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2017 (1) TMI 905 - HC - Companies LawScheme of Arrangement and Amalgamation - Held that - After perusing the entire material placed on record, sanction is hereby granted to the proposed scheme, subject to following conditions i. That the necessary consent, approval and/or permission is obtained by the Demerged/Transferor Company from the RBI, in terms of Clause 35.1 (a) of the proposed scheme; ii. That the Petitioner/Transferee No.1 Company comply with the FDI norms with respect to the proposed integration of Transferee No.2 Company into the foreign Company, Dassault Systems; iii. That sanction is accorded by the Court of competent jurisdiction to the proposed scheme, in respect of the Demerged/Transferor Company and the Transferee No.2 Company.; and iv. That the Petitioner/Transferee No.1 Company comply with all the statutory requirements with respect to the relief sought in the present petition, in accordance with law. The sanction to the proposed scheme will be effective from the appointed date of the proposed scheme i.e. 31.03.2016.
Issues:
Petition under Sections 391 to 394 of the Companies Act, 1956 for sanction to a proposed scheme of Arrangement and Amalgamation involving three companies. Analysis: 1. Jurisdiction: The Petitioner/Transferee No.1 Company filed a petition under Sections 391 to 394 of the Companies Act, 1956 seeking sanction for a proposed scheme of Arrangement and Amalgamation involving itself, the Demerged/Transferor Company, and the Transferee No.2 Company. The registered offices of the companies were in different locations, with the Petitioner in New Delhi and the other two in Mumbai. Separate petitions were filed by the other companies in the High Court of Judicature at Bombay due to their territorial jurisdiction. 2. Company Background: The Petitioner/Transferee No.1 Company was originally incorporated in 1991 and had undergone name changes over the years. Details of its authorized share capital and issued share capital were provided in the petition. 3. Scheme Details: The proposed scheme involved the demerger of the Demerged Business Undertaking of the Demerged/Transferor Company into the Petitioner/Transferee No.1 Company and the amalgamation of the remaining undertaking with the Transferee No.2 Company. The scheme aimed to enhance market presence and offer a wider range of services to customers. 4. Share Exchange Ratio: The proposed scheme outlined the share exchange ratios for the shareholders of the Demerged/Transferor Company in both the Petitioner/Transferee No.1 Company and the Transferee No.2 Company. 5. Compliance and Approval: The petition affirmed that there were no pending proceedings against the Petitioner/Transferee No.1 Company under relevant sections of the Act. The Board of Directors of both the Petitioner and the Demerged/Transferor Company had approved the proposed scheme in separate meetings. 6. Approval Process: The Court had previously allowed the dispensation of secured creditors' meetings and directed the convening of meetings for equity shareholders and unsecured creditors, which had approved the scheme. The Chairpersons of these meetings confirmed the approvals in their reports. 7. Sanction and Conditions: After considering the approvals and the Regional Director's affidavit, the Court granted sanction to the proposed scheme subject to specific conditions. These included obtaining necessary approvals, compliance with FDI norms, and meeting all statutory requirements. 8. Effective Date and Compliance: The sanction to the proposed scheme was deemed effective from the appointed date, with a clear directive that any deficiencies or violations would not impede legal actions against responsible parties. The order did not exempt the parties from statutory obligations or charges. 9. Miscellaneous: The order mandated the filing of a certified copy with the Registrar of Companies, a deposit for costs, and clarified that it was not an exemption from legal obligations. This detailed analysis covers the various aspects of the judgment, including jurisdiction, company details, scheme specifics, compliance, approval process, conditions for sanction, and post-sanction directives.
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