2016 (11) TMI 163 - HC - Companies Law

Scheme of amalgamation - Considering the approval accorded by the equity shareholders and creditors of the petitioner companies to the proposed Scheme of Amalgamation and Arrangement and the affidavits filed by the Regional Director, Northern Region and the Official Liquidator having not raising any objection to the proposed Scheme of Amalgamation and Arrangement, there appears to be no impediment to the grant of sanction to the Scheme of Amalgamation and Arrangement. Consequently, sanction is hereby granted to the Scheme of Amalgamation and Arrangement under Sections 391 and 394 of the Companies Act, 1956

Summary

Issues:
Petition filed under Sections 391, 392 & 394 of the Companies Act, 1956 for sanction of Scheme of Amalgamation and Arrangement involving multiple companies.

Analysis:
The petition was filed seeking sanction for the Scheme of Amalgamation and Arrangement between four transferor companies and one transferee company. The transferor companies were incorporated under the Companies Act, 1956 on different dates, with the transferee company also being incorporated under the same Act. The Scheme aimed to amalgamate the transferor companies into the transferee company to enhance operational efficiency and overall shareholders' value. The share exchange ratio was detailed in the Scheme, specifying the number of equity shares to be issued by the transferee company to the shareholders of each transferor company. The Board of Directors of all companies unanimously approved the proposed Scheme.

The court had earlier dispensed with the requirement of convening meetings of equity shareholders and unsecured creditors for the Scheme. The petition sought sanction for the Scheme after compliance with necessary procedures, including publication of citations and filing of reports by the Official Liquidator and Regional Director, Ministry of Corporate Affairs. Both reports did not raise any objections to the proposed Scheme. No objections were received from any other party. With approval from shareholders and creditors and no objections raised, the court granted sanction to the Scheme under Sections 391 and 394 of the Companies Act, 1956. The order specified compliance with statutory requirements and clarified that it did not exempt payment of stamp duty. Upon the Scheme becoming effective, the transferor companies would stand dissolved without winding up.

The Official Liquidator requested costs of at least &8377; 1,00,000 to be paid by the petitioners due to the extensive examination of records and prioritized hearings. The petitioner companies agreed to this, and the court directed them to deposit the sum with the Delhi High Court Bar Association Lawyers Social Security and Welfare Fund. The petition was allowed accordingly.