2010 (11) TMI 1137 - HC - Companies Law

Summary

Issues: Approval of Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956

Detailed Analysis:

1. Background of the Case:
The case involves a second motion under Sections 391 and 394 of the Companies Act, 1956, filed by a Transferor Company with a Transferee Company for the sanction of a scheme of amalgamation. The Transferor Company is a wholly owned subsidiary of the Transferee Company.

2. Meetings of Creditors:
Meetings of the secured and unsecured creditors of the Transferee Company were held as directed by the court. The Chairpersons appointed for these meetings submitted their reports. 17 unsecured creditors representing 99.5% of the total amount due and payable by the Transferee Company to unsecured creditors were present and voted in favor of the scheme. Six secured creditors representing approximately 4% of the amount due and payable to secured creditors also voted in favor of the scheme.

3. Response of Regional Director and Official Liquidator:
The Regional Director raised objections regarding the number of secured creditors present at the meeting. However, it was argued that the objections were incorrect as per the court's order specifying the coram requirement. The Official Liquidator did not receive any complaints against the proposed scheme and found no conduct prejudicial to the interest of members or public interest.

4. Decision and Approval of Scheme:
The court approved and sanctioned the proposed scheme of amalgamation. The Transferor Company will stand dissolved from the effective date, and no shares will be issued to its shareholders post-amalgamation. The order clarified that it does not grant exemption from payment of stamp duty, if applicable.

Conclusion:
The court allowed the petition, approving the scheme of amalgamation under Sections 391 and 394 of the Companies Act, 1956. The decision was based on the meetings of creditors, responses from the Regional Director and Official Liquidator, and the absence of objections detrimental to the stakeholders' interests.