Gujarat High Court Approves Amalgamation Scheme, Dispenses with Meetings

The High Court of Gujarat sanctioned the Scheme of Arrangement for amalgamation, allowing the petitioner's requests to dispense with meetings of shareholders and creditors. The petitioner addressed concerns raised by the Regional Director regarding compliance with Accounting Standard-14 and the Income Tax Act by filing undertakings to ensure adherence. The Court found the responses satisfactory, approving the Scheme subject to any orders from the High Court of Kolkata in related proceedings. The petitioner was directed to pay fees and lodge necessary documents with the Registrar for authentication, concluding the matter.

---

---

Issues:
1. Sanction of Scheme of Arrangement in the nature of amalgamation.
2. Compliance with Accounting Standard-14 and Income Tax Act.
3. Observations by Regional Director and responses by the petitioner.

Analysis:
The petitioner sought sanction for a Scheme of Arrangement for amalgamation, initially filing Company Application No. 344 of 2015 to dispense with meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors. The High Court of Gujarat, considering consent letters, dispensed with the meetings and allowed the prayers as sought. Subsequently, the petitioner filed the present petition seeking sanction for the Scheme. The petition was admitted, and directions were given for notice issuance and publication in newspapers. The Regional Director filed an affidavit raising concerns regarding compliance with Accounting Standard-14 and the Income Tax Act.

In response to the Regional Director's observations, the petitioner filed an affidavit undertaking to comply with Accounting Standard-14 and the Income Tax Act. The petitioner assured that any excess of assets over liabilities would be credited to the Amalgamation Reserve Account and not to the General Reserve Account. The shortfall, if any, would be debited to the goodwill account. The petitioner also committed to complying with the Income Tax Act and rules. The petitioner's responses addressed the concerns raised by the Regional Director, ensuring compliance with the requirements.

Consequently, the High Court found that the petitioner had adequately addressed the Regional Director's queries and undertakings. The Court sanctioned the Scheme of Arrangement for amalgamation, subject to any order by the High Court of Kolkata in proceedings by the Transferor Company. Additionally, the petitioner was directed to pay fees to the Assistant Solicitor General of India. Filing and issuance of drawn-up orders were dispensed with, instructing concerned authorities to act on the order along with the authenticated Scheme. The petitioner was directed to lodge a copy of the order and authenticated Scheme with the Registrar, who would issue an authenticated copy within seven days. The petition was disposed of accordingly.

---