2014 (7) TMI 811 - HC - Companies Law

Delhi High Court approves Companies Act merger scheme, stresses compliance & asset transfer

The Delhi High Court granted sanction to a Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956, involving the merger of four ... Scheme of Amalgamation - No objection has been received to the Scheme from any other party. Mr. Pawan Kumar Mittal, Director of the Transferee Company, has filed an affidavit confirming that neither the Petitioner Companies nor their counsel has received any objection pursuant to citations published in the newspapers. - In view of the approval accorded by the Shareholders and Creditors of the Petitioner Companies, affidavit/report filed by the Regional Director, Northern Region and the Official Liquidator, attached with this court to the proposed Scheme, there appears to be no impediment to the grant of sanction in the scheme. - approval granted to the scheme. Issues:1. Sanction of Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956.2. Compliance with statutory requirements for amalgamation.3. Observations by Official Liquidator and Regional Director.4. Clarifications regarding compliance with Reserve Bank of India regulations.5. Approval and objections to the Scheme.Analysis:The judgment pertains to a joint petition filed for the sanction of a Scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956. The petition involves the merger of four Transferor Companies with a Transferee Company, along with their respective Shareholders and Creditors. The registered offices of all companies are within the jurisdiction of the Delhi High Court. Details regarding the incorporation and financials of the involved companies have been provided, including copies of necessary documents like Memorandum, Articles of Association, and audited Annual Accounts.The petitioners had previously filed for dispensation of meetings, which was granted by the Court. Subsequently, the present petition sought sanction of the Scheme. Notices were issued to the Regional Director and Official Liquidator, with required citations published in newspapers. The Official Liquidator's report stated no complaints against the proposed Scheme, ensuring no prejudicial conduct by the Transferor Company. The Regional Director raised observations regarding compliance with Reserve Bank of India regulations and discrepancies in the Scheme's submission dates.In response to the observations, the petitioner Companies provided undertakings to comply with RBI norms and clarified typographical errors in the Scheme submission. The Court directed that any violation of RBI provisions by the companies' directors would render them liable even after the scheme's sanction. No objections were raised by Income Tax Authorities, and the concerns of the Regional Director were addressed by the petitioners.With shareholder and creditor approvals, along with positive reports from the Regional Director and Official Liquidator, the Court found no impediment to granting sanction to the Scheme under Sections 391 and 394 of the Act. The order mandated compliance with statutory requirements, transfer of assets, liabilities, and dissolution of Transferor Companies upon the Scheme's effect. The order did not exempt from stamp duty, taxes, or other charges, and required compliance with all legal requirements. Additionally, the petitioners agreed to deposit a sum in the Official Liquidator's fund voluntarily.In conclusion, the petition was allowed, and the order was directed to be filed with the Registrar of Companies.