2010 (5) TMI 377 - HC - Companies Law

Gujarat High Court approves Amalgamation Scheme under Companies Act, 1956

Colourtex Marketing (P.) Ltd., In re

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 ... Scheme of Amalgamation - Held that:- So far as Regional Director is concerned, he has no objections to sanction the proposed Scheme of Amalgamation of the Transferor-Companies with the Transferee-Company subject to comply with the provisions of sections 20 and 21 of the Companies Act, 1956 with respect to filing of necessary forms with the Registrar of Companies, Gujarat and proposed new names will be subject to availability of the same by the Registrar of Companies, Gujarat. Company Petition Nos. 117, 118 and 119 of 2009 are allowed. In light of provision in the Scheme, the Transferor-Companies are hereby directed to be dissolved without winding upon the Companies filing certified copy of the order of this Court. The matter stands disposed of accordingly. 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 AmalgamationThe 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 ProvisionsNotices 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 LiquidatorThe 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-CompaniesThe 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.