Scheme of amalgamation sanctioned after compliance, creditor review, and undertakings on tax treatment and future modifications.

The Bombay HC sanctioned the scheme of amalgamation under Sections 391 to 394 of the Companies Act, 1956 after finding that the requisite corporate approvals were obtained and compliance affidavits were filed. Limited objections by the Regional Director on tax treatment and future modification were met by undertakings that tax consequences would be dealt with according to law and that no modification would be made without leave of the Court. The Official Liquidator reported proper conduct of the transferor company's affairs, and the lone unsecured creditor's objection did not displace the scheme. The Court found the scheme fair, reasonable, lawful, and not prejudicial to shareholders, creditors, or public interest.

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Issues: Whether the Scheme of Amalgamation between the transferor company and the transferee company deserved sanction under Sections 391 to 394 of the Companies Act, 1956, and whether the Scheme was fair, reasonable, lawful, and not prejudicial to shareholders, creditors, or public interest.

Analysis: The requisite corporate approvals had been obtained and the Petition was supported by compliance affidavits. The Regional Director raised limited objections regarding tax consequences and any future modification of the Scheme, both of which were addressed by undertakings that tax issues would be dealt with in accordance with law and that no modification would be made without leave of the Court. The Official Liquidator reported that the affairs of the transferor company had been conducted properly. The solitary unsecured creditor's objection was disputed and did not affect the Scheme, as no compromise or arrangement with creditors was involved. On the record, the Scheme was found to be fair, reasonable, lawful, and not contrary to public policy.

Conclusion: The Scheme of Amalgamation was sanctioned and the petition was allowed.

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