2016 (8) TMI 1270 - HC - Companies Law

Scheme of Amalgamation - dispensing with the meeting of the equity shareholders and unsecured creditors of the applicant - company - Held that - The applicant has produced certificate dated 31.03.2016 of P.R.Shah & Associates, Chartered Accountants, certifying that all the equity shareholders and the unsecured creditors have given their consent in writing, in approval of the Scheme. The certificate also certifies that there are no secured creditors of the applicant company. It is therefore requested to pass an appropriate order to dispense with the meetings of the equity shareholders and unsecured creditors. Having heard learned counsel for the applicant and considering the fact that all the equity shareholders and the unsecured creditors of the applicant company have given their consent in writing, as required under Section 391(2) of the Act, to the proposed Scheme of Amalgamation, the meetings of the equity shareholders and unsecured creditors of the applicant company are ordered to be dispensed with.

Summary

Issues:
Dispensing with the meeting of equity shareholders and unsecured creditors in a scheme of amalgamation.

Analysis:
The judgment delivered by the High Court pertains to an application filed by a company seeking orders to dispense with the meeting of equity shareholders and unsecured creditors in the context of a scheme of amalgamation involving multiple entities. The applicant, Aatrey Buildcon Private Limited, submitted that all 21 equity shareholders and 12 unsecured creditors of the company have provided their written consent in favor of the proposed scheme. The applicant also presented a certificate from a Chartered Accountant confirming the consent of all equity shareholders and unsecured creditors, along with the absence of any secured creditors. Based on these submissions and in accordance with Section 391(2) of the Act, the Court granted the application and ordered the dispensation of meetings of the equity shareholders and unsecured creditors. The judgment highlights the importance of obtaining consent from relevant stakeholders in schemes of amalgamation and the significance of complying with statutory requirements under the law to facilitate such corporate actions.

In conclusion, the High Court's decision to grant the application and dispense with the meetings of equity shareholders and unsecured creditors underscores the adherence to legal provisions and the necessity of obtaining consent from all relevant parties in schemes of amalgamation. The judgment reflects the Court's consideration of the applicant's submissions, including the certification provided by a Chartered Accountant, to ensure compliance with the requirements outlined in the applicable legislation. This case serves as a reminder of the procedural aspects involved in corporate restructuring activities and the significance of fulfilling statutory obligations to validate such transactions effectively.