2016 (7) TMI 786 - HC - Companies Law

Composite Scheme of Arrangement in the nature 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. The consequential reduction of Equity Share Capital of Saumya, the Transferee Company as set out in Clause 8 of the Scheme and paragraph 11 of the petition is hereby confirmed. However, since there is no net reduction of capital, minute under Sec. 103(1) is not necessary.

Summary

Issues:
1. Sanction of a Composite Scheme of Arrangement involving amalgamation, demerger, and restructuring under the Companies Act, 1956.

Analysis:
The judgment involves petitions filed by four companies seeking approval for a Composite Scheme of Arrangement, including the amalgamation of companies, demerger of business undertakings, and restructuring of share capital under sections 391 to 394 of the Companies Act, 1956. The companies belong to the same management group, aiming to streamline holding structures and achieve synergistic benefits through the proposed scheme. The petitions outline the anticipated advantages of the arrangement, emphasizing focused management and resource deployment in the real estate sector.

2. Dispensation of shareholder meetings and compliance with legal procedures.

The judgment notes the dispensation of shareholder meetings for various companies involved in the scheme based on written consents received, as per specific orders dated 6th May 2016. The absence of objections post-publication and compliance with legal advertisement requirements are highlighted. The court acknowledges the fulfillment of procedural formalities and the absence of dissenting voices regarding the proposed scheme.

3. Observations and compliance with accounting standards and regulatory requirements.

Detailed observations and submissions regarding accounting treatment, asset and liability disclosures, name change procedures, tax department communications, and registrar of companies' confirmations are addressed in the judgment. The court reviews each observation, ensuring compliance with Accounting Standards, Income Tax Act provisions, and other regulatory requirements. The petitioners provide explanations and undertakings to address each observation raised by the Regional Director, Ministry of Corporate Affairs.

4. Sanction of the Composite Scheme and consequential actions.

After considering all submissions, affidavits, and undertakings, the court sanctions the Composite Scheme of Arrangement, deeming it in the interest of shareholders, creditors, and public interest. The court confirms the reduction of Equity Share Capital as per the scheme's provisions. Specific prayers in the petitions are granted, costs are quantified, and directions are issued for compliance with stamp duty adjudication, filing with relevant authorities, and authentication procedures. The judgment concludes with directives for expeditious action by concerned authorities based on the sanctioned scheme.