Court sanctions scheme under Companies Act, deems appointed date appropriate. Beneficial to companies, shareholders, creditors.

The court overruled the objections of the Regional Director and sanctioned the scheme under Sections 391 to 394 of the Companies Act. The court found that the scheme, despite being a slump sale, required approval under these sections. The appointed date for the scheme was deemed appropriate, and the court concluded that the scheme was beneficial to the companies, shareholders, and creditors involved. The court ordered the scheme to be sanctioned and directed the petitioner to notify the Registrar of Companies within 30 days.

---

---

Issues Involved:
1. Applicability of Sections 391 to 394 versus Section 180 of the Companies Act.
2. Nature of the scheme as a slump sale versus amalgamation or reconstruction.
3. Appropriateness of the appointed date for the scheme.

Issue-wise Detailed Analysis:

1. Applicability of Sections 391 to 394 versus Section 180 of the Companies Act:
The petitioner sought sanction for a scheme of arrangement under Sections 391 to 394 of the Companies Act. The Regional Director objected, arguing that the scheme should fall under Section 180 of the Companies Act, 2013, which deals with the powers of the board of directors to sell, lease, or otherwise dispose of the whole or substantially the whole of the undertaking. The court held that Sections 391 to 394 form a complete code by themselves and take precedence over other provisions of the Act, including Section 180. This was supported by judicial precedents such as PMP Auto Industries Ltd., In re, and S.S. Minnda Ltd., In re, which affirmed that schemes falling under Sections 391 to 394 could be sanctioned even if they involve actions requiring special procedures under other sections of the Companies Act.

2. Nature of the Scheme as a Slump Sale versus Amalgamation or Reconstruction:
The Regional Director contended that the scheme was a slump sale and not an amalgamation or reconstruction, and thus should not fall under Sections 391 to 394. The court examined multiple judgments, including Health Products Ltd. vs. Unknown and Nirma Limited, which established that even slump sales could be sanctioned under Sections 391 to 394. The court concluded that the scheme, despite being a slump sale, required the approval of the company court under Sections 391 to 394.

3. Appropriateness of the Appointed Date for the Scheme:
The Regional Director objected to the appointed date of April 1, 2013, arguing it should be shifted to April 1, 2014, due to the preparation of the balance sheet for the year ending March 31, 2014. The petitioner cited Circular No. 12, dated February 21, 1977, from the Department of Company Affairs, which clarified that companies undergoing amalgamation must continue complying with the provisions of the Act, including the preparation of annual accounts, until the amalgamation order is made by the court. The court found that the appointed date did not need to be shifted as per the clarification provided by the Department of Company Affairs.

Conclusion:
The court overruled the objections of the Regional Director and sanctioned the scheme. It concluded that the scheme was beneficial to both the transferor and transferee companies, their shareholders, and creditors. The scheme had already received no objections from the Bombay Stock Exchange, National Stock Exchange, Bangalore Stock Exchange, SEBI, and the Competition Commission of India. The court ordered that the scheme be sanctioned as per annexure F and directed the petitioner to send a copy of the order to the Registrar of Companies within 30 days.

---