearing all parties, found no impediment to granting sanction to the Amalgamation scheme, deeming it fair, reasonable, and in the interest of companies, members, and creditors. The scheme was sanctioned, with a clarification that liabilities remain unaffected by the sanction.

Professional charges were awarded, and the Official Liquidator's costs were approved. The petitioner was directed to lodge the order and Scheme for stamp duty adjudication and file them with the Registrar of Companies. The issuance of the drawn-up order was dispensed with, and all authorities were instructed to act promptly on the authenticated copy of the order and Scheme.

In conclusion, the petition was disposed of, with all terms and directives duly outlined for the implementation of the sanctioned scheme.