Approval of Scheme of Arrangement between Companies by High Court

The High Court of Allahabad approved the Scheme of Arrangement between a transferor-company and a transferee-company. The court declared the Scheme binding on all members of both companies, directing the transfer of property, rights, powers, liabilities, and duties. All proceedings were to continue with the transferee-company, which was instructed to allot shares to entitled members of the transferor-company. The transferor-company had 30 days to register the order with the Registrar of Companies, after which it would dissolve without winding up. Interested parties could seek further directions, and the order was subject to approval by the Calcutta High Court for the transferee-company.

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Issues:
Approval of Scheme of Arrangement between transferor-company and transferee-company.

Analysis:
The High Court of Allahabad, in this judgment delivered by Justice Sushil Harkauli, considered the petition for the approval of a Scheme of Arrangement between the transferor-company and the transferee-company. The court reviewed various documents, including the order for convening a meeting of equity shareholders, the reports of the Chairman of the meeting, and the official liquidator's report stating that the affairs of the transferor-company were not conducted prejudicially. Additionally, the regional director of the Department of Company Affairs confirmed no objection to the proposed Scheme. Notably, the Scheme had been unanimously approved by the members present and voting at the meeting.

The court sanctioned the Scheme of arrangement, declaring it binding on all members of the petitioner-company and the transferee-company. The court ordered the transfer of property, rights, powers, liabilities, and duties from the transferor-company to the transferee-company without the need for further action. It directed that all proceedings pending by or against the transferor-company be continued by or against the transferee-company. Moreover, the transferee-company was instructed to allot shares to the entitled members of the transferor-company as per the Scheme. The transferor-company was given 30 days to deliver a certified copy of the order to the Registrar of Companies for registration, after which it would stand dissolved without winding up.

The court emphasized that any interested person could apply for necessary directions in the matter. The order was made subject to the approval of the Scheme by the Hon'ble Calcutta High Court concerning the transferee-company. The court directed the office to prepare a formal order with necessary modifications, including the schedule of properties, and issue certified copies to the petitioner-company within 45 days. This comprehensive judgment addressed the legal aspects of the Scheme of Arrangement, ensuring a smooth transfer of assets and liabilities between the involved companies in compliance with the Companies Act, 1956.

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