2016 (4) TMI 919 - HC - Companies Law

Scheme of Amalgamation - Held that - The observations made by the Regional Director having been addressed and the Official Liquidator having 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 opinion of this Court there does not appear to be any impediment to the grant of sanction to the Scheme of Amalgamation, inasmuch as from the material on record and on perusal of the Scheme, it appears to be fair and reasonable and is not violative of any provisions of law, or 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 with an amendment in Clause 5.1 and Clause 12, as stated in the Affidavit filed by the Petitioner Company. It is, however, clarified that the sanctioning of this Scheme would not absolve anyone, who is otherwise liable for any responsibility or liability, only on account of this sanctioning. It is clarified that the implementation of the present order shall be subject to the proceedings filed by the Transferor Company 1 and Transferee Company before the High Court of Judicature at Bombay.

Summary

Issues involved:
1. Sanction of the Scheme of Amalgamation between two companies under Sections 391 to 394 of the Companies Act, 1956, and Companies Act, 2013.

Analysis:
The petition was filed for the sanction of the Scheme of Amalgamation between two companies, referred to as Transferor Company 1 and Transferor Company 2, with the Transferee Company. The purpose of the amalgamation was to consolidate businesses, maximize synergies, pool resources, achieve economies of scale, and enhance operational efficiencies. Meetings of shareholders and creditors were dispensed with as per the order dated 22nd December, 2015, due to written consents and absence of secured creditors and arrangement with unsecured creditors.

The petition was admitted by the Court, and public notices were duly advertised in newspapers. The Regional Director and Official Liquidator were involved in the process. The Regional Director suggested amendments related to a typographical error and compliance with the Income Tax Act. The Official Liquidator recommended amendments to clauses in the Scheme to include all employees and comply with Section 396A of the Companies Act, 1956.

The Court addressed the observations made by the Regional Director and Official Liquidator, finding no impediment to granting sanction to the Scheme. It deemed the Scheme fair, reasonable, not violative of any law, and in the interest of the companies, members, and creditors. The Scheme was sanctioned with specified amendments. The Court clarified that the sanctioning of the Scheme would not absolve anyone of liability and was subject to proceedings in the High Court of Judicature at Bombay.

The Petitioner Company was directed to pay professional charges, the Official Liquidator's costs, lodge necessary documents for stamp duty adjudication, file copies of the order and Scheme with relevant authorities, and act on an authenticated copy of the order. The filing and issuance of the order were dispensed with, and the petition was disposed of accordingly.