2009 (11) TMI 510 - HC - Companies Law

Whether on account of merger of a company, the transferee company is required to pay registration fee due to consequential increase of authorised share capital of the transferee company ? Held that - Appeal dismissed as in the case of such merger no such payment of fee to the Registrar of Companies or stamp duty to the State Government shall be payable. See Cavin Plastics case 2007 (11) TMI 412 - HIGH COURT OF MADRAS

Summary

Issues:
Whether the transferee company is required to pay registration fee due to an increase in authorized share capital after the merger of a company.

Analysis:
The judgment in question revolves around the issue of whether a transferee company is obligated to pay registration fees following an increase in authorized share capital due to the merger of a company. The case involved a respondent company incorporated under the Companies Act, 1956, which merged with another company, leading to an increase in authorized share capital. The appellant contended that the transferee company should pay registration fees due to this increase. However, the learned company judge rejected this argument, stating that there was no obligation for the amalgamated companies to pay additional fees on the same authorized capital already paid for. The appellant challenged this decision, citing Schedule X, clause 3 of the Companies Act and a Supreme Court judgment.

In response, the respondent's counsel argued that the Supreme Court judgment cited by the appellant was not directly applicable to the case at hand, as it did not consider the specific scenario of merger and Schedule X(3) of the Companies Act. Additionally, the respondent referred to a Madras High Court judgment that supported the position that no additional fee should be paid post-merger. The High Court, after comparing the facts of the case with the Madras High Court judgment, concluded that the question raised in the appeal was already addressed by the Madras High Court. Therefore, the appeal was dismissed based on the precedent set by the Madras High Court decision.

In conclusion, the judgment clarifies that a transferee company is not required to pay additional registration fees following a merger that results in an increase in authorized share capital. The decision was based on the interpretation of relevant provisions of the Companies Act and supported by a precedent set by the Madras High Court.