2016 (4) TMI 435 - HC - Companies Law

Scheme of Amalgamation - Held that - Perusal of the Scheme and the proceedings, it appears that the requirements of the provisions of sections 391 to 394 of the Companies Act, 1956 are satisfied. The Scheme appearing to be genuine and in the interest of the shareholders and creditors. This Court, therefore, allows the Company Petitions and approves the Scheme. The Scheme is hereby sanctioned. The prayers made in the respective Company Petitions are hereby granted.

Summary

Issues:
1. Sanctioning of the Scheme of Amalgamation of two companies.
2. Dispensing with the convening and holding of meetings of Equity Shareholders and Creditors.
3. Compliance with legal requirements under the Companies Act, 1956.

Analysis:
1. The petitions were filed by two companies seeking sanction for the Scheme of Amalgamation. The Court had earlier dispensed with the meetings of Equity Shareholders and Creditors based on consent affidavits received from all parties involved.

2. The companies subsequently filed the Company Petitions seeking approval of the Scheme. The Court admitted the petitions, directed notice issuance to the Regional Director and Official Liquidator, and ordered publication in newspapers. Affidavits confirming publication were filed, and notices were served to relevant authorities.

3. Post the initial orders, the Transferee Company submitted subsequent facts regarding share allotment options. The Regional Director raised concerns regarding share exchange ratios, compliance with Accounting Standard 14, and Income Tax Act compliance. The companies responded, justifying the share exchange ratios, compliance with Income Tax Act, and addressing concerns raised by the Regional Director.

4. The Official Liquidator submitted a report stating no prejudicial conduct in the affairs of the Transferor Company. The companies ensured compliance with observations made by the Official Liquidator. The Court, after considering all facts and compliance with legal provisions, approved and sanctioned the Scheme, finding it genuine and in the interest of shareholders and creditors.

5. The Court allowed the petitions, approved the Scheme, and granted the prayers made in the Company Petitions. Fees for legal representatives were quantified and directed to be paid by the Transferee Company. Filing and issuance of drawn-up orders were dispensed with, and concerned authorities were directed to act on the authenticated copy of the order along with the Scheme issued by the Registrar within 10 days.