2016 (1) TMI 1315 - HC - Companies Law

Scheme of amalgamation - dispensation of the requirement to convene meeting of its shareholders, secured and unsecured creditors - Held that - A prayer has been made to dispense with the requirement of convening the meetings of the equity shareholders and the creditors (i.e. the secured and unsecured creditors) of the transferee company. The letters of consent submitted by the shareholders have been seen and examined. They are found in order. Similarly, letters of consent issued by the creditors (i.e. secured and unsecured) have been seen and are found in order. Given the fact that all shareholders and creditors (i.e. the secured and unsecured creditors) of the transferee company have given their consent and/or No Objection (NOC) to the proposed scheme, there shall be no requirement to convene the meetings, as prayed. The application stands allowed in the aforesaid terms.

Summary

Issues:
Application for dispensation of shareholder and creditor meetings under Sections 391 and 394 of the Companies Act, 1956 for a proposed amalgamation scheme.

Analysis:
The judgment pertains to a first motion application by Allengers Global Healthcare Private Limited seeking dispensation of the requirement to convene meetings of its shareholders and creditors under Sections 391 and 394 of the Companies Act, 1956 for a proposed scheme of amalgamation involving two transferor companies. The proposed scheme involves the merger of Eros Fabricators Private Limited and Lakshya Research & Development Private Limited into the transferee company. The affidavit filed in support of the application justifies the necessity for the amalgamation, outlining the benefits and salient features of the scheme, including the transfer of assets and liabilities, continuity of employment for existing employees, and the appointed date for the scheme. The proposed scheme has been unanimously approved by the Board of Directors of all companies involved.

The jurisdiction of the Delhi High Court to deal with the application is established as the registered office of the transferee company is located in the National Capital Territory of Delhi. The application confirms that no proceedings under Sections 235 to 351 of the Act are pending against the transferee company. Additionally, consents from equity shareholders, secured, and unsecured creditors of the transferee company have been obtained and are found to be in order, as evidenced by the table provided in the application. All shareholders and creditors have given their consent or No Objection to the proposed scheme, leading the court to allow the application for dispensation of meetings as prayed for.

In conclusion, the Delhi High Court, presided over by Hon'ble Mr. Justice Rajiv Shakdher, allows the application for dispensation of shareholder and creditor meetings for the proposed amalgamation scheme, given the unanimous approval of the scheme by the Board of Directors and the consents obtained from all relevant stakeholders. The judgment ensures compliance with the Companies Act, 1956 and affirms the validity of the proposed amalgamation without the need for convening formal meetings, as all necessary approvals have been obtained.