2008 (7) TMI 581 - HC - Companies Law

Amalgamation - Held that - The arrangement for which approval is sought has the concurrence of the applicant s board of directors. It appears to be an internal reorganization of group companies. Considering the facts and circumstances, the court hereby is of the opinion that the request to hold the meetings should be acceded to. It is accordingly directed that a meeting of the unsecured creditors of the transferee-company be held and also the meeting of the shareholders of the applicant company as directed .

Summary

Issues:
1. Application under sections 391(1)-394 of the Companies Act, 1956 seeking directions for meetings of shareholders and unsecured creditors for approval of a scheme of amalgamation.
2. Approval of a proposal for a scheme of amalgamation between multiple companies.
3. Holding meetings of shareholders and unsecured creditors for approval of the scheme.
4. Appointment of Chairpersons and alternate Chairpersons for the meetings.
5. Procedure for conducting the meetings, including quorum requirements and voting by proxy.
6. Fees and incidental expenses for the Chairpersons and alternate Chairpersons.
7. Issuance of directions to ensure fair conduct of the meetings.

Detailed Analysis:
1. The judgment pertains to an application under sections 391(1)-394 of the Companies Act, 1956, filed by M/s. Apeejay Surrendra Hotels (P.) Ltd., seeking directions for meetings of shareholders and unsecured creditors to approve a scheme of amalgamation involving multiple companies. The applicant company's board of directors has approved the composite scheme of arrangement, and relevant documents such as Memorandum, Articles of Association, and balance sheets have been submitted to the court.

2. The scheme involves the amalgamation of the applicant company with other participant companies, outlining the transfer of the applicant company's division to one of the transferee companies. The court notes that the arrangement appears to be an internal reorganization of group companies and has the approval of the applicant's board of directors.

3. The court, after hearing the applicant's counsel and reviewing the materials on record, decides to grant approval for holding meetings of shareholders and unsecured creditors to consider and approve the scheme. The court appoints Chairpersons and alternate Chairpersons for these meetings and sets out detailed instructions for conducting the meetings, including quorum requirements, notice provisions, and publication requirements in newspapers.

4. Specific directions are provided for the meetings of unsecured creditors and shareholders, including the appointment of Chairpersons, quorum requirements based on the number and value of holdings, and the allowance for voting by proxy. In case the quorum is not met, the meeting may be adjourned, and valid proxies are considered for quorum purposes.

5. The judgment specifies the fees for the Chairpersons and alternate Chairpersons, along with their incidental expenses, and mandates the filing of a report within two weeks of the meetings. The Chairpersons are empowered to issue directions to ensure the fair conduct of the meetings, emphasizing a just and free manner of proceedings.

6. Ultimately, the application is disposed of in accordance with the directions provided, with an order for Dasti. The judgment ensures a comprehensive and structured approach to conducting the meetings for the approval of the scheme of amalgamation, safeguarding the interests of shareholders and unsecured creditors while upholding the principles of fairness and transparency in the process.