2016 (12) TMI 1563 - HC - Companies Law

Scheme of Amalgamation - Held that - On the consideration of all the relevant facts, the procedural requirements contemplated under Sections 391-394 of the Act, the relevant Rules and on due consideration of the report of the Regional Director, Northern, Ministry of Corporate Affairs, New Delhi, the Composite Scheme of Arrangement is hereby sanctioned and as a result thereof, the assets and liabilities relating to Amalgamating Company No.1 & 2 shall stand vested in the Amalgamated/De-merged company and the Amalgamating Company No.1 & 2 shall be dissolved without being wound up, the assets and liabilities relating to Demerged Undertaking i.e. Jim Corbett Undertaking of Amalgamated/Demerged Company shall stand vested in the Resulting Company No.1 and the assets and liabilities relating to Demerged Undertaking i.e. J.R. Recreation Undertaking of Amalgamated/Demerged Company shall stand vested in Resulting Company No.2. The Petitioner-Companies shall comply with all the applicable Accounting Standards upon sanctioning of the Scheme. The Scheme shall be binding on the Petitioner-Companies, their respective shareholders, creditors and all concerned. Let formal order of sanction of the Scheme 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.

Issues:
1. Petition filed under Section 391-394 of the Companies Act, 1956 seeking sanctioning of the Composite Scheme of Arrangement.
2. Merger of Amalgamating Companies into Amalgamated Company and demerger of specific undertakings into Resulting Companies.
3. Compliance with Accounting Standard-14.
4. Dissolution of Amalgamating Companies without winding up.
5. Binding nature of the Scheme on the companies, shareholders, and creditors.
6. Directions for formal order of sanction and publication of the order.
7. Voluntary deposit by Petitioner-Companies in the Common Pool Fund Account of the Official Liquidator.

Analysis:
1. The petition was filed under Sections 391-394 of the Companies Act, 1956, supported by affidavits of the involved companies, seeking sanction for the Composite Scheme of Arrangement (the Scheme). The Scheme involved the merger of Amalgamating Companies into Amalgamated Company and the demerger of specific undertakings into Resulting Companies.

2. The Scheme detailed the amalgamation and demerger process, specifying the transfer of assets and liabilities among the companies involved. The registered offices of the companies were located in Gurgaon, Haryana, with their main objects outlined in their respective Memorandum and Articles of Association.

3. The Regional Director, Ministry of Corporate Affairs, raised a concern regarding the applicability of Accounting Standard-14 by the Institute of Chartered Accountants of India. The Petitioner-Companies assured compliance with all applicable Accounting Standards upon the Scheme's sanctioning.

4. The Court, after due consideration of the facts, procedural requirements, and the report of the Regional Director, sanctioned the Scheme. The Amalgamating Companies were to be dissolved without winding up, with their assets and liabilities vested in the Amalgamated/De-merged company and Resulting Companies as per the Scheme.

5. The Scheme was declared binding on the Petitioner-Companies, their shareholders, creditors, and all concerned parties. Directions were given for the formal order of sanction, publication of the order in specified newspapers and gazettes, and the liberty for interested persons to seek legal directions.

6. The Petitioner-Companies agreed to voluntarily deposit a sum in the Common Pool Fund Account of the Official Liquidator, which was accepted by the Court. The matter was disposed of accordingly, with instructions for the formal order to be filed with the Registrar of Companies within a specified timeframe.

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