Gujarat High Court approves Amalgamation Scheme under Companies Act, 1956

The High Court of Gujarat sanctioned the Scheme of Amalgamation of multiple companies under section 391(2) of the Companies Act, 1956. The Court found the amalgamation to be in the interest of the companies, members, and creditors, subject to compliance with specified provisions. Objections raised by the Official Liquidator regarding compliance issues, including the change in face value of shares, were addressed and resolved. The Court allowed the Company Petitions, directing the dissolution of Transferor-Companies without winding up upon compliance with specified clauses of the Companies Act, 1956.

---

---

Issues:
1. Sanctioning the Scheme of Amalgamation of multiple companies under section 391(2) of the Companies Act, 1956.
2. Compliance with necessary provisions for the Amalgamation process.
3. Objections raised by the Official Liquidator regarding the change in face value of shares.
4. Dissolution of Transferor-Companies without winding up.

Issue 1: Sanctioning the Scheme of Amalgamation
The High Court of Gujarat considered Company Petitions filed for sanctioning the Scheme of Amalgamation of several companies. The petitions involved Transferor-Companies merging with a Transferee-Company, all belonging to the same management group. Meetings of Equity Shareholders and Creditors were dispensed with based on obtained consents. The Court admitted the petitions and ordered publication of notices in newspapers, receiving no objections to the proposed Scheme.

Issue 2: Compliance with Necessary Provisions
Notices were issued to the Regional Director and Official Liquidator, who raised objections regarding compliance with the Companies Act, 1956 provisions for filing necessary forms and changing the name of the Transferee-Company. The Court reviewed reports and submissions, ensuring compliance with sections 20 and 21 of the Act and availability of the proposed new name. The Court found the amalgamation to be in the interest of the companies, members, and creditors, subject to compliance with specified provisions.

Issue 3: Objections by Official Liquidator
The Official Liquidator raised objections concerning the change in face value of shares, from Rs. 1,000 to Rs. 10. However, the petitioner clarified that the share capital would remain the same, and the Scheme provided for the issuance of shares at Rs. 10 each. The objections were addressed, and the Court noted that no objections indicated any prejudicial conduct by the companies. The objections were considered resolved based on the clarifications provided.

Issue 4: Dissolution of Transferor-Companies
The Court allowed the Company Petitions, granting the prayers with a requirement to comply with specific clauses of the Companies Act, 1956. The Transferor-Companies were directed to be dissolved without winding up upon filing a certified copy of the Court's order. The costs to be paid by the petitioner companies to the Assistant Solicitor General of India and the Official Liquidator were quantified per petition filed by the Transferor-Companies.

This comprehensive analysis highlights the legal proceedings and decisions made by the High Court of Gujarat regarding the Scheme of Amalgamation and the necessary compliance for the involved companies, ensuring a thorough understanding of the judgment.

---