Court approves amalgamation scheme with conditions, dismisses objections, directs Registrar notice within 30 days.

The court approved the scheme of amalgamation and arrangement, subject to specific conditions, with effect from 01-04-2011. All objections and applications filed by creditors and shareholders were dismissed. The court directed the petitioner to provide a copy of the order and scheme to the Companies Registrar within 30 days and ordered payment of Rs. 25,000 each to the Regional Director and the Official Liquidator.

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Issues Involved:
1. Whether the scheme of amalgamation is in accordance with the provisions of Sections 391 and 394 of the Companies Act, 1956.
2. Whether the grounds for winding up are made out.
3. Whether non-convening of the meeting of the unsecured creditors is intentional and whether such failure entitles the rejection of the scheme of amalgamation.
4. Whether the rights of the shareholders were not properly taken care of and the view of the majority is not binding on the minority shareholders.
5. Whether the reports of the Official Liquidator and the Regional Director disentitle the scheme of amalgamation.
6. Whether the scheme of amalgamation is fair and in the public interest and if so it has to be sanctioned as pleaded.

Detailed Analysis:

1. Whether the scheme of amalgamation is in accordance with the provisions of Sections 391 and 394 of the Companies Act, 1956:
The court examined the compliance with statutory procedures under Sections 391 and 394 of the Act, referencing the Supreme Court's principles in Miheer H.Mafatlal vs. Mafatlal Industries. The court noted that all requisite statutory procedures were followed, including obtaining the necessary majority vote, providing relevant material to creditors and shareholders, and ensuring the scheme was not violative of any law or public policy. The court found that the scheme met all the required parameters and was backed by the requisite majority.

2. Whether the grounds for winding up are made out:
The court addressed the objections raised by 37 creditors who filed applications complaining about the injustice done to them and seeking winding up of the company. The court found that the debts claimed by these creditors were under a cloud of suspicion and not prima facie binding on the petitioner company. The court also noted that the refusal to pay these debts was not mala fide, and the scheme of amalgamation was in the interest of the public and shareholders.

3. Whether non-convening of the meeting of the unsecured creditors is intentional and whether such failure entitles the rejection of the scheme of amalgamation:
The court acknowledged that the meeting of unsecured creditors was not called, but it was not fatal to the scheme. The objections raised by the creditors were considered by the court, which found that the debts were not genuine and were tainted. The court concluded that the failure to call a meeting was not intentional and did not entitle the rejection of the scheme.

4. Whether the rights of the shareholders were not properly taken care of and the view of the majority is not binding on the minority shareholders:
The court addressed the objections raised by minority shareholders regarding the swap ratio and the timing of the merger meeting. The court found that the swap ratio was based on the auditors' report and was accepted by the majority of shareholders, including reputed companies like LIC and Birla Sunlife Mutual Fund. The court concluded that the majority decision was binding on the minority shareholders and there was no violation of propriety.

5. Whether the reports of the Official Liquidator and the Regional Director disentitle the scheme of amalgamation:
The court considered the reports of the Official Liquidator and the Regional Director, noting that they did not oppose the scheme as being against public interest. The court found that the petitioner company had accepted all the requirements of the Regional Director and that the reports did not disentitle the scheme of amalgamation.

6. Whether the scheme of amalgamation is fair and in the public interest and if so it has to be sanctioned as pleaded:
The court concluded that the scheme of amalgamation was fair, in the public interest, and beneficial to the shareholders and workmen. The court imposed certain conditions to ensure compliance with ongoing prosecutions and investigations and to protect the interests of creditors and shareholders.

Conclusion:
The court approved the scheme of amalgamation and arrangement with effect from 01-04-2011, subject to specific conditions, and dismissed all objections and applications filed by the creditors and shareholders. The court directed that a copy of the order and scheme be furnished to the Companies Registrar within 30 days and ordered the petitioner to pay a sum of Rs. 25,000 each to the Regional Director and the Official Liquidator.

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