Court sanctions amalgamation scheme under Companies Act, 1956, deems it in public interest.

The court granted the prayers in the Company Petitions for amalgamation under sections 391 to 394 of the Companies Act, 1956. It found the Scheme to be in the interest of shareholders, creditors, and the public, and consequently sanctioned the Scheme of Arrangement. The court directed the petitioner companies to take specific actions within a specified timeframe, quantified costs to be paid, and instructed concerned authorities to act promptly on the order.

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Issues:
Petitions for obtaining court sanction for amalgamation under sections 391 to 394 of the Companies Act, 1956.

Analysis:
1. Accounting Treatment: The Regional Director raised concerns about the proposed Accounting Treatment in the Scheme. The petitioner argued that the company can prescribe specific treatment for reserves under the Scheme and cited Section 129(5) of the Companies Act, 2013. The court referred to previous decisions and concluded that no direction is needed to restrict dividend distribution out of reserves.

2. Share Exchange Ratio Calculation: The absence of working sheets for the calculation of Share Exchange Ratio was noted. The petitioner explained that both companies are private limited with the same shareholders, and the proposed ratio is equitable. The court referenced a previous judgment to support the fairness of the ratio calculation.

3. Inviting Objections from Income Tax Department: The Regional Director highlighted a letter inviting objections from the Income Tax Department. Since the statutory period lapsed without objections, it was presumed that the department had no issues. The petitioner agreed to comply with Income Tax Act provisions, leading the court to conclude that no further directions were necessary.

4. Sanction of Scheme: After considering all submissions, affidavits, and judgments, the court found the Scheme to be in the interest of shareholders, creditors, and the public. Consequently, the court granted the prayers in the Company Petitions and sanctioned the Scheme of Arrangement.

Conclusion:
The court disposed of the petitions, quantified costs to be paid to the Central Government Standing Counsel and the Office of the Official Liquidator, and directed the petitioner companies to take specific actions within a specified timeframe. The court dispensed with the filling and issuance of the drawn-up order, instructing all concerned authorities to act on the authenticated copy of the order promptly.

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