2014 (1) TMI 1780 - HC - Companies Law

Scheme of amalgamation - Held that - Transferor Company No.1 has 02 equity shareholders and 01 preference shareholder. All the shareholders (equity and preference) have given their written consents/NOCs to the proposed Scheme. The written consents/NOCs have been placed on record. The same have been examined and found in order. In view of the foregoing, the requirement of convening the meetings of equity and preference shareholders of Transferor Company No.1, to consider and if thought fit, approve, with or without modifications, the Scheme, is dispensed with. Transferor Company No.1 does not have any secured or unsecured creditor. Therefore, the question of requirement of convening meetings thereof does not arise. Transferor Company No.2 has 02 equity shareholders. Both the equity shareholders have given their written consents/NOCs to the proposed Scheme. The written consents/NOCs have been placed on record. The same have been examined and found in order. In view of the foregoing, the requirement of convening the meeting of the equity shareholders of Transferor Company No.2, to consider and, if thought fit, approve, with or without modification, the proposed Scheme, is dispensed with. Transferor Company No.2 does not have any secured creditor. Therefore, the question of requirement of convening a meeting thereof does not arise. Transferor Company No.2 has 01 unsecured creditor. The sole unsecured creditor has given its written consent/NOC, to the proposed Scheme. The written consent/NOC has been placed on record. The same has been examined and found in order. In view of the foregoing, the requirement of convening the meeting of the unsecured creditor of Transferor Company No. 2, to consider and, if thought fit, approve, with or without modification, the proposed Scheme, is dispensed with. The Transferee Company has 08 equity shareholders. All the equity shareholders have given their written consents/NOCs, to the proposed Scheme. The written consents/NOCs have been placed on record. The same have been examined and found in order. In view of the foregoing, the requirement of convening the meeting of the equity shareholders of the Transferee Company, to consider and, if thought fit, approve, with or without modification, the proposed Scheme, is dispensed with. The Transferee Company does not have any secured or unsecured creditor. Therefore, the question of requirement of convening meetings thereof does not arise.

Issues:
Application under Sections 391 to 394 of the Companies Act, 1956 for scheme of amalgamation.

Detailed Analysis:
1. Jurisdiction: The Applicants filed a joint application under Sections 391 to 394 of the Companies Act, 1956 for the scheme of amalgamation. The registered offices of the Applicants are located within the National Capital Territory of Delhi, establishing the jurisdiction of the Delhi High Court to adjudicate on the matter.

2. Background of Companies: Detailed histories of Transferor Company No.1, Transferor Company No.2, and Transferee Company were provided, including their original incorporation dates, name changes, and share capital structures as of March 31, 2016.

3. Scheme of Amalgamation: The scheme aimed at amalgamating Transferor Company No.1 and Transferor Company No.2 with the Transferee Company. The rationale behind the scheme included simplifying management, cost savings, organizational capability enhancement, and maximizing shareholder value.

4. Share Exchange Ratio: The scheme outlined that no new shares would be issued by the Transferee Company as part of the amalgamation due to the existing shareholding structures and investments among the companies involved.

5. Board Resolutions: The Board of Directors of all three companies unanimously approved the proposed scheme in separate meetings held in September and October 2016, with copies of the resolutions filed with the application.

6. Consent of Stakeholders: The status of equity shareholders, secured and unsecured creditors of the companies, along with their consents, was detailed in a table. Written consents/NOCs were obtained from all relevant stakeholders, and the requirement for convening meetings was dispensed with based on the consents received.

7. Dispensation of Meetings: The application sought dispensation of the requirement to convene meetings of shareholders and creditors, which was granted based on the consents obtained and the absence of creditors in some cases.

8. Final Decision: The High Court allowed the application in the terms presented and disposed of the matter accordingly, approving the scheme of amalgamation as per the details provided in the application.

This detailed analysis covers the key aspects of the judgment, including jurisdiction, company background, scheme of amalgamation, share exchange ratio, stakeholder consents, dispensation of meetings, and the final decision of the High Court.

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