Case Note & Summary
The High Court of Bombay considered two company scheme petitions seeking sanction of a composite scheme of arrangement and amalgamation. The transferor company, Sterling Holiday Resorts (India) Ltd. (SHRIL), was a listed public company engaged in vacation ownership. The resulting companies were Thomas Cook Insurance Services (India) Ltd. (TCISIL) and Thomas Cook (India) Ltd. (TCIL). The scheme involved the amalgamation of SHRIL with TCISIL and TCIL, along with a reduction of capital. The court noted that all statutory requirements under the Companies Act, 1956 and the Companies Act, 2013 were complied with. Meetings of shareholders and creditors were held, and the scheme was approved by the requisite majorities. The Regional Director and the Income Tax Department filed their reports and raised no objections. The court found the scheme to be fair, reasonable, and not contrary to public interest. Accordingly, the court sanctioned the scheme, with directions for compliance with applicable stamp duty and filing requirements. The petitions were disposed of accordingly.
Headnote
A) Company Law - Scheme of Arrangement and Amalgamation - Sanction of Scheme - Sections 391-394, 100-103 Companies Act, 1956 and Section 52 Companies Act, 2013 - The petitions sought sanction of a composite scheme involving amalgamation of Sterling Holiday Resorts (India) Ltd. with Thomas Cook Insurance Services (India) Ltd. and Thomas Cook (India) Ltd., along with reduction of capital - The court found that all statutory requirements were complied with, meetings of shareholders and creditors were held, and no objections were raised by the Regional Director or Income Tax Department - Held that the scheme is fair, reasonable, and not contrary to public interest, and accordingly sanctioned the scheme (Paras 1-8).
Issue of Consideration
Whether the composite scheme of arrangement and amalgamation between the transferor company and two resulting companies should be sanctioned under Sections 391 to 394 of the Companies Act, 1956 read with Sections 100 to 103 and Section 52 of the Companies Act, 2013.
Final Decision
The court sanctioned the composite scheme of arrangement and amalgamation, with directions for compliance with stamp duty and filing requirements. The petitions were disposed of.
Law Points
- Scheme of arrangement
- amalgamation
- reduction of capital
- sanction of scheme
- compliance with statutory requirements
- no objection from authorities
Case Details
2015 LawText (BOM) (07) 223
Company Scheme Petition No. 99 of 2015 with Company Summons for Direction No. 892 of 2014 and Company Scheme Petition No. 100 of 2015 with Company Summons for Direction No. 891 of 2014
Mr.Janak Dwarkadas, Senior Advocate with Mr.Rohan Rajadhyaksha i/b. M/s.Rajesh Shah & Co. for Petitioners; Mr.Shyam Mehta, Senior Advocate with S.I. Shah for Regional Director; Mr.Arvind Pinto for Income-tax Department / Revenue
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Nature of Litigation
Petitions seeking sanction of a composite scheme of arrangement and amalgamation under the Companies Act.
Remedy Sought
Sanction of the composite scheme of arrangement and amalgamation between Sterling Holiday Resorts (India) Ltd., Thomas Cook Insurance Services (India) Ltd., and Thomas Cook (India) Ltd.
Filing Reason
To obtain court approval for the amalgamation and reduction of capital as per the scheme.
Issues
Whether the composite scheme of arrangement and amalgamation should be sanctioned under Sections 391 to 394 of the Companies Act, 1956 read with Sections 100 to 103 and Section 52 of the Companies Act, 2013.
Submissions/Arguments
Petitioners submitted that all statutory requirements were complied with, meetings were held, and the scheme was approved by requisite majorities.
Regional Director and Income Tax Department filed reports with no objections.
Ratio Decidendi
The scheme of arrangement and amalgamation, being fair, reasonable, and not contrary to public interest, and having complied with all statutory requirements, is entitled to sanction under Sections 391 to 394 of the Companies Act, 1956 read with Sections 100 to 103 and Section 52 of the Companies Act, 2013.
Judgment Excerpts
These petitions seek sanction of a composite scheme of arrangement and amalgamation of Sterling Holiday Resorts (India) Ltd. (SHRIL), which is a transferor company, with Thomas Cook Insurance Services (India) Ltd. (TCISIL), which is a resulting company (Resulting Company No.1) and Thomas Cook (India) Ltd. (TCIL) which is another resulting company (Resulting Company No.2), and their respective shareholders and creditors.
Procedural History
The petitions were filed seeking sanction of the scheme. Meetings of shareholders and creditors were held and the scheme was approved. Reports from Regional Director and Income Tax Department were received with no objections. The court heard the petitions and passed the order on 2 July 2015.
Acts & Sections
- Companies Act, 1956: Sections 391, 392, 393, 394, 100, 101, 102, 103
- Companies Act, 2013: Section 52
