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2010 Supreme(Mad) 3307
High Court of Judicature at Madras
THE HONOURABLE MR. JUSTICE P. JYOTHIMANI
Laurel Aromatics Private Limited & Another
Versus
……………..
C.P.Nos.85 & 86 of 2010
Decided on: 05-08-2010
For the Appearing Parties:R. Rajesh, Advocate, R. Vidya, ACGSC for Regional Director Ministry of Corporate Affairs Chennai, M. Jayakumar, Deputy Official Liquidator.
Statutory powers under the Companies Act, 1956, and previous court decisions allow for the approval of a scheme of amalgamation, even in the absence of a specific clause on amalgamation in the Memorandum of Association of the transferee company.
Headnote:
Companies Act - Amalgamation - Sections 391, 394 - The court approved the scheme of amalgamation of the transferor company with the transferee company, despite the absence of a specific clause on amalgamation in the Memorandum of Association of the transferee company. The court relied on statutory powers under the Companies Act, 1956, and previous court decisions to approve the scheme.
Fact of the Case:
The company petitions were filed under sections 391 to 394 of the Companies Act, 1956 for sanctioning the scheme of amalgamation of the transferor company with the transferee company. The transferor and transferee companies obtained individual consent affidavits from equity shareholders, and the Official Liquidator raised an objection regarding the absence of a specific clause on amalgamation in the Memorandum of Association of the transferee company.
Finding of the Court:
The court found that the absence of a specific clause on amalgamation in the Memorandum of Association of the transferee company did not impede the approval of the scheme of amalgamation. The court relied on statutory powers under the Companies Act, 1956, and previous court decisions to approve the scheme.
Issues: The main issue was whether the absence of a specific clause on amalgamation in the Memorandum of Association of the transferee company would hinder the court's approval of the scheme of amalgamation.
Ratio Decidendi: The court held that statutory powers under the Companies Act, 1956, and previous court decisions allowed for the approval of the scheme of amalgamation, even in the absence of a specific clause on amalgamation in the Memorandum of Association of the transferee company.
Final Decision: The court approved the scheme of amalgamation of the transferor company with the transferee company, as the procedure laid down under Sections 391 and 394 of the Companies Act was duly complied with. The transferor company was ordered to stand dissolved without winding up.
1. These company petitions are preferred under sections 391 to 394 of the Companies Act, 1956 for sanctioning the scheme of amalgamation of the transferor company with the transferee company with effect from 1st April 2009.
2. M/s. Laurel Aromatics Private Limited, the petitioner in C.P.No.85 of 2010 is the transferor company. The main objects of the transferor company, as stated in the Memorandum of Association, are narrated in paragraph (5) of the said petition and the Memorandum of Association is enclosed as Annexure (1) to the said petition.
3. M/s. Contract Point Impex (India) Private Limited, the petitioner in C.P.No.86 of 2010 is the transferee company. The main objects of the transferee company, as stated in the Memorandum of Association, are narrated in paragraph (5) of the said petition and the Memorandum of Association is enclosed as Annexure (1) to the said petition.
4. In the meeting held on 12.2.2010, the Board of Directors of the transferor company, the petitioner in C.P.No.85 of 2010, considered and approved the scheme of amalgamation of the transferor company with the transferee company, the petitioner in C.P.No.86 of 2010. Copy of the Board resolution is enclosed as Annexure (4). The scheme of amalgamation is enclosed as Annexure (5).
5. As regards the transferee company, in the meeting held on 12.2.2010, the Board of Directors of the petitioner in C.P.No.86 of 2010, considered and approved the scheme of amalgamation of the transferee company with the transferor company, the petitioner in C.P.No.85 of 2010. Copy of the Board Resolution is enclosed as Annexure (3). The scheme of amalgamation is enclosed as Annexure (4).
6. As far as the transferor company is concerned, as per the Auditor Certificate, the transferor Company has no secured creditors and the copy of the Auditor Certificate is enclosed as Annexure (8). In so far as the transferee company, the petitioner in C.P.No.86 of 2010 is concerned, there are two secured creditors as per Annexure (7) and they have given consent for the scheme of amalgamation as per Annexure (8).
7. The transferor company, the petitioner in C.P.No.85 of 2010, obtained individual consent affidavits from the equity shareholders. Based on these affidavits, this Court, by order dated 30.3.2010 in C.A.No.722 of 2010, dispensed with the convening and holding of the meeting of the equity shareholders of the transferor company for sanctioning the scheme of amalgamation.
8. As regards the transferee company, the petitioner in C.P.No.86 of 2010, individual consent affidavits from equity shareholders have been obtained. Based on these affidavits, this Court, by order dated 30.3.2010 in C.A.No.723 of 2010, dispensed with the convening and holding of the meeting of the equity shareholders of the transferee company for sanctioning the scheme of amalgamation.
9. The Official Liquidator has filed his report along with the report of the Chartered Accountant. The report of the chartered accountant states that the affairs of the transferor company have not been conducted in a manner prejudicial to the interest of its members or creditors or to public interest and they do not come across any act of misfeasance by the Directors attracting the provisions of Sections 542 and 543 of the Companies Act, 1956. However, the Official Liquidator in the report has raised a pertinent objection which is to the effect that the Memorandum of Association of the transferee Company does not have a specific clause on amalgamation.
10. On a reference to the Memorandum of Association of the transferor company, it is clear that as per Clause 30, the transferor company is enabled to amalgamate with any company or companies having objects altogether or in part similar to those of the transferor company. However, it is true that in the Memorandum of Association of the transferee company, there is no corresponding clause enabling it to enter into amalgamation.
11. The issue as to whether the absence of such ena
