2016 (5) TMI 495 - HC - Companies Law

Court approves Scheme of Arrangement for company merger ensuring compliance with Companies Act provisions

The court sanctioned the Scheme of Arrangement for the amalgamation of two companies after compliance with statutory requirements, preservation of ... Scheme of Amalgamation - Held that:- Scheme of Arrangement in the nature of amalgamation at Exhibit “C” of the petitions is sanctioned. The prayers made at paragraph11( a) in both the petitions are granted. The petitioners are directed to pay costs of ₹ 7,500/each to Mr.Devang Vyas, learned Assistant Solicitor General of India and the PetitionerTransferor Company is directed to pay costs of ₹ 7,500/to the office of the Official Liquidator. Issues: Sanction of Scheme of Arrangement for amalgamation of two companies, compliance with statutory requirements, preservation of records, disposal of assets, payment of costs.Scheme of Arrangement Sanction:The petitions sought the sanction of a Scheme of Arrangement for the amalgamation of two companies. Previous applications for dispensation of meetings were allowed by the court. The petitions were admitted, and notices were issued to the Regional Director and Official Liquidator. After compliance with publication orders, both authorities filed reports without material objections. The Regional Director's affidavit noted no specific comments from the Income Tax Department or complaints against the petitioner companies. The Official Liquidator's report stated that the affairs of the petitioner company were not conducted prejudicially and directed the preservation of records and compliance with statutory laws. The petitioners undertook to comply with the Official Liquidator's observations and statutory requirements. The court ordered compliance with Companies Act provisions, preservation of records, and statutory liabilities, ultimately sanctioning the Scheme of Arrangement for amalgamation.Compliance and Preservation of Records:The Official Liquidator's report emphasized the need for the petitioner company to preserve its books of accounts, papers, and records without disposal unless approved by the Central Government. The court directed compliance with Section 396(A) of the Companies Act, statutory requirements, and preservation of records to ensure no absolution of statutory liabilities post-sanctioning of the Scheme.Payment of Costs and Disposal of Petitions:The court directed the petitioners to pay costs to the Assistant Solicitor General of India and the Official Liquidator's office. Filing and issuance of drawn-up orders were dispensed with, instructing concerned authorities to act on the order along with the authenticated Scheme and schedule of assets by the Registrar of the High Court of Gujarat within seven days. The petitions were disposed of following the court's orders and compliance with statutory obligations.