2013 (5) TMI 992 - HC - Companies Law

Court approves company amalgamation, assets transfer, and share capital reduction scheme.

In Re: Kailash Auto Finance Ltd. And Others

The court sanctioned the scheme of arrangement involving the amalgamation of companies, transfer of assets and liabilities, and reduction of share capital ... - Issues involved: Application u/s 391/394 and Section 100 of the Companies Act, 1956 for sanction of scheme of arrangement and reducing share capital.Scheme of Arrangement: The scheme involves amalgamation of companies no. 2 and 3 with the petitioner company, with the petitioner taking over all assets, liabilities, and employees without break in service. Additionally, it includes reducing the paid-up share capital of the petitioner company to Rs. 38,05,900 divided into equal number of equity shares of Re. 1/- each.Convening Meetings: Court dispensed with meeting of secured and unsecured creditors as petitioner had no creditors. Shareholders' meeting held on 27th January 2013 in Kanpur, with notices issued by post and published in newspapers. Quorum was complete, and majority of shareholders approved the scheme.Opposition and Objections: No appearance or objections opposing the scheme. Petitioner company received no objections from any person in India. Regional Director had no objection to the scheme, mentioning defaults in payment of funds and taxes, which are separate issues.Approval and Resolutions: Board of Directors of all companies involved passed resolutions accepting the scheme. Special resolution for reduction of share capital not required as per precedents when entire assets and liabilities are transferred in amalgamation.Sanction of Scheme: Court found no impediment in sanctioning the scheme of arrangement. Scheme sanctioned, with order to be placed before Registrar of Companies for registration within 30 days.Conclusion: Petition allowed, Company Application No. 17 of 2012 stands disposed of.