Transferee Company granted dispensation for Amalgamation Scheme without separate sanction application The Transferee Company sought dispensation from the Bombay High Court for sanction of a Scheme of Amalgamation with the Transferor company, as it held ...
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Transferee Company granted dispensation for Amalgamation Scheme without separate sanction application
The Transferee Company sought dispensation from the Bombay High Court for sanction of a Scheme of Amalgamation with the Transferor company, as it held 100% equity shares of the Transferor. Previous court directions had dispensed with the need for approval from shareholders and creditors. Citing legal precedents, including cases like Auto Tools India Pvt. Ltd., the court ruled that a separate application for sanction by the Transferee was unnecessary. Consequently, the application was granted, and the Transferee was not required to approach the High Court for approval of the Scheme.
Issues involved: Application seeking dispensation from approaching the High Court of Bombay for sanction of the Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956.
Summary: The Applicant, a Transferee Company, sought dispensation from approaching the High Court of Bombay for sanction of the Scheme of Amalgamation with the Transferor company. The Court had previously allowed directions for dispensing with the meeting of equity shareholders, secured creditors, and unsecured creditors of the Transferor company for approval of the Scheme. The Transferee company held 100% paid-up equity shares of the Transferor company, making it a wholly owned subsidiary. The legal position, as established in various cases including Auto Tools India Pvt. Ltd., Sharat Hardware Industries Pvt. Ltd., Mahaamba Investments Ltd., Andhra Bank Housing Finance Ltd., and others, indicated that there was no requirement for a separate application for sanction of the Scheme by the Transferee Company. Consequently, the application was allowed, and the need for the Transferee Company to approach the Bombay High Court for sanction of the Scheme was dispensed with.
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