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2016 (5) TMI 663 - HC - Companies LawComposite Scheme of Arrangement of amalgamation - Held that - There does not appear to be any impediment to the grant of sanction to the Scheme of Arrangement, inasmuch as from the material on record and on a perusal of the Scheme, the Scheme appears to be fair and reasonable and is not violative of any provisions of law, nor is it contrary to public policy. The Arrangement under the proposed Scheme appears to be in the interest of the company and their members and creditors and, therefore, deserves to be sanctioned. Accordingly, the Scheme, as proposed by the Petitioner Company, is hereby sanctioned. 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 the sanctioning. The Petitioner Company shall pay towards professional charges to learned Assistant Solicitor General ₹ 7,500/. The Petitioner Company is further directed to lodge a copy of this order and the Scheme duly authenticated by the Registrar, High Court of Gujarat, with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty, if any, on the same within 60 days from the date of the order.
Issues:
1. Sanction of Composite Scheme of Arrangement under Companies Act, 1956 and 2013. 2. Compliance with FEMA and RBI guidelines. 3. Compliance with Income Tax Act and Rules. 4. Absence of objections to the Scheme of Arrangement. 5. Fairness and reasonableness of the Scheme. 6. Payment of professional charges and stamp duty. 7. Lodging and filing of necessary documents. 8. Disposal of the petition. Analysis: 1. The petition was filed for the sanction of a Composite Scheme of Arrangement under Sections 391 to 394 of the Companies Act, 1956, and corresponding provisions of the Companies Act, 2013. The Scheme aimed at varying the rights of existing shareholders to introduce a differential class of Equity Shares for future activities. The Court noted the mutual arrangement between the Company and its shareholders, emphasizing the need for financial revival and confidence-building measures, such as payments to the parent company. 2. The Regional Director raised concerns regarding compliance with FEMA, RBI guidelines, and the Income Tax Act. The Court acknowledged these observations, and the petitioner assured compliance with the mentioned regulations. The absence of objections to the Scheme post-advertisements and the Registrar of Companies' report of no complaints against the petitioner companies further supported the approval of the Scheme. 3. After addressing the Regional Director's observations and ensuring compliance with legal requirements, the Court found the Scheme fair, reasonable, and in the interest of the company, its members, and creditors. Consequently, the Court sanctioned the Scheme, clarifying that the approval does not absolve any party from liability. The petitioner was directed to pay professional charges, lodge the Scheme for stamp duty adjudication, and file necessary documents with relevant authorities within specified timelines. 4. The Court dispensed with the filing and issuance of a drawn-up order, directing all concerned authorities to act on the authenticated copy of the order promptly. The Registrar of the High Court was instructed to expedite the issuance of the authenticated order along with the Scheme. Finally, the petition was disposed of in accordance with the terms outlined in the judgment.
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