Scheme of Arrangement approved after shareholder consent, no prejudice to creditors, and no RBI approval needed for non-NBFC entities.

Sanction was granted to a Scheme of Arrangement and amalgamation where the equity shareholders and creditors had approved the proposal, the Official Liquidator reported no prejudice to members, creditors or the public interest, and the court found the Regional Director's objections answerable. Pending balance-sheet filings were accepted as capable of completion, and the companies were held not to be NBFCs, so RBI approval was not required. With no opposition from any other quarter, the scheme was approved and the transferor companies were directed to stand dissolved on the scheme taking effect.

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Issues: Whether sanction should be granted to the proposed Scheme of Arrangement and amalgamation between the petitioner companies.

Analysis: The petitioners had obtained approval of the equity shareholders and creditors, and the Official Liquidator reported no complaint and no prejudice to the interests of members, creditors, or the public interest. The Regional Director raised objections regarding filing of balance sheets, alleged violation of section 137 of the Companies Act, 2013, and the requirement of RBI permission on the assumption that certain transferor companies were NBFCs. The Court accepted the petitioners' explanation that the pending filings would be completed, and on the material placed, held that the companies were not NBFCs and no RBI approval was required. With the objections thus answered and no opposition from any other quarter, no impediment remained to approval of the scheme.

Conclusion: Sanction was granted to the Scheme of Arrangement under Sections 391 and 394 of the Companies Act, 1956, and the transferor companies were directed to stand dissolved on the scheme becoming effective.

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