Amalgamation scheme sanctioned after statutory compliance, resolved objections, and confirmation that the arrangement was genuine and bona fide.

A scheme of amalgamation was sanctioned under sections 391 to 394 of the Companies Act, 1956 after the statutory requirements were found satisfied. The court noted that shareholder and creditor meetings had been dispensed with on the basis of consent affidavits, notice had been duly served on the Regional Director and Official Liquidator, and the objections on reserves, accounting treatment, and tax compliance were answered. The Official Liquidator reported no prejudice to members or the public interest, and the petitioners undertook compliance with applicable statutory liabilities. The scheme was held genuine and bona fide and was approved.

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Issues: Whether the Scheme of Amalgamation of the transferor company with the transferee company deserved sanction under sections 391 to 394 of the Companies Act, 1956.

Analysis: The requisite meetings of shareholders and creditors had already been dispensed with on the basis of consent affidavits. Notice to the Regional Director and the Official Liquidator was issued and service was duly completed. The objections raised by the Regional Director regarding reserves and accounting treatment were found untenable, and the objection relating to tax compliance was met by the petitioners. The Official Liquidator reported that the affairs of the transferor company had not been conducted in a manner prejudicial to members or the public interest, and the petitioners undertook compliance with applicable statutory liabilities.

Conclusion: The Scheme satisfied the requirements of sections 391 to 394 of the Companies Act, 1956, was found genuine and bona fide, and was sanctioned.

Ratio Decidendi: A scheme of amalgamation is liable to be sanctioned where the statutory requirements are met, the scheme is found to be genuine and bona fide, and no objection survives from the Regional Director or the Official Liquidator that would make the scheme contrary to the interests of shareholders, creditors, or the public interest.

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