High Court of Bombay approves Scheme of Amalgamation under Companies Act

The High Court of Bombay granted sanction for the Scheme of Amalgamation of two Transferor-Companies with a Transferee-Company. Meetings were held with stakeholders who approved the Scheme. Publication was ordered, and no objections were raised by the Central Government. Despite a discrepancy in the appointed date, the court approved the Scheme in line with the Companies Act. The petition was allowed, with costs quantified at Rs. 3,500 for the Central Government.

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Issues:
Seeking sanction for the Scheme of Amalgamation of companies.

Analysis:
The petition was filed to seek sanction for the Scheme of Amalgamation of two Transferor-Companies with a Transferee-Company. The Transferor-Companies had their registered office in Maharashtra, and the petition was filed in the High Court of Bombay. The High Court of Bombay had already granted sanction to the Scheme. Meetings of equity shareholders, secured creditors, and unsecured creditors were convened as per the court's order, and reports were filed indicating approval of the Scheme by all present and voting at the meetings.

The petition was admitted, and publication was ordered in English and Gujarati newspapers. Notice was issued to the Central Government through the Regional Director of the Department of Company Affairs. Affidavits were filed by the petitioner-company and the Deputy Registrar of Companies, indicating compliance with publication orders and no objection from the Central Government, respectively. The Bombay Stock Exchange had issued a 'No Objection Certificate' for the scheme as the Transferee-company was listed.

Although the appointed date in the Scheme was mentioned as 1-4-2008, the meetings were convened after the end of the accounting year of 2008-09. The petitioner stated that the High Court of Bombay had already sanctioned the Scheme with the appointed date as 1-4-2008, so no order was passed to change the appointed date to avoid complications in implementation. No adverse circumstances were brought to the court's notice, and the Scheme of Amalgamation was sanctioned in accordance with the Companies Act. The petition was allowed, and the cost of the Central Government was quantified at Rs. 3,500.

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