2016 (8) TMI 1605 - HC - Companies Law

Sanction of Scheme of Amalgamation and Arrangement - HELD THAT - From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy. None of the parties concerned has come forward to oppose the Scheme. Since all the requisite statutory compliances have been fulfilled, Company Scheme Petition No. 148 of 2016 and 150 of 2016 filed by Eaton Industries Private Limited and Eaton Technologies Private Limited are made absolute - Application allowed.

Summary

Issues:
Approval of modified Scheme of Amalgamation and Arrangement between companies.

Analysis:
The judgment involves the approval of a modified Scheme of Amalgamation and Arrangement between three companies. The Transferor Company is engaged in design engineering services, while the Transferee Company provides engineering design development and other services. The rationale behind the Scheme is to integrate businesses acquired in a previous acquisition, streamline operations, and achieve operational synergies. The amalgamation aims to consolidate operations, reduce administrative costs, and enhance operational efficiency. The Scheme has been approved by necessary board resolutions and complies with statutory requirements under the Companies Act, 1956 and Companies Act 2013.

The Regional Director has filed an Affidavit stating that the Scheme is not prejudicial to shareholders or the public, subject to compliance with certain regulations. The Scheme involves buy-back of shares, insertion of new object clauses, and tax implications. The Petitioners have made necessary modifications to address the concerns raised by the Regional Director, which have been approved by all shareholders. The modifications include deletion of buy-back provisions, exclusion of one Transferor Company, and adjustment of asset valuation methods as per accounting standards.

The Official Liquidator has submitted a report stating that the affairs of the Transferor Companies have been conducted properly, and dissolution of one Transferor Company is recommended. The Court finds the Scheme fair, reasonable, compliant with the law, and not contrary to public policy. No objections have been raised by any party involved. Consequently, the Court approves the modified Scheme and makes it absolute for the concerned companies.

The judgment directs the Transferee Company to complete stamp duty adjudication and file necessary documents with the Registrar of Companies within specified timelines. The Petitioner Companies are ordered to pay costs to the Regional Director and Official Liquidator. The filing and issuance of the drawn-up order are dispensed with, and all authorities are instructed to act based on the authenticated copy of the order and the modified Scheme.