2016 (12) TMI 1564 - HC - Companies Law

Scheme of amalgamation - Held that - As nothing prejudicial to the interest of creditors, members of both transferor companies and the transferee company or to public interest. All required procedures had been followed. Consequently, the company petition is allowed. This court does hereby sanction the amended scheme of amalgamation and does hereby declare the same to be binding on creditors and equity shareholders of transferor companies and the transferee company. The parties to the amalgamation or other persons interested shall be at liberty to apply to this court for any directions that may be necessary in regard to the working of the amalgamation.

Summary

Issues:
Petition under Sections 391-394 of the Companies Act, 1956 for sanction of amalgamation scheme.

Analysis:
The petition involved multiple issues related to the amalgamation of three companies: two transferor companies and one transferee company. The transferor companies, Fine Mining (Granite) Private Limited and Ridhi Sidhi Chem Private Limited, had their registered offices in Rajasthan, while the transferee company, Property Ventures (India) Private Limited, was initially registered in Maharashtra but later shifted its office to Rajasthan. The authorized and paid-up share capitals of each company were detailed in the petition along with the approval of the scheme of amalgamation by their respective Board of Directors.

The petition sought approval for the second motion of the scheme of amalgamation after dispensing with the meetings of shareholders and creditors. Notices were issued to relevant authorities, including the Regional Director and the Official Liquidator, with no objections raised against the scheme. An amended scheme rectifying a typographical error was allowed, and affidavits from the Regional Director and the Official Liquidator were submitted, confirming compliance with applicable provisions.

The Court's analysis focused on ensuring no violation of statutory rules or prejudice to public interest in sanctioning the amalgamation scheme. The Court considered the absence of objections from the Regional Director and the Official Liquidator, emphasizing that Income Tax clearance was not a direct requirement under the Companies Act, 1956. The Court found the scheme non-prejudicial to the interests of stakeholders and public interest, concluding that all necessary procedures had been followed.

As a result, the Court allowed the company petition, sanctioned the amended scheme of amalgamation, and declared it binding on creditors and equity shareholders of the involved companies. Parties were granted liberty to seek further directions, and the Registrar was instructed to issue the order in the prescribed form. The companies were directed to file a certified copy of the order with the Registrar within fourteen days, and specific amounts were allocated for the Official Liquidator's expenses and counsel costs. The company petition was allowed accordingly, ensuring the completion of the amalgamation process.