2016 (6) TMI 219 - HC - Companies Law

Scheme of amalgamation - Held that - In view of the approval accorded to the scheme by the shareholders and creditors (i.e secured and unsecured) of the petitioners and, given the fact, that the RD and the OL have not articulated any objections, to the scheme, in opinion, there appears to be no impediment in the grant of sanction to the scheme. Consequently, sanction is granted to the scheme in terms of Section 391 and 394 of the Act. The petitioners will, however, comply with all statutory requirements, as mandated in law. A certified copy of the order, sanctioning the scheme, will be filed with the ROC, within thirty (30) days of its receipt. Resultantly, it is directed that the petitioners will comply with all provisions of the scheme

Issues:
1. Approval of scheme of amalgamation under Sections 391 and 394 of the Companies Act, 1956.
2. Compliance with statutory requirements for amalgamation.
3. Concerns raised by the Regional Director regarding the scheme.
4. Affidavit filed by the Official Liquidator under Section 394 A of the Act.
5. Resolution of discrepancies and concerns raised by the Regional Director.
6. Approval and sanction of the scheme by the court.
7. Compliance with scheme provisions post-sanction.
8. Undertaking by the transferee company to take over liabilities of the transferor company.
9. Clarity on legal implications post-sanction of the scheme.

Detailed Analysis:

1. The judgment pertains to a second motion petition filed jointly by two companies for the approval of a scheme of amalgamation under Sections 391 and 394 of the Companies Act, 1956. The petitioners, a transferor company and a transferee company, seek to pool their resources for more efficient operations.

2. The petitioners have provided details of their capital structure, resolutions approving the scheme, and affirmed the absence of pending legal proceedings against them under relevant sections of the Act.

3. The court had earlier dispensed with the requirement of convening meetings of shareholders and creditors in the first motion petition. The current petition seeks final approval of the scheme.

4. The Regional Director (RD) and Official Liquidator (OL) were involved in the process, with the RD raising concerns about discrepancies and missing filings related to the scheme.

5. The petitioners addressed the concerns raised by the RD by rectifying errors and extending the validity period of the scheme, as highlighted in subsequent filings.

6. Based on the submissions and lack of objections post-publication, the court granted sanction to the scheme under Sections 391 and 394 of the Act, subject to compliance with statutory requirements.

7. The court emphasized the need for compliance with all provisions of the approved scheme and directed the transferee company to undertake the liabilities of the transferor company.

8. An undertaking by the transferee company to assume liabilities and a caution regarding potential legal actions against individuals or officials post-sanction were highlighted in the judgment.

9. The court clarified that the order did not exempt the parties from legal obligations such as stamp duty, taxes, or compliance with relevant laws, ensuring transparency and adherence to legal requirements post-sanction.

This comprehensive analysis covers the key issues addressed in the judgment, detailing the process, concerns raised, resolutions made, and the final approval granted by the court.

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