2016 (7) TMI 437 - HC - Companies Law

Scheme of Amalgamation is in the interest of its shareholders and creditors as well as in the public interest and the same deserves to be sanctioned and the same is hereby sanctioned.

Summary

Issues:
Petitions for sanction of Scheme of Amalgamation under sections 391 to 394 of the Companies Act, 1956.

Analysis:
1. Background and Rationale for Amalgamation: Two companies, engaged in similar commercial activities, sought amalgamation for synergic benefits to enhance operational growth. Details of benefits were provided in the petitions.

2. Approval Process: Meetings of Equity Shareholders and Creditors were dispensed with due to written consent letters approving the scheme. Both companies were profit-making with high net worth, ensuring no adverse impact on creditors' interests. Approval from Secured Lenders was obtained and recorded.

3. Publication and Objections: Petitions were admitted, and notices for hearings were published in newspapers. No objections were raised post-publication, confirmed by additional affidavit.

4. Official Liquidator's Report: Official Liquidator recommended dissolution of the Transferor Company without winding up. Directions were issued to preserve records and comply with statutory liabilities post-sanction.

5. Central Government's Observations: Central Government's Regional Director made observations, which were addressed in the Additional Affidavit. Issues related to capital, accounting treatment, Income Tax Department's objection, and Registrar of Companies' complaints were resolved.

6. Court's Decision: After considering all contentions, undertakings, and observations, the Court found the Scheme in the interest of shareholders, creditors, and the public. Sanction was granted, and directions were issued for stamp duty adjudication, filing with concerned authorities, and dispensing with drawn-up order issuance.

7. Costs and Compliance: Costs to Central Government Standing Counsel and Official Liquidator were quantified and directed to be paid by the Transferor Company. Directions were given for lodging the order, assets schedule, and Scheme for stamp duty adjudication and filing with relevant authorities within 60 days. Filing and issuance of drawn-up order were dispensed with for expeditious action by concerned authorities.