2016 (12) TMI 1252 - HC - Companies Law

Scheme of Amalgamation - Held that - Having considered the Scheme of Amalgamation, together with relevant documents on record, the Court finds it appropriate to grant sanction to the proposed Scheme of Amalgamation. Thus the Scheme of Amalgamation is sanctioned. It is, however, directed that the petitioner Transferor Companies shall preserve their books of accounts, papers and records 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 Companies from statutory liability, if any.

Summary

Issues:
1. Sanction of Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956.
2. Dispensation of meetings of Equity Shareholders and Unsecured Creditors for Transferor and Transferee Companies.
3. Compliance with AS14 and Income Tax Act requirements.
4. Reports and requests from the Regional Director and Official Liquidator.
5. Preservation of books of accounts, papers, and records by Transferor Companies.
6. Statutory liabilities and costs determination.
7. Lodging of documents with concerned authorities.

Analysis:
1. The judgment pertains to petitions filed under Sections 391 to 394 of the Companies Act, 1956, seeking sanction for the Scheme of Amalgamation involving multiple companies. The Court granted dispensation of meetings of Equity Shareholders and Unsecured Creditors for the Transferor and Transferee Companies, based on individual applications filed by each company.

2. The Regional Director raised observations regarding compliance with AS14 and comments from the Income Tax Department. The petitioner companies assured compliance with AS14 requirements and undertook to adhere to Income Tax Act regulations. The Official Liquidator submitted reports confirming no prejudicial conduct by the Transferor Companies but requested preservation of records and compliance with statutory liabilities.

3. After considering submissions from counsels, reports from the Regional Director and Official Liquidator, and reviewing the Scheme of Amalgamation, the Court sanctioned the proposed scheme. The judgment emphasized the preservation of books and records by Transferor Companies and highlighted that the sanction does not absolve them from any statutory liabilities.

4. The judgment also addressed the determination of costs payable to the Assistant Solicitor General of India and the Official Liquidator. It directed the lodging of necessary documents with authorities for stamp duty adjudication and filing with the Registrar of Companies within a specified timeframe.

5. To streamline administrative procedures, the Court dispensed with the filing and issuance of drawn-up orders, allowing authorities to act based on authenticated copies of the judgment and Scheme. The Registrar was instructed to expedite the issuance of authenticated copies.

6. Overall, the petitions were disposed of with the necessary directions and observations, ensuring compliance with legal requirements and safeguarding the interests of all involved parties in the amalgamation process.