2012 (12) TMI 801 - HC - Companies Law

Scheme of Amalgamation - Held that - The requirement of convening meetings of Shareholders & un-secured creditors in view of the written consents/NOC given by all the Shareholders of the Transferor Company and the Transferee Company are dispensed with - Report of Official Liquidator stating that he has not received any complaint against the proposed Scheme from any person/party interested in the Scheme in any manner and that the affairs of the Transferor Company do not appear to have been conducted in a manner prejudicial to the interest of its members, creditors or to public interest. Application for compounding of the contravention of provisions of FEMA forwarded and the Compounding Authority of the Reserve Bank of India was pleased to compound the contraventions in accordance with the Foreign Exchange (Compounding Proceeding) Rules 2000. No objection has been received to the Scheme of Amalgamation from any other party there appears to be no impediment to the grant of sanction to the Scheme of Amalgamation - The petitioner companies will comply with the statutory requirements in accordance with law with filing certified copy of the formal order with the ROC within 30 days - the whole or part of the undertaking, the property, rights and powers with all the liabilities and duties of the Transferor Company be transferred to and vest in the Transferee Company without any further act or deed - this order will not be construed as an order granting exemption from payment of stamp duty or any other charges - Petitioner Companies would voluntarily deposit a sum of Rs. 1 Lac in the Common Pool fund of the Official Liquidator within three weeks from today.

Summary

Issues:
Petition under sections 391(2) & 394 of the Companies Act, 1956 for Scheme of Amalgamation.

Analysis:
The petition filed under sections 391(2) & 394 of the Companies Act, 1956 sought the sanction of the Scheme of Amalgamation between a Transferor Company and a Transferee Company. The registered offices of both companies were located in New Delhi. Details regarding the incorporation dates, capital structure, and financial accounts of the companies were provided in the petition. Resolutions approving the Scheme of Amalgamation were passed by the Board of Directors of both companies. The Share Exchange ratio was outlined in the Scheme, specifying the equity share conversion rates post-amalgamation.

The Court had previously allowed the dispensation of shareholder and creditor meetings based on written consents and payments made to creditors. Following this, the present petition was filed seeking approval for the Scheme of Amalgamation. Notices were issued to the Regional Director and the Official Liquidator, with citations published in newspapers as directed by the Court. The Official Liquidator's report confirmed no complaints against the proposed Scheme and no prejudicial conduct by the Transferor Company. The Regional Director highlighted the seamless employee transition and raised concerns about share allotments to Non-Resident Indians.

In response to the Regional Director's observations, the Director of both companies provided explanations and details regarding foreign remittances and share allotments. No objections were raised by any party regarding the Scheme of Amalgamation. With approval from shareholders and creditors, along with positive reports from regulatory authorities, the Court granted sanction to the Scheme. The Transferor Company's assets, liabilities, and duties were to be transferred to the Transferee Company without further formalities. The order specified compliance with statutory requirements and the dissolution of the Transferor Company post-amalgamation. The order did not exempt from stamp duty or taxes and required compliance with all legal obligations.

Additionally, the Petitioner Company agreed to deposit a sum in the Official Liquidator's fund voluntarily. The Court allowed the petition in the terms presented, with the order issued for immediate action.