2015 (11) TMI 1695 - HC - Companies Law

Scheme of amalgamation - Held that - Dispense with the requirement of convening the meetings of their equity shareholders, preference shareholders, secured and unsecured creditors to consider and approve, with or without modification, the proposed Scheme of Amalgamation, The Board of Directors of the transferor and transferee companies in their separate meetings held on 10th August, 2015 have unanimously approved the proposed Scheme of Amalgamation. Copies of the Resolutions passed at the meetings of the Board of Directors of the transferor and transferee companies have been placed on record.

Summary

Issues involved:
Application under Sections 391 to 394 of the Companies Act, 1956 seeking directions to dispense with the requirement of convening meetings of equity shareholders, preference shareholders, secured and unsecured creditors for approving the Scheme of Amalgamation.

Detailed Analysis:

1. Incorporation and Jurisdiction:
The joint application under Sections 391 to 394 of the Companies Act, 1956 was filed by the applicant companies for the proposed Scheme of Amalgamation. Both the transferor and transferee companies are situated in New Delhi, within the jurisdiction of the Delhi High Court.

2. Company Details:
The transferor company was originally incorporated in Punjab and later shifted its registered office to Delhi. The transferee company was incorporated in Delhi. Detailed information regarding the authorized share capital, issued, subscribed, and paid-up share capital of both companies was provided in the judgment.

3. Scheme of Amalgamation:
The Scheme of Amalgamation aimed to merge Boom Investments Private Limited (transferor company) with Mohair Investment and Trading Company Private Limited (transferee company). The salient features of the Scheme included simplifying promoter holdings, reducing administrative costs, enhancing executive control, operational synergy, and optimal resource utilization.

4. Share Exchange Ratio:
The Scheme outlined the share exchange ratio, where the transferee company would issue shares to the shareholders of the transferor company based on a specified ratio for equity shares and preference shares.

5. Board Approval and Shareholders' Consents:
The Board of Directors of both the transferor and transferee companies unanimously approved the proposed Scheme of Amalgamation. Consents and no objections in writing were obtained from equity shareholders, preference shareholders, and unsecured creditors of both companies. The consents were found to be in order, and the requirement for convening meetings of shareholders and creditors was dispensed with.

6. Secured Creditors:
As of July 31, 2015, there were no secured creditors for either the transferor or transferee company, further simplifying the amalgamation process.

7. Conclusion:
Based on the detailed analysis and compliance with legal requirements, the High Court allowed the application under Sections 391 to 394 of the Companies Act, 1956, thereby approving the Scheme of Amalgamation between the two companies.