Michelin India Private Limited v. Michelin India Tamil Nadu Tyres Private Limited:

According to the petitioner transferee Company, it was incorporated under the Companies Act, 1956. A copy of the Memorandum and Articles of Association is marked as Annexure-1. The Authorised Share Capital as on 31.03.2014 is Rs. 25,00,00,00,000/-, 2,50,00,00,000 equity shares of Rs. 10 each. Issued, Subscribed and Paid-up Share Capital of the petitioner Company as on 31.03.2014 is Rs. 21,02,28,03,310/-, 2,10,22,80,331 equity shares of Rs. 10 each. The Transferee Company has issued 50,70,00,000 equity shares and 15,99,99,999 equity shares of Rs. 10 each to its holding company on 22.07.2014 and 23.09.2014. The authorised capital has been increased to 5,00,00,00,000 equity shares of Rs. 10 each on 18.06.2014. A copy of respective E-Forms filed with ROC for allotment of such equity shares is annexed as Annexure-2. A copy of the latest financial statement as on 31.03.2014 is marked as Annexure-3. The Board of Directors as its meeting held on 13.10.2014 approved the Scheme of Amalgamation, subject to confirmation by this Court. A copy of the said Board Resolution is marked as Annexure-4. Under the Scheme, the entire undertaking of the Transferor Company would stand transferred to the Transferee Company on and from 01.04.2014. The Scheme of Amalgamation is marked as Annexure-5. Pursuant to this Scheme, the Transferee Company shall issue and allot equity shares of Rs. 10/- each, as fully paid-up at par to each shareholder of the Transferor Company in the ratio of 26 equity shares of Rs. 10 each fully paid-up of the Transferee Company to be issued for every ten equity shares of Rs. 10 each fully paid-up of the Transferor Company, held by the shareholder. The original valuation report is marked as Annexure-6. The Transferee Company has no secured creditors.

Further the learned Senior Counsel for the petitioners, for the proposition that Section 391 of the Companies Act invests the Court with wide powers to approve or sanction a Scheme of Amalgamation and in doing so, if there are any other things for effectuation, require a special procedure to be followed, then the Court has power to sanction it, while sanctioning the Scheme itself, relied on the judgment of this Court which has held as follows:—

The Regional Director also in paragraphs 9 and 10 of the affidavit, raised objection against change of name of the transferee company to M/s. Eye Foundation Ltd., which is the name of the transferor company, on the strength of two circulars issued by the Ministry of Corporate Affairs on May 30, 2011 and My 8, 2011, in this regard. In my considered view, the same is inapplicable to the case in hand as the name sought to be adopted by the transferee company is the name of the transferor company and the relevant provisions of law applicable to the change of name are sections 21 and 23 of the Companies Act. Our High Court, Karnataka and Bombay High Courts, in the following cases cited on the side of the petitioner, dispensed with the compliance of Section 21 on the ground that Section 391 of the Companies Act invests the court with powers to approve or sanction a scheme of amalgamation/arrangement and in doing so, if there are any other things which for effectuation, require a special procedure to be followed except reduction of capital, then the court has power to sanction them, while sanctioning the scheme itself and section 391 is a complete code in the nature of a “single window clearance” system.

The High Court has in its judgment, dealt with the objection regarding change of name and necessity for compliance of Sections 21 and 23 of the Companies Act which reads as follows:—

It may be noted that as per clause 15 of the scheme, upon the scheme becoming effective, the name of the transferee company shall be changed to Mehala Machines India P. Ltd. Normally but for the scheme presented under section 391 of the Companies Act to effect such a change in the name of a company, the procedure, under section 21 of the Companies Act has to be complied with and also the provisions of section 44 of the Companies Act. However, in terms of the scheme passed by the requisite majority as laid down under section 391 of the Act complying with the procedure, laid down thereon, I do not find that there exists any necessity to have a repeated exercise of the same in terms of section 21 of the Act. It may be noted that Chapter V is a complete code by itself on the subject of arrangement/compromise and reconstruction comprehensive enough to include a change in the name consequent on the amalgamation or arrangement. Similar view was taken by this court in the matter of K.P.R. Mill P. Ltd. Thus, the objection raised by the Regional Director is satisfactorily explained.”

Relying on the above decision, learned Senior Counsel for the petitioners would submit that in terms of the Scheme passed by the requisite majority as laid down under Section 391 of the Companies Act complying with the procedure laid down thereon, there does not exist any necessity to have a repeated exercise of the same in terms of Section 21 of the Act as amended by Section 13 of the 2013 Act.

Thus the court allows the company’s petition of amalgamation.