2009 (3) TMI 1059 - HC - Companies Law

Summary

Issues Involved:
1. Dispensation of meetings for promoter/majority equity shareholder and creditors.
2. Approval of the scheme of amalgamation.
3. Directions for convening meetings of minority equity shareholders.

Summary:

1. Dispensation of Meetings for Promoter/Majority Equity Shareholder and Creditors:

(1.) This joint application has been filed u/s 391 of the Companies Act, 1956, by the applicant-companies seeking directions of this Court to dispense with the requirement of convening the meetings of the promoter/majority equity shareholder of the transferor company and secured and unsecured creditors of the transferor and transferee companies.

(8.) The transferor company has no secured creditor and has 13 unsecured creditors, whereas the transferee company has 5 secured creditors and 39 unsecured creditors. A direction is sought to dispense with the requirement of convening the meetings of the secured and unsecured creditors of the transferor and transferee companies to seek their approval to the proposed scheme of amalgamation.

(9.) Learned senior counsel for the applicants submits that the scheme of amalgamation does not contemplate any compromise or arrangement with the secured and unsecured creditors and does not provide for any variation in the amounts owed or payable to them. The petitioner-companies undertake that upon notice being issued by this Court on the confirmation petition, it shall issue notice to the secured and unsecured creditors inviting objections, if any, to the scheme.

(12.) In view of the statutory provision and judicial pronouncements, the Court finds merit in the prayer for dispensation of the meeting of the creditors. The undertaking given on behalf of the applicant-companies is accepted, and the requirement of convening the meetings of the secured and unsecured creditors is dispensed with.

2. Approval of the Scheme of Amalgamation:

(6.) A copy of the scheme of amalgamation has been filed on record, detailing that the amalgamation will streamline operations, enhance operational efficiency, and maximize shareholder value. The scheme provides for a cash consideration of Rs. 110 for every fully paid-up equity share of the transferor company held by the minority shareholders.

(10.) The scheme proposes that with effect from the appointed date, the amalgamating company, together with all its properties, assets, rights, benefits, and interests, shall be vested in the amalgamated company as a going concern, without any further deed or act, subject to the provisions of the scheme and in accordance with Sections 391, 394 of the Act.

(11.) Reliance is placed on judicial precedents where courts have dispensed with the requirement of convening the meeting of the creditors on similar grounds. The Court accepts the submissions and finds merit in the prayer for dispensation of the meeting of the creditors.

3. Directions for Convening Meetings of Minority Equity Shareholders:

(13.) The transferor company has approximately 7,143 equity shareholders. GE Capital (Mauritius) Investment Co. Ltd. (GECMIC) holds 92.74% of the paid-up equity share capital and has given its consent to the scheme. The meeting of the minority equity shareholders holding 7.26% of the equity share capital is directed to be held on May 2, 2009, at Air Force Auditorium, New Delhi. The quorum for the meeting shall be five members present in person.

(14.) The transferee company has seven equity shareholders, and their meeting is directed to be held on May 2, 2009, at Air Force Auditorium, New Delhi. The quorum for the meeting shall be three members present in person.

(15.) Notices for convening the meetings along with copies of the scheme and statement u/s 393 of the Companies Act, 1956, shall be sent to the minority equity shareholders and equity shareholders of the transferee company by UPC at least 21 days before the meeting date. Notice of the meetings shall also be published in newspapers.

(16.) The chairpersons and alternate chairpersons will ensure that the meetings are conducted in a just, free, and fair manner. The fee for the chairpersons and alternate chairpersons is fixed, and they will file their reports within two weeks from the date of the meetings.

(17.) The application stands allowed in the aforesaid terms.