2017 (2) TMI 4 - HC - Companies Law

Scheme of Amalgamation - Held that - Considering the approval accorded by the shareholders and creditors of the petitioner companies to the proposed Scheme of Amalgamation and the affidavits filed by the Official Liquidator and the Regional Director, Northern Region, not raising any objection to the proposed Scheme of Amalgamation, there appears to be no impediment to the grant of sanction to the Scheme of Amalgamation. Consequently, sanction is hereby granted to the Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956. The petitioner companies will comply with the statutory requirements in accordance with law. Certified copy of this order be filed with the Registrar of Companies within 30 days. It is also clarified that this order will not be construed as an order granting exemption from payment of stamp duty as payable in accordance with law. Upon the sanction becoming effective from the appointed date of amalgamation, i.e. 1st April, 2015, the transferor company shall stand dissolved without undergoing the process of winding up.

Summary

Issues:
1. Scheme of Amalgamation under Sections 391 & 394 of the Companies Act, 1956.
2. Share exchange ratio determination.
3. Approval of the Scheme by the Board of Directors.
4. Compliance with statutory requirements.
5. Official Liquidator and Regional Director reports.
6. Objections, if any, to the Scheme of Amalgamation.
7. Grant of sanction to the Scheme of Amalgamation.
8. Dissolution of the transferor company.

Analysis:

1. The judgment pertains to a joint petition filed under Sections 391 & 394 of the Companies Act, 1956 for the sanction of the Scheme of Amalgamation between two companies, the transferor company and the transferee company. The registered offices of both companies are located in New Delhi.

2. The share exchange ratio for the amalgamation is determined, where the transferee company will issue shares to the shareholders of the transferor company in a specified ratio for equity shares and non-cumulative redeemable preference shares.

3. The approval of the proposed Scheme of Amalgamation by the Board of Directors of both the transferor and transferee companies is highlighted, emphasizing the unanimous approval received during separate board meetings.

4. The petitioners had previously sought directions to dispense with the requirement of convening meetings of shareholders and creditors, which was allowed by the court. Subsequently, the present petition seeks the sanction of the Scheme of Amalgamation, with compliance to statutory requirements.

5. Reports from the Official Liquidator and Regional Directors, Ministry of Corporate Affairs, were submitted, indicating no objections to the proposed Scheme of Amalgamation. The Official Liquidator's report specifically mentioned the absence of complaints against the scheme.

6. No objections were received from any party regarding the Scheme of Amalgamation, as confirmed in the affidavits filed by the authorized signatories of the petitioner companies.

7. Based on the approvals received from shareholders, creditors, and the reports of the Official Liquidator and Regional Directors, the court granted sanction to the Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956.

8. Following the sanction, the transferor company is directed to stand dissolved without undergoing the winding-up process, effective from the appointed date of amalgamation. Additionally, costs of &8377; 50,000 were ordered to be paid by the petitioners to the Official Liquidator.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the court's decision regarding the Scheme of Amalgamation between the two companies.