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2016 (4) TMI 1017 - HC - Companies LawScheme of Arrangement in the nature of Amalgamation - Held that - This Court considers that the observations made by the Regional Director, Ministry of Corporate Affairs, have been redressed satisfactorily. It appears that the present Scheme of Arrangement is in the interest of the shareholders and creditors of all the companies as well as in the public interest, therefore, the same deserves to be sanctioned. The modification sought regarding the amendment of the Scheme with regard to clause 1.2, referring to the Appointed Date as 1st April 2016, is granted. The Modified Scheme, as placed on record at page 97, is hereby sanctioned. The prayers in terms of paragraph 16 (a) of the Company Petition No. 36 of 2016 and paragraph 16 (a) of the Company Petition No. 37 of 2016 are granted.The petitions are disposed of, accordingly. So far as the costs to be paid to the Central Govt. Standing Counsel is concerned, the same are quantified at ₹ 7,500/per petition. The same may be paid to Mr.Devang Vyas, learned Assistant Solicitor General of India. Cost of ₹ 7,500/be paid to the Office of the Official Liquidator, by the Transferor Company.
Issues:
Sanction of Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1956. Analysis: 1. The petitioner companies sought the sanction of a Scheme of Arrangement for the Amalgamation of two companies belonging to the same management group, involved in Real Estate Construction and Development activities. The purpose was to achieve synergic benefits through consolidation. The benefits of the Scheme were detailed in the petitions. 2. Meetings of Equity Shareholders and Creditors were dispensed with as written consent letters were provided, and no objections were raised. Public notices were advertised, and no objections were received even after publication. The Official Liquidator confirmed that affairs were not prejudicial and requested preservation of books and records for eight years post-Scheme sanction. 3. The Court addressed outstanding Service Tax dues and a logical modification to the proposed Appointed Date in response to observations made by the Official Liquidator's Chartered Accountant. The Board of Directors decided to change the Appointed Date to address concerns raised, and the modification was granted by the Court. 4. The Regional Director's observations were addressed through a Common Additional Affidavit, confirming compliance with the Income Tax Act and rules. No complaints were received against the companies, and no objections were raised against the Scheme. The Court found the Scheme to be in the interest of shareholders, creditors, and the public, sanctioning the Modified Scheme. 5. The Court granted the prayers in the Company Petitions and disposed of the matter, quantifying costs to be paid to the Central Government Standing Counsel and the Office of the Official Liquidator. The petitioner companies were directed to comply with stamp duty adjudication, lodge copies of the order and Scheme, and file with the Registrar of Companies. 6. Filing and issuance of the drawn-up order were dispensed with, and all concerned authorities were directed to act on the authenticated copy of the order. The Registrar was instructed to issue the authenticated copy of the order and Scheme promptly. This comprehensive analysis outlines the key aspects of the judgment regarding the sanctioning of the Scheme of Arrangement under the Companies Act, 1956, addressing various legal and procedural considerations and modifications required for the successful implementation of the Amalgamation.
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