2016 (1) TMI 465 - HC - Companies Law

High Court approves Scheme of Arrangement amid objections, mandates compliance with laws and stakeholder binding

The High Court sanctioned the Scheme of Arrangement between Transferor and Transferee Companies, following approvals from SEBI and the Competition ... Sanction of Amalgamation and Arrangement - Scheme of Amalgamation and Arrangement is hereby sanctioned with the direction to follow all the procedural formalities. Issues:Sanctioning of Scheme of Arrangement between multiple companies, approval from SEBI and Competition Commission of India, objections raised by Regional Director and Official Liquidator, compliance with procedural requirements, liabilities regarding outstanding dues, SEBI's comments on the draft scheme.Sanctioning of Scheme of Arrangement:The petition sought approval for a Scheme of Arrangement between Transferor and Transferee Companies, detailing the transfer of assets and liabilities. The companies involved had obtained necessary approvals from their respective boards and regulatory authorities. The High Court, after considering reports from the Regional Director and Official Liquidator, sanctioned the Scheme, binding all stakeholders.Compliance with SEBI and Competition Commission of India Approvals:SEBI had provided general comments on the draft scheme, indicating compliance with circular provisions. The Competition Commission of India had also approved the proposed scheme. The Court noted these approvals and proceeded with the sanctioning of the Scheme.Objections Raised by Regional Director and Official Liquidator:The Regional Director raised concerns regarding foreign shareholding and pending prosecution proceedings against the Transferor Company. The Official Liquidator highlighted disputes over outstanding dues. The Court addressed these issues by considering undertakings made by the companies to comply with laws and handle tax-related matters as per the Scheme.Liabilities Regarding Outstanding Dues:The Official Liquidator had pointed out pending disputes related to taxes and other dues. The Scheme included clauses to address these liabilities, ensuring that the Transferor and Transferee Companies would handle all financial obligations appropriately.SEBI's Comments on the Draft Scheme:SEBI's role was to offer comments on the draft scheme as per its circulars, without issuing approval or rejection. The Court acknowledged SEBI's no objection to the Scheme, subject to compliance with circular provisions and other regulatory requirements.In conclusion, the High Court sanctioned the Scheme of Arrangement, directing the Transferor and Transferee Companies to fulfill all procedural requirements and comply with relevant laws. The order was to be published in specified newspapers and the official gazette, with a copy to be filed with the Registrar of Companies. Interested parties were given the liberty to seek further directions, and the petitioners agreed to deposit a sum in the Common Pool Fund Account of the Official Liquidator.