2015 (5) TMI 195 - HC - Companies Law

High Court of Delhi approves merger scheme under Companies Act, 1956

The High Court of Delhi granted sanction to the Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956. The court approved the ... Application for Scheme of Amalgamation under Sections 391 & 394 of the Companies Act, 1956 - Held that:- In response to the notices issued in the petition, Mr. A. K. Chaturvedi, Regional Director, Northern Region, Ministry of Corporate Affairs has filed his report dated 2nd March, 2015. Relying on Clause 9.1 of Part-C of the Scheme, he has stated that, upon sanction of the Scheme of Amalgamation, all the employees of the transferor company shall become the employees of the transferee company without any break or interruption in their services. He has further submitted that in Clause 6.2 of Part-B of the Scheme, it has been stated that the transferee company shall account the amalgamation of the transferor company as per pooling of interest method as set out in Accounting Standards-14. He further submitted that in Clause 13 of Part-C of the Scheme, it has been stated that upon this scheme becoming effective, the transferor company shall stand dissolved without the process of winding up. No objection has been received to the Scheme of Amalgamation from any other party. The petitioner/transferee company, in the affidavit dated 3rd March, 2015 of Mr. Dhritiman Bhattacharyya, Counsel of the petitioner/transferee company, has submitted that they have not received any objection pursuant to the citations published in the newspapers on 31st December, 2014.Considering the approval accorded by the equity shareholders and creditors of the petitioner/transferee company to the proposed Scheme of Amalgamation and the affidavit filed by the Regional Director, Northern Region, not raising any objection to the proposed Scheme of Amalgamation, there appears to be no impediment to the grant of sanction to the Scheme of Amalgamation. - Application for scheme of amalgamation approved. Issues:1. Jurisdiction of the court for sanction of Scheme of Amalgamation.2. Details of the petitioner/transferee company and transferor company.3. Share exchange ratio and financial details.4. Approval of the proposed Scheme of Amalgamation.5. Compliance with statutory requirements and objections, if any.Jurisdiction of the Court:The petition was filed under Sections 391 & 394 of the Companies Act, 1956 seeking sanction of the Scheme of Amalgamation by the petitioner/transferee company, which was situated in New Delhi. However, the transferor company was located in Gurgaon, Haryana, outside the jurisdiction of the court. Separate proceedings for the transferor company were filed in the High Court of Punjab & Haryana at Chandigarh for the same purpose.Details of Companies:The petitioner/transferee company was originally incorporated as Spectral Diagnostics Private Limited, later changed its name to Inverness Medical India Private Limited, and finally to Alere Medical Private Limited. The authorized share capital of the petitioner/transferee company was Rs. 1,00,00,00,000 divided into 10,00,00,000 equity shares of Rs. 10 each.Share Exchange Ratio and Financial Details:The Scheme of Amalgamation proposed a share exchange ratio of 10 equity shares of Rs. 10 each fully paid up of the transferee company for every 29 equity shares of Rs. 10 each fully paid up held in the transferor company. The Scheme aimed to derive synergies, reduce operating costs, and improve profitability through consolidation. The financial details, including balance sheets and auditors' reports, were submitted for both companies.Approval of Proposed Scheme:The Board of Directors of both the transferor and transferee companies unanimously approved the proposed Scheme of Amalgamation in separate meetings held on 5th September, 2014. The court had earlier dispensed with the requirement of convening meetings of equity shareholders and unsecured creditors for the transferee company.Compliance and Objections:No objections were received to the Scheme of Amalgamation from any party. The Regional Director, Northern Region, Ministry of Corporate Affairs, submitted a report supporting the Scheme. With the approval of equity shareholders and creditors, and the absence of objections, the court granted sanction to the Scheme of Amalgamation under Sections 391 and 394 of the Companies Act, 1956. The petitioner company was directed to comply with statutory requirements, and the order was effective from the appointed date of Amalgamation, 1st April, 2014.