2017 (1) TMI 830 - HC - Companies Law

Scheme of Amalgamation - Held that - Considering the approval accorded by the shareholders and creditors of the Petitioner Companies to the Scheme; and the report and affidavit filed by the Official Liquidator and the Regional Director, Northern Region, respectively, not raising any objection to the Scheme, there appears to be no impediment to the grant of sanction to the Scheme. Consequently, sanction is hereby granted to the Scheme. The Petitioner Companies will comply with the statutory requirements in accordance with law. Upon the sanction becoming effective from the appointed date of Scheme, i.e. 1st April, 2015 the Transferor Company shall stand dissolved without undergoing the process of winding up. Notwithstanding the above, if there is any deficiency found or violation committed, qua any enactment, statutory rule or regulation, the sanction granted by this Court to the Scheme will not come in the way of action being taken, albeit, in accordance with law, against the concerned persons, directors and officials of the Petitioner Companies. It is made clear, that this order shall not be construed as an order granting exemption, inter alia, from, payment of stamp duty or, taxes or, any other charges, if, payable, as per the relevant provisions of law or, from any applicable permissions that may have to be obtained or, even compliances that may have to be made, as per the mandate of law.

Summary

Issues:
Petition filed for approval of Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956.

Analysis:
1. The petition was jointly filed by two companies, referred to as the Transferor Company and the Transferee Company, seeking approval for the Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956. The companies were collectively referred to as the Petitioner Companies.

2. Both the Transferor Company and the Transferee Company had their registered offices in New Delhi. The Transferor Company was incorporated in 1983, while the Transferee Company was incorporated in 2002 under the Companies Act, 1956.

3. Details regarding the authorized share capital and the issued, subscribed, and paid-up share capital of both companies were provided in the petition, along with copies of the Memorandum of Association, Articles of Association, audited financial statements, and balance sheets.

4. The Scheme of Amalgamation aimed at pooling financial, commercial, and other resources, enhancing capabilities, and combining activities of both companies for mutual benefit, shareholders, creditors, and all concerned parties.

5. It was mentioned that the Transferor Company's 100% share capital was held by the Transferee Company, and upon the Scheme becoming effective, the Transferor Company's shares would be automatically cancelled without any new issue or allotment by the Transferee Company.

6. The Scheme had been approved by the respective Board of Directors of both companies in meetings held on 15.01.2016, and the requirement for convening separate meetings of equity shareholders and creditors had been dispensed with earlier by the Court.

7. Reports from the Official Liquidator and the Regional Director, Northern Region, were filed, stating no objections to the Scheme, ensuring compliance with legal requirements. The Official Liquidator confirmed no complaints received against the Scheme.

8. Considering the approvals received and the absence of objections, the Court granted sanction to the Scheme, with a directive for the Petitioner Companies to comply with statutory requirements. The Transferor Company would stand dissolved without winding up upon the Scheme becoming effective.

9. The Court clarified that any deficiencies or violations found later would not be exempted by the sanction granted, and action could be taken against responsible persons in accordance with the law.

10. The order did not grant exemptions from stamp duty, taxes, charges, permissions, or compliances as per relevant laws. The certified copy of the order was to be filed with the Registrar of Companies within 30 days.

11. The Court ordered the Petitioner Companies to deposit a sum of ?50,000 as costs within two weeks, which was accepted by both parties. The petition was allowed in the stated terms and disposed of accordingly.