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 proposed Scheme, which involved the merger of companies with a share exchange ratio of 10 equity shares of the transferee company for every 29 equity shares of the transferor company. With no objections received and the support of relevant authorities, the court directed compliance with statutory requirements and set the effective date of Amalgamation as 1st April, 2014.

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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.

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