2017 (1) TMI 906 - HC - Companies Law

Scheme of Amalgamation - Held that - In view of the foregoing and upon considering the approval accorded by the members and creditors of the Petitioner/Amalgamating Company and the Amalgamated Company to the proposed scheme; the report filed by the Official Liquidator having not raised any objection to the proposed scheme; and in view of the circumstance that the objections raised by the Regional Director in its affidavit stand satisfied, there appears to be no impediment to the grant of sanction to the proposed scheme. Consequently, sanction is hereby granted to the proposed scheme. The Petitioner/Amalgamating Company will comply with all the statutory requirements, in accordance with law. Upon the sanction becoming effective from the appointed date of the proposed scheme i.e. 1st April, 2015, the Petitioner/Amalgamating Company shall stand dissolved without undergoing the process of winding up. A certified copy of the order, sanctioning the proposed scheme, be filed with the ROC, within thirty (30) days of its receipt.

Summary

Issues:
1. Petition filed under Sections 391 to 394 of the Companies Act, 1956 seeking sanction to the proposed scheme of Amalgamation.
2. Share capital details and incorporation history of the Petitioner/Amalgamating Company and the Amalgamated Company.
3. Benefits of the proposed amalgamation.
4. Share exchange ratio and pending proceedings against the companies.
5. Approval of the proposed scheme by the Board of Directors and dispensation of certain requirements.
6. Regional Director's objections and responses from the Amalgamated Company.
7. Official Liquidator's report and absence of objections from interested parties.
8. Grant of sanction to the proposed scheme and compliance with statutory requirements.
9. Filing of the order with the Registrar of Companies and consequences of deficiencies or violations.
10. Costs to be paid by the Petitioner/Amalgamating Company.

Analysis:

1. The petition was filed under Sections 391 to 394 of the Companies Act, 1956, by the Petitioner/Amalgamating Company seeking approval for the proposed scheme of Amalgamation with the Amalgamated Company. Both companies are based in New Delhi.

2. Details regarding the share capital and incorporation history of both companies were provided. The Petitioner/Amalgamating Company and the Amalgamated Company had specific authorized and issued share capital structures.

3. The proposed amalgamation aimed at consolidating businesses, pooling resources for optimal utilization, and creating value for stakeholders of both companies. The benefits included enhanced cash flows, operational efficiencies, and asset base consolidation.

4. The share exchange ratio specified no consideration payable by the Amalgamated Company for the equity shares of the Petitioner/Amalgamating Company due to the latter being a wholly owned subsidiary. No pending proceedings under specified sections of the Act were reported.

5. Approval for the scheme was obtained from the respective Board of Directors, and certain requirements were dispensed with through previous court orders. Meetings of shareholders and creditors were waived off based on these approvals.

6. Objections raised by the Regional Director regarding pending disputed liabilities were addressed by the Amalgamated Company's undertaking to continue proceedings post-amalgamation.

7. The Official Liquidator's report confirmed no complaints against the proposed scheme and no prejudicial conduct by the Petitioner/Amalgamating Company. No objections were received from any other party.

8. Sanction was granted to the proposed scheme considering approvals from members and creditors, lack of objections, and satisfaction of raised concerns. Compliance with statutory requirements was mandated upon sanction.

9. The order sanctioning the scheme was to be filed with the Registrar of Companies within a specified period. Any deficiencies or violations could lead to actions against relevant persons.

10. The Petitioner/Amalgamating Company agreed to pay costs, and the petition was allowed and disposed of accordingly, with the costs to be deposited within a stipulated timeframe.