2008 (2) TMI 635 - HC - Companies Law

Amalgamation- Held that - The applicant/transferee company and Transferor company have also filed the scheme of amalgamation and salient features of the amalgamation have been incorporated and detailed in the application.The applicant company has stated that no proceedings under sections 235 to 251 of the Act are pending against the Transferor company and Transferee company. Direction to commence meetings of Shareholders, Secured and unsecured creditors as required.

Summary

Issues: Application under sections 391(1), 393, and 394 of the Companies Act, 1956 for directions on convening meetings of equity shareholders, secured and unsecured creditors for sanctioning a scheme of arrangement for amalgamation.

Equity Shareholders Meeting:
The applicant, seeking directions for meetings of equity shareholders, secured, and unsecured creditors for amalgamation, had all equity shareholders consent to the scheme of arrangement, justifying the dispensation of a formal meeting. The applicant company's details, resolutions passed, and financial information were provided, demonstrating compliance with statutory requirements. The authorized and paid-up share capital of both the transferee and transferor companies were outlined, along with the absence of pending proceedings under relevant sections of the Act against either company.

Secured Creditors Meeting:
For the meeting of secured creditors, the court appointed a Chairperson and an Alternate Chairperson, setting the date, time, and location for the meeting. The quorum and notice requirements were specified, emphasizing the need for proper communication and publication in newspapers. Proxy voting was permitted, subject to timely submission of prescribed forms, and the Chairpersons' fees and responsibilities were detailed, including the obligation to file a report post-meeting.

Unsecured Creditors Meeting:
Similarly, a Chairperson and an Alternate Chairperson were appointed for the meeting of unsecured creditors, with specific quorum and notice conditions outlined. Proxy voting procedures, fees for Chairpersons and Alternate Chairpersons, and their reporting obligations were reiterated. The directive allowed the Chairpersons to issue management-related directions to ensure a fair and just conduct of the meeting.

Overall Decision:
The application under sections 391(1), 393, and 394 of the Companies Act, 1956 was allowed, granting directions for convening meetings of equity shareholders, secured, and unsecured creditors for the scheme of arrangement for amalgamation. The judgment emphasized compliance with statutory requirements, proper communication, proxy voting provisions, and the responsibilities of appointed Chairpersons and Alternate Chairpersons to ensure fair conduct and reporting of the meetings.