2017 (1) TMI 191 - HC - Companies Law

Scheme of amalgamation - Held that - Considering the approval accorded by the members and creditors of the Petitioners to the proposed Scheme; the circumstance that the objections raised by the affidavit filed by the Regional Director, Northern Region, Ministry of Corporate Affairs stand satisfied; the report of the Official Liquidator attached to this High Court, whereby no objections have been raised to the proposed Scheme, there appears to be no impediment to the grant of sanction to the Scheme. Consequently, sanction is hereby granted to the Scheme under sections 391 to 394 of the Companies Act, 1956. The Petitioners will however, comply with the statutory requirements in accordance with law. A certified copy of the order, sanctioning the scheme, be filed with the ROC, within thirty (30) days of its receipt. Resultantly, it is hereby directed that the petitioners will comply with all provisions of the scheme and, in particular, those which are referred to hereinabove.

Issues: Approval of Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956

Detailed Analysis:

1. Jurisdiction and Background of Petitioners: The petition was filed jointly by the Transferor Company and the Transferee Company for the approval of the Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956. Both companies are located in the National Capital Territory of Delhi, giving the court jurisdiction over the matter.

2. Company Details and Share Capital: The Transferor Company and the Transferee Company provided details of their incorporation, share capital, and operations. The Transferor Company was incorporated in 2006, while the Transferee Company was incorporated in 2010. The share capital structures of both companies were outlined in the petition.

3. Approval Process and Board Resolutions: The Scheme of Amalgamation was approved by the Board of Directors of both companies. The necessary resolutions were passed on 22.12.2014, and relevant documents such as Memorandum of Association, Articles of Association, and financial statements were submitted as part of the application.

4. Benefits of Amalgamation: The petition highlighted various benefits of the proposed amalgamation, including consolidation of business, reduction of overheads, operational efficiency, increased shareholder value, and better access to financing for future projects. The Scheme aimed to optimize resources, enhance shareholder value, and improve operational synergies.

5. Legal Compliance and Official Reports: The Official Liquidator and the Regional Director of the Ministry of Corporate Affairs submitted reports supporting the Scheme. The Official Liquidator confirmed no objections to the Scheme and stated that the affairs of the Transferor Company were not conducted in a prejudicial manner. The Regional Director raised minor compliance issues related to leasehold lands, which were addressed by the Petitioners.

6. Grant of Sanction and Dissolution: Considering the approval from members and creditors, satisfaction of objections raised, and no further objections received, the court granted sanction to the Scheme under Sections 391 to 394 of the Companies Act, 1956. The Transferor Company was directed to stand dissolved without being wound up.

7. Compliance and Legal Obligations: The Petitioners were instructed to comply with all provisions of the Scheme, statutory requirements, and any deficiencies found in accordance with the law. The order did not exempt the parties from payment of stamp duty, taxes, or other charges as per legal provisions.

8. Costs and Disposal of Petition: The Petitioners were required to deposit a specified sum as costs within a designated timeframe. The petition was allowed in the specified terms and disposed of accordingly, ensuring adherence to legal procedures and obligations.

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