Shareholder approval is essential for amalgamation schemes; sanction fails where one included company has not secured the required majority.

A scheme of amalgamation under Sections 230 to 232 of the Companies Act, 2013 could not be sanctioned where one company included in the wider scheme had not secured the requisite shareholder approval. Although the petitioner companies had convened meetings and obtained approvals, the shareholders of Digi Content Limited did not approve the proposed scheme by the required majority. Because the scheme before the Tribunal still encompassed all originally proposed amalgamating companies, sanction was refused and the company scheme petition was rejected.

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Issues: Whether the proposed scheme of amalgamation between the petitioner companies could be sanctioned when one of the companies involved in the wider scheme had not obtained the requisite shareholder approval.

Analysis: The petition sought sanction under Sections 230 to 232 of the Companies Act, 2013 for amalgamation of the petitioner companies. The record showed that although the relevant meetings were convened and approvals were obtained in respect of the petitioner companies, the shareholders of Digi Content Limited, which formed part of the larger scheme placed before the Tribunal, did not approve the scheme by the requisite majority. In these circumstances, sanction could not be granted to a scheme that still encompassed all the companies originally proposed for amalgamation.

Conclusion: The proposed scheme of amalgamation could not be sanctioned.

Final Conclusion: The company scheme petition was rejected for want of merit, leaving the proposed amalgamation unsanctioned.

Ratio Decidendi: A scheme of amalgamation cannot be sanctioned where a company included in the scheme has not secured the requisite statutory shareholder approval.

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