2016 (4) TMI 1016 - HC - Companies Law

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 ... Scheme of Arrangement - Held that:- The queries of the Regional Director have been met with by the petitioner. It is, therefore, ordered that, the Scheme, at Exhibit “C' to the petition, is sanctioned and the prayers as prayed at paragraph12 (a) in the petition are granted. This order of sanction is subject to any order that shall be made by the High Court of Kolkata in the proceedings taken out by the Transferor Company. The petitioner is directed to pay fees amounting to ₹ 7,500/to Mr.Devang Vyas, learned Assistant Solicitor General of India. Filing and issuance of drawn up orders are dispensed with. All the concerned authorities to act on this order along with the Scheme as shall be authenticated by the Registrar, High Court of Gujarat. The petitioner is directed to lodge the copy of this order as on the date of this order and Scheme duly authenticated by the Registrar, High Court of Gujarat. The Registrar, High Court of Gujarat shall issue the authenticated copy of this order along with the Scheme, within 7 days of the passing of this order. 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.