2013 (10) TMI 1099 - HC - Companies Law

Compromise and Arrangement u/s 391 to 394 of Companies Act Scheme of Arrangement - Held that - In view of the approval accorded by the shareholders and creditors of the petitioner companies, representations/reports filed by the Regional Director and the Official Liquidator attached with this Court to the proposed scheme of arrangement, there appeared to be no impediment to the grant of sanction to the scheme of arrangement - sanction was granted to the scheme of arrangement under sections 391 to 394 of the Companies Act, 1956. In terms of the provisions of Sections 391 to 394 of the Companies Act, 1956 and in terms of the scheme, the whole or part of the undertaken, the property, rights and powers of the transfer or companies be transferred to and vest in the transferee companies without any further act or deed - all the liabilities and dues of the transfer or companies be transferred to the transferee company without any further act or deed - Upon the scheme coming into effect, the transfer or company shall stand dissolved without winding up - It was, however, clarified that this order will not be construed as an order granting exemption from payment of stamp duty or taxes or any other charges, if payable in accordance with any law, or permission/compliance with any other requirement which may be specifically required under any law - The statement is accepted.

Issues:
Petition filed under Sections 391 to 394 of the Companies Act, 1956 seeking sanction of a scheme of arrangement. Dispensation of meetings for equity shareholders, secured and unsecured creditors. Compliance with notice issuance and publication requirements. Official Liquidator's report on the proposed scheme. Regional Director's no objection to the scheme. No objections received from any party. Approval by shareholders and creditors. Transfer of assets, liabilities, and dissolution of transferor company.

Analysis:

1. Petition under Sections 391 to 394 of the Companies Act, 1956: The petition was filed seeking sanction of a scheme of arrangement. Earlier, a request was made for dispensation of meetings for equity shareholders, secured and unsecured creditors, which was allowed by the court. The present petition was filed for the sanction of the scheme of arrangement, and all necessary procedures under the Companies Act were followed.

2. Compliance with Notice Issuance and Publication Requirements: Notices were issued to the Regional Director, Northern Region, and the Official Liquidator as per the court's direction. Citations were published in specified newspapers. Affidavits were filed to show compliance with the service of the petition and publication of citations, ensuring transparency and adherence to legal procedures.

3. Official Liquidator and Regional Director's Reports: The Official Liquidator sought information from the petitioner companies and filed a report stating no complaints against the proposed scheme. The Regional Director, Northern Region, confirmed no objection to the scheme and highlighted the clause regarding the transfer of employees to the transferee company without interruption in services.

4. No Objections Received: No objections were received from any party regarding the scheme of arrangement. Affidavits were filed confirming the absence of objections, further strengthening the case for the approval of the scheme.

5. Approval by Shareholders and Creditors: Shareholders and creditors of the petitioner companies approved the scheme. Reports and representations by the Regional Director and Official Liquidator supported the approval of the scheme, indicating no impediments to granting sanction.

6. Transfer of Assets, Liabilities, and Dissolution: The court granted sanction to the scheme of arrangement under Sections 391 to 394 of the Companies Act, 1956. The order outlined the transfer of assets, liabilities, and dissolution of the transferor company without winding up, emphasizing compliance with statutory requirements and legal provisions.

7. Additional Compliance: The order clarified that it did not exempt the petitioner companies from payment of stamp duty, taxes, or other charges as per the law. It emphasized the need for compliance with any specific requirements under applicable laws.

8. Voluntary Deposit: The petitioner companies agreed to voluntarily deposit a sum in the Common Pool Fund of the Official Liquidator, demonstrating cooperation and commitment to fulfilling financial obligations.

In conclusion, the judgment approved the scheme of arrangement, ensuring transparency, compliance with legal procedures, and protection of stakeholders' interests through the transfer of assets and liabilities as per the Companies Act, 1956.

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