2016 (12) TMI 1303 - HC - Companies Law

Scheme of Amalgamation is sanctioned subject to the order that in Clause 13.4 of the Scheme, the words .and change in the object clause shall stand deleted. It is further directed that the petitioner Transferor Companies shall preserve their books of accounts, papers and record and shall not to 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.

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 Creditors for various Transferor Companies.
3. Compliance with AS14, errors in the Scheme, approvals for business, and Income Tax Department comments.
4. Reports from the Official Liquidator regarding the affairs of Transferor Companies.
5. Granting sanction to the Scheme of Amalgamation with specific directions.
6. Determination of costs, preservation of records, and compliance with stamp duty adjudication and filing requirements.

Issue 1 - Sanction of Scheme of Amalgamation:
The petitions sought the High Court's sanction for the Scheme of Amalgamation involving multiple companies. The Court admitted the petitions and directed notices to be issued to the Regional Director and Official Liquidator. The petitions were published in local newspapers, and the Court granted sanction to the Scheme after considering relevant documents and reports, subject to specific directions.

Issue 2 - Dispensation of Meetings:
Various Transferor Companies filed applications seeking dispensation of meetings of Equity Shareholders and Creditors, which were granted by the Court based on the absence of Secured Creditors and specific orders for each company.

Issue 3 - Compliance and Observations:
The Regional Director raised observations regarding compliance with AS14, errors in the Scheme, approvals for business activities, and Income Tax Department comments. The Transferee Company responded to each observation, ensuring compliance and providing explanations, leading to the Court finding it appropriate to grant sanction to the Scheme with specific deletions and directions.

Issue 4 - Reports from Official Liquidator:
The Official Liquidator submitted reports confirming that the affairs of Transferor Companies were not prejudicial and requested directions for preserving records and statutory compliance, which the Court considered while granting sanction to the Scheme.

Issue 5 - Granting Sanction and Specific Directions:
The Court sanctioned the Scheme of Amalgamation with specific directions, including deletion of certain clauses, preservation of records, and not absolving Transferor Companies from statutory liabilities, emphasizing compliance and preservation of records.

Issue 6 - Costs, Preservation, and Compliance Requirements:
The Court determined costs payable to relevant parties, directed preservation of records, adjudication of stamp duty within a specified timeframe, and instructed filing copies of the order and Scheme with the Registrar of Companies electronically and physically, dispensing with the need for a drawn-up order.

This comprehensive judgment by the Gujarat High Court addressed various legal aspects related to the Scheme of Amalgamation, dispensation of meetings, compliance with regulatory requirements, reports from the Official Liquidator, and specific directions for the parties involved, ensuring proper preservation of records and compliance with statutory obligations.

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