2016 (6) TMI 565 - HC - Companies Law

Scheme of Amalgamation - Held that - Having heard Mr. Navin K. Pahwa, learned Counsel for the petitioner company, Mr. Kshitij Amin, learned counsel for the Regional Director and upon perusal of the report of the Official Liquidator and the Regional Director, the reply affidavit filed on behalf of the petitioner company and having considered the Scheme of Amalgamation together with relevant documents on record, the Court finds it appropriate to grant sanction to the present Scheme of Amalgamation. In view of the above, the Scheme of Amalgamation is sanctioned. It is, however, directed that the petitioner shall preserve its books of accounts, papers and record and shall not to dispose of the records without the prior permission of the Central Government under Section 396A of the Companies Act, 1956.

Summary

Issues:
1. Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956.
2. Dispensation of meetings of Equity Shareholders and Unsecured Creditors.
3. Compliance with Accounting Standard 14 and Income Tax Act.
4. Preservation of books of accounts and records.

Analysis:
1. The petition was filed seeking sanction of the Scheme of Amalgamation of two companies. The transferee company had previously sought dispensation of separate proceedings, which was allowed by the Court. Subsequently, the petitioner sought dispensation of meetings of Equity Shareholders and Unsecured Creditors, which was also granted by the Court.

2. The Court admitted the petition and directed the publication of notice to the Regional Director and the Official Liquidator. The notice was duly published in local newspapers, and no objections were received after publication. The Regional Director raised concerns regarding Accounting Treatment and compliance with the Income Tax Act.

3. The petitioner responded to the Regional Director's observations, explaining compliance with Accounting Standard 14 and the Income Tax Act. The Court found it appropriate to grant sanction to the Scheme of Amalgamation after considering all relevant documents and reports from the Official Liquidator and the Regional Director.

4. The Official Liquidator confirmed that the affairs of the transferor company were not conducted prejudicially. The Court directed the petitioner to preserve its books of accounts and records, not to dispose of them without prior permission, and sanctioned the Scheme of Amalgamation. The petitioner was instructed to comply with stamp duty adjudication and filing requirements within a specified timeframe.