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Section 394 - Amalgamation of companies

Court :

Brief :
Merger of authorized capitals of companies - Increase of authorized capital of the transferee company - Whether registration fees to be paid on the increased capital - Held, No.

Citation :

Brief Facts : In a petition seeking amalgamation, the Single Judge had held that clause 11.7 of the scheme to be deleted and replaced Legal World in the manner indicated in the said judgment and further provided that increase of authorized share capital of the transferee-company would be effective only upon the transferee-company paying the requisite registration fees as provided in Schedule x to the Companies Act, 1956 (‘the Act’).Appellants appealed against the said judgment. Decision : Appeal allowed. Reasons : After analyzing all the decisions cited before us, we come to the conclusion that the submission made by the appellants has substance. Further, we find no reason to support the order so passed by the Hon’ble first court with utmost respect to his lordship in view of the decisions and the law settled by the different High Courts on that point. Furthermore, we find that the reasoning given in those decisions cannot raise any question to express a different view. We, accordingly, allow the appeal and direct that it is not necessary to pay any fee for giving any effect to the increase in the authorized share capital of the transferee-company pursuant to the said scheme and we also direct that it is not necessary to delete clause 11.7 as directed by the humble first court and accordingly the scheme is approved without substituting clause 11.7 thereof.

CA CS CIMA Prakash Somani
on 15 January 2009
Published in Corporate Law
Views : 8520
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