2017 (2) TMI 129 - HC - Companies Law

Scheme of amalgamation - Held that - In view of the approval accorded by the shareholders and creditors of the Petitioner Companies and the representation/affidavit filed by the Regional Director, and the report of the OL, raising no objections to the proposed Scheme; there appears to be no impediment to grant of sanction to the Scheme. Consequently, sanction is hereby granted to the Scheme the provisions of section 391 to 394 of the Act. 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 proposed 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 under Sections 391 and 394 of the Companies Act, 1956 seeking sanction for amalgamation of companies.

Analysis:
The petition was filed jointly by three companies seeking sanction for a scheme of arrangement for their amalgamation. Each company's details, including incorporation dates and share capital, were provided in the petition. The reasons for amalgamation included creating a larger entity with better resources, achieving economies of scale, increasing market share, and gaining access to additional customers. The share exchange ratio was also outlined in the petition.

The court had previously dispensed with the requirement of convening meetings of shareholders, secured creditors, and unsecured creditors of the petitioner companies. Notices were issued to relevant parties, and affidavits confirming service of notice and publication of citations were filed. The Official Liquidator and Regional Director did not raise objections to the proposed scheme, and no objections were received from any party. Based on the approvals received and reports submitted, the court found no impediment to granting sanction to the scheme under Sections 391 to 394 of the Act.

However, the court clarified that any deficiencies or violations found regarding enactments, rules, or regulations would not be exempted by the sanction granted. The order did not grant exemption from stamp duty, taxes, charges, permissions, or compliances required by law. The petitioner companies were directed to comply with all provisions of the scheme and statutory requirements. A certified copy of the order was to be filed with the Registrar of Companies, and the companies were directed to deposit a sum with the Delhi High Court Bar Association Lawyers' Social Security and Welfare Fund.

In conclusion, the petition seeking sanction for the amalgamation scheme was allowed, and the companies were directed to comply with the specified terms and requirements within the given timelines.