2016 (12) TMI 1562 - HC - Companies Law

Sanction of the Scheme of Amalgamation - Held that - On due consideration of the report of the Regional Director, Northern Region, Ministry of Corporate Affairs, New Delhi and the Official Liquidator, the Scheme of Amalgamation is hereby sanctioned and as a result thereof, all the assets and liabilities of the Transferor Company shall stand vested in the Transferee Company and the Transferor Company shall be dissolved without being wound up. The Scheme of Amalgamation shall be binding on both the Transferor and Transferee Company, their respective shareholders, creditors and all concerned. Let a formal order of sanction of the Scheme of Amalgamation be drawn in accordance with law and its certified copy be filed with the Registrar of Companies within 30 days from the date of receipt of the same.

Summary

Issues:
1. Scheme of Amalgamation under Sections 391-394 of the Companies Act, 1956 and Rule 9 of the Companies (Court) Rules, 1959.
2. Compliance with provisions of the Companies Act, 1956 and 2013.
3. Queries raised by the Regional Director, Ministry of Corporate Affairs.
4. Penalty imposed for non-maintenance of registered office.
5. Sanction of the Scheme of Amalgamation and its implications.

Analysis:
1. The petition sought sanction of the Scheme of Amalgamation under Sections 391-394 of the Companies Act, 1956 and Rule 9 of the Companies (Court) Rules, 1959. Both the Transferor and Transferee Companies' Board of Directors had approved the Scheme in meetings. Previous orders had dispensed with the requirement of shareholder and creditor meetings.

2. The Regional Director raised queries regarding non-compliance with provisions of the Companies Act, 1956 and 2013. The Official Liquidator reported no objection to the Scheme. The Transferee Company responded to queries regarding the appointment of a Company Secretary and maintenance of the registered office, ensuring compliance post-amalgamation.

3. The Regional Director's queries were addressed through affidavits filed by the Transferee Company directors. The penalty imposed for non-maintenance of the registered office was paid, subject to an ongoing appeal. No pending proceedings under Sections 235 to 251 of the Act were reported against the petitioner-Companies.

4. Despite the penalty imposed and paid, the explanations provided by the Company directors satisfied the Regional Director's queries. Considering all relevant facts, procedural requirements, and reports by the Regional Director and Official Liquidator, the Court sanctioned the Scheme of Amalgamation. Assets and liabilities of the Transferor Company would vest in the Transferee Company, leading to the dissolution of the Transferor Company.

5. The Scheme of Amalgamation was deemed binding on both companies, shareholders, creditors, and all concerned parties. A formal order of sanction was to be filed with the Registrar of Companies within 30 days. Public notices were to be published, and interested parties could seek further directions. The Transferee Company agreed to deposit a sum in the Common Pool Fund Account of the Official Liquidator, and the case was disposed of accordingly.