Amalgamation sanction under company law depends on procedural compliance, stakeholder consent, and preserved statutory remedies for prior violations.

A scheme of amalgamation under the Companies Act, 2013 is sanctioned where the statutory procedure is complied with, shareholders and creditors approve or meetings are validly dispensed with, notice and advertisement requirements are met, and accounting and valuation support the exchange ratio. Regulatory objections on compliance, appointed date, stamp duty, accounting treatment, and continuing liability can be addressed through undertakings, while statutory authorities retain the right to pursue pre-existing or continuing breaches against the transferee company and responsible directors. On sanction, the scheme provides for vesting of assets and liabilities, issue of shares, continuation of proceedings, and dissolution of the transferor companies without winding up.

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Issues: (i) Whether the proposed Scheme of Amalgamation should be sanctioned under the Companies Act, 2013. (ii) Whether the objections raised by the statutory authorities concerning compliance, appointed date, accounting treatment, stamp duty, and continuing liability required denial of sanction or further directions.

Issue (i): Whether the proposed Scheme of Amalgamation should be sanctioned under the Companies Act, 2013.

Analysis: The petition was presented under Section 232(3) of the Companies Act, 2013. The record showed approval by the boards of the companies, consent of shareholders and creditors, dispensation of meetings under Section 230(1), compliance with notice and advertisement requirements, and no adverse report from the Official Liquidator. The scheme was also supported by accounting certificates and a valuation-based exchange ratio, and the Tribunal found no reason to refuse approval.

Conclusion: The Scheme of Amalgamation was sanctioned, with the appointed date fixed as 1st April 2019, and it became binding on the transferor companies, the transferee company, their shareholders, creditors, and all concerned.

Issue (ii): Whether the objections raised by the statutory authorities concerning compliance, appointed date, accounting treatment, stamp duty, and continuing liability required denial of sanction or further directions.

Analysis: The Regional Director's objections were met by undertakings from the petitioners regarding compliance with Section 232(3)(i), payment of applicable stamp duty, conformity of accounting entries with the applicable accounting standards, service of notices on authorities, and continuation of liabilities after amalgamation. The Tribunal also directed that any statutory breach, including income-tax defaults or violations of the Reserve Bank of India Act, could still be pursued against the transferee company and responsible directors notwithstanding sanction of the scheme.

Conclusion: The objections did not prevent sanction of the scheme, and the Tribunal granted consequential protective directions preserving statutory remedies and liabilities.

Final Conclusion: The amalgamation was approved with consequential vesting, transfer of liabilities, continuation of proceedings, issuance of shares, and dissolution of the transferor companies without winding up upon filing of the certified order.

Ratio Decidendi: A scheme of amalgamation may be sanctioned where the statutory procedure is complied with, stakeholder consent is obtained or meetings are duly dispensed with, and regulatory objections are addressed by binding undertakings and preserving the rights of statutory authorities to proceed for pre-existing or continuing violations.

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