2016 (12) TMI 1019 - HC - Companies Law

Scheme of Amalgamation is in the interest of its shareholders and creditors as well as in the public interest. The same deserves to be sanctioned. Accordingly, the Scheme is hereby sanctioned. The attention of the Court is drawn to the fact that the other six Transferor Companies have filed similar Petitions in the Bombay High Court and that the Transferee Company has filed a Petition at Madras High Court seeking sanction of the Scheme. Therefore, the Scheme is sanctioned subject to it being sanctioned by the High Courts of Bombay and Madras.

Summary

Issues:
1. Scheme of Amalgamation under Sec. 391 to 394 of the Companies Act, 1956.
2. Dispensation of meetings of various stakeholders.
3. Observations and reports by the Official Liquidator and Central Government.
4. Compliance with applicable provisions and objections.
5. Sanction of the Scheme of Amalgamation by the High Court.

Scheme of Amalgamation:
The judgment pertains to a Scheme of Amalgamation proposed for several companies under Sec. 391 to 394 of the Companies Act, 1956. The scheme aims to amalgamate multiple companies engaged in various activities to streamline shareholding, remove inefficiencies, reduce regulatory compliances, and create value for shareholders. The petitions detail the benefits expected from the proposed Scheme.

Dispensation of Meetings:
Two separate companies filed applications seeking dispensation of meetings of various stakeholders, which were allowed by the Court. No objections were raised after due publication, and the meetings were dispensed with. The Court directed the preservation of books of accounts and records until further permissions are obtained.

Observations and Reports:
The Official Liquidator's reports confirmed that the companies conducted their affairs within legal boundaries and were not prejudicial to members or public interest. However, directions were issued to preserve records and comply with statutory liabilities. The Central Government's observations were also considered, and all issues raised were satisfactorily addressed.

Compliance and Sanction:
After reviewing submissions and undertakings, the Court found the Scheme to be in the interest of shareholders, creditors, and the public. Consequently, the Scheme was sanctioned, subject to approval by other High Courts where related petitions were filed. The prayers in the petitions were granted, and costs were quantified to be paid to the Central Government Standing Counsel and the Office of the Official Liquidator.

Final Directions:
The Petitioner Companies were directed to lodge necessary documents for stamp duty adjudication, file copies of the order and Scheme with relevant authorities, and act on the authenticated copy of the order promptly. The filing and issuance of the drawn-up order were dispensed with for efficiency.

This comprehensive analysis covers the Scheme of Amalgamation, dispensation of meetings, observations and reports by the Official Liquidator and Central Government, compliance with legal provisions, sanction of the Scheme by the High Court, and final directions issued in the judgment.