2017 (1) TMI 269 - HC - Companies Law

Delhi High Court approves Companies Act Scheme of Amalgamation creating synergies

The Delhi High Court granted sanction to the Scheme of Amalgamation under sections 391 and 394 of the Companies Act, 1956, filed jointly by the Transferor ... Sanction of the Scheme of Amalgamation - Held that:- No objection has been received to the Scheme of Amalgamation from any other party. By way of affidavit dated 08.11.2016 of Mr. P. Srinivasan, authorized signatory of the Transferor Company and affidavit dated 09.11.2016 of the counsel for the petitioners, it has been averred that neither the petitioners nor their counsel have received any objection pursuant to the citations published in the newspapers on 17.08.2016. In view of the approval accorded by the shareholders and creditors of the petitioners to the proposed Scheme and the report and affidavit filed by the Official Liquidator and the Regional Director, Northern Region, respectively, not raising any objection to the proposed Scheme of Amalgamation, there appears to be no impediment to the grant of sanction to the Scheme of Amalgamation. Hence, sanction is hereby granted to the Scheme of Amalgamation under sections 391 and 394 of the Companies Act, 1956. The petitioners will comply with the statutory requirements in accordance with law. A certified copy of this order, sanctioning the Scheme, be filed with the ROC, within thirty (30) days of its receipt. Issues:1. Petition filed jointly under sections 391 to 394 of the Companies Act, 1956 seeking sanction of the Scheme of Amalgamation.Analysis:The petition was filed jointly by the Transferor Company and the Transferee Company under sections 391 to 394 of the Companies Act, 1956, seeking the sanction of the Scheme of Amalgamation. The Transferor Company and the Transferee Company were collectively referred to as the Petitioners in the case. Both companies had their registered offices in New Delhi, falling under the jurisdiction of the Delhi High Court.The Transferor Company was incorporated on 12.11.2007, while the Transferee Company was incorporated on 05.12.2000, with subsequent name changes. The authorized share capital and details of both companies were provided in the judgment. The petitioners submitted that the proposed amalgamation would result in pooling of resources, creating better synergies, and greater economies of scale, among other benefits. The Share Exchange Ratio specified in the scheme indicated that no consideration would be payable by the Transferee Company due to the Transferor Company being its wholly owned subsidiary.The Board of Directors of both companies had unanimously approved the proposed Scheme of Amalgamation in meetings held on 07.12.2015. Earlier, the requirement of convening meetings of shareholders and creditors of both companies had been dispensed with by the Court through an order dated 19.07.2016. The Official Liquidator and the Regional Director had filed reports supporting the scheme, with no objections raised.Considering the approvals received from shareholders, creditors, Official Liquidator, and Regional Director, the Court granted sanction to the Scheme of Amalgamation under sections 391 and 394 of the Companies Act, 1956. The order directed compliance with statutory requirements and filing a certified copy of the order with the Registrar of Companies within thirty days. The order also specified compliance with all provisions of the Scheme and warned against violations of any enactment or regulation.The order further directed the dissolution of the Transferor Company without winding up and clarified that it did not grant exemptions from stamp duty, taxes, or other charges. The Petitioners were instructed to deposit a sum of &8377; 1,00,000/- as costs within two weeks. The Petition was allowed and disposed of accordingly.