2017 (1) TMI 865 - HC - Companies Law

Scheme of amalgamation - Held that - The proposed scheme filed along with the company petitions as also the affidavits placed on record. As find that the Scheme as proposed is not prejudicial to the interest of any person or entity, which has a stake/interest in the petitioner companies. The said scheme, as framed, is not violative of any statutory provisions. The scheme as formulated is fair, just, sound and is not contrary to any public policy or public interest. No proceedings appear to be pending under the provisions of Sections 231 to 237 of the Companies Act, 1956. All the statutory provisions appear to have been complied with. Consequently, there shall be an order approving the scheme of amalgamation of Lancor Guduvanchery Developments Limited (1st transferor company), Lancor Sriperumbudur Developments Limited (2nd transferor company) and Lancor Holdings Limited (transferee company), with effect from 01.04.2015, as per the procedure laid down under Sections 391 to 394 of the Companies Act. Taking note of the report of the Chartered Accountant as enclosed by the Official Liquidator, in terms of the order passed by this Court, both the transferor companies shall stand dissolved, albeit, without winding up. It is made clear, that this order will not be construed as an order granting exemption from payment of stamp duty or, taxes or, any other charges, if any, 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:
1. Scheme of amalgamation under Sections 391 to 394 of the Companies Act, 1956 involving three companies.
2. Compliance with prescribed procedure by the petitioners and the respondent.
3. Approval and consent of secured and unsecured creditors of the transferor companies.
4. Financial details and net worth of the transferor companies.
5. Consent of equity shareholders and dispensation of shareholder meetings.
6. No objection certificate from the Bombay Stock Exchange Limited.
7. Reports from the Regional Director, Ministry of Company Affairs, and Official Liquidator.
8. Approval of the proposed scheme by the court.

Analysis:
1. The petitions were filed seeking sanction for a scheme of amalgamation involving three companies under Sections 391 to 394 of the Companies Act, 1956. The scheme was found appended to the petitions, and the transferor and transferee companies were identified.

2. The compliance with the prescribed procedure was noted, including resolutions passed by the Board of Directors of the companies approving the scheme. The petitioners and respondent were found to have followed the necessary steps.

3. Details of secured and unsecured creditors of the transferor companies were provided, along with certificates confirming their consent to the proposed scheme. Specific information regarding the creditors, their percentages, and their consent was outlined.

4. Financial aspects such as net worth, assets, liabilities, and cash balances of the transferor companies were disclosed. The court reviewed these details to assess the financial standing of the companies involved.

5. Consent of equity shareholders was obtained, and shareholder meetings were dispensed with based on their approval. Affidavits confirming shareholder consent were submitted along with the petitions.

6. The Bombay Stock Exchange Limited issued a no objection certificate to the proposed scheme, indicating compliance with stock exchange regulations.

7. Reports from the Regional Director, Ministry of Company Affairs, and the Official Liquidator were considered, stating no objections to the scheme and confirming proper conduct of the companies' affairs.

8. After reviewing the scheme, affidavits, and reports, the court found the proposed scheme fair, just, and compliant with statutory provisions. The scheme was deemed not prejudicial and was approved for amalgamation.

This comprehensive analysis covers the various aspects of the judgment, detailing the key issues addressed by the court in the amalgamation process of the three companies under the Companies Act, 1956.