2016 (10) TMI 150 - HC - Companies Law

Scheme of Amalgamation - Held that - Having heard Mr. Navin K. Pahwa, learned Counsel for the petitioner companies, Mr. Kshitij Amin for Mr. Devang Vyas, Learned Assistant Solicitor General of India for the Regional Director and upon perusal of the reports of the Official Liquidator and the Regional Director, the affidavit filed by the petitioner transferee company in response to the report of Regional Director 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 transferor company shall preserve its books of accounts, papers and record and shall not dispose of the records without the prior permission of the Central Government under Section 396 A of the Companies Act, 1956. It is further observed that the sanction of this Scheme shall not absolve the Transferor Company from any statutory liability, if any.

Summary

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

Analysis:
The Transferee Company sought dispensation of the Equity Shareholders meeting, which was granted by the Court. The meeting of creditors was also deemed unnecessary. The Transferor Company similarly sought dispensation of meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors, which was approved. Subsequently, the petitioners filed for sanction of the Amalgamation Scheme through Company Petitions. The Court admitted the petitions, directed notice issuance to relevant authorities, and publication in local dailies. The Regional Director raised concerns regarding contingent liabilities and Income Tax compliance, to which the Transferee Company responded, justifying the position on contingent liabilities and committing to Income Tax Act compliance.

The Official Liquidator confirmed no prejudicial conduct in the Transferor Company's affairs and requested preservation of records and compliance with statutory liabilities. After hearing all parties, including Counsel for petitioner companies, Assistant Solicitor General, and reviewing reports, the Court sanctioned the Amalgamation Scheme. The Transferor Company was directed to preserve records and not absolved from statutory liabilities. Costs were imposed on the petitioners, payable to the Assistant Solicitor General and the Official Liquidator. The petitioners were instructed to lodge necessary documents for stamp duty adjudication and file the order with the Registrar of Companies. The drawn-up order was dispensed with, and authorities were directed to act on an authenticated copy promptly.

In conclusion, the Court granted sanction to the Scheme of Amalgamation, with specific directives for the Transferor Company regarding record preservation and statutory liabilities. Costs were determined, procedural requirements outlined, and the need for timely compliance emphasized. The petitions were disposed of accordingly.