2016 (5) TMI 731 - HC - Companies Law

Scheme of amalgamation - change of the name of the company - Held that - this Court while dispensing for the convening of the meeting of transferor and transferee company has taken note of the fact that 100% equity shareholders of both the companies have filed their consent affidavits. Thus, the scheme of amalgamation consented by the 100% equity shareholders also containing the clause for change of name of the transferee Company under clause 16 therein, makes it abundantly clear that there is no necessity for repeating the exercise once again for the purpose of change of the name of the company. The Scheme states that there is no objectionable feature in the scheme of amalgamation which is detrimental either to the employees of the transferor company or of the transferee company. The said scheme is not violative of any statutory provisions. The scheme is fair, just, sound and is knot against any public policy or public interest. No proceedings are pending under sections 231 to 237 of the Companies Act, 1956. All the statutory provisions are complied with.

Summary

Issues:
1. Scheme of amalgamation between two companies under Sections 391 to 394 of the Companies Act, 1956.
2. Objection raised by the Regional Director regarding the change of name of the transferee company without following the procedures under the Companies Act, 2013.

Analysis:
Issue 1: The judgment involves two company petitions seeking the sanction of a scheme of amalgamation between a transferor company and a transferee company. The petitions requested the dissolution of the transferor company without winding up. The court admitted the petitions and issued notices to relevant authorities, including the Regional Director, Ministry of Corporate Affairs, and the Official Liquidator.

Issue 2: The Regional Director objected to the scheme of amalgamation, specifically concerning the change of name of the transferee company without following the procedures outlined in the Companies Act, 2013. The petitioner argued that since the scheme was approved by 100% shareholders and included provisions for the name change, compliance with Section 13 of the Companies Act, 2013, was deemed satisfied. The petitioner cited previous court decisions where similar objections were rejected.

The court reviewed previous decisions where objections by the Regional Director regarding name changes in amalgamation schemes were considered and rejected. It emphasized that the scheme, approved by shareholders and compliant with Section 391 of the Companies Act, did not necessitate additional procedures for changing the company's name. The court found the objection satisfactorily explained by the petitioner and noted that all statutory provisions were complied with in the scheme.

Ultimately, the court allowed both company petitions, approving the scheme of amalgamation between the two companies. The transferor company was to be dissolved without winding up. The Regional Director was directed to be paid a sum from the transferor company. The judgment highlighted the fair, just, and compliant nature of the scheme, ensuring it was not against public policy or interest.

In conclusion, the judgment resolved the issues related to the scheme of amalgamation and objections raised by the Regional Director, emphasizing compliance with legal procedures and shareholder consent in approving the scheme.