2016 (2) TMI 1122 - HC - Companies Law

Scheme of amalgamation - Held that - The transferor companies have consents of all equity shareholders and unsecured creditors. It is averred that the transferor companies do not have any secured creditors. This statement is taken on record. In so far as the transferee company is concerned, it has consent of 26 out of 28 equity shareholders and 79 out of 152 unsecured creditors. In terms of value, 96.36% of the equity shareholders have given their consent. As regards, consents obtained in numbers, 92.86% of the total number of shareholders have given their consent. In so far as the unsecured creditors are concerned, in terms of value 91.76% have given their consent which, in numbers, works out to 51.97%.As regards, secured creditors of the transferee company, all have given their consent. Having regard to the aforesaid, the prayers made in the joint application are allowed. The requirement to convene meetings of equity shareholders and unsecured creditors of the transferor companies is dispensed with, since all consents are in place. Similarly, the prayer made for dispensing with the meetings of the equity shareholders, secured and unsecured creditors of the transferee company is allowed as well. The reason that I am dispensing with the meetings of the equity shareholders and the unsecured creditors of the transferee company, is that, in terms of value, those who have given their consent are more than 3/4th of the total value of the paid up equity share capital and the total amount outstanding qua the unsecured creditors, as on 31.03.2015.

Summary

Issues:
Application under Section 391 and 394 of the Companies Act, 1956 for scheme of arrangement.

Analysis:
The judgment pertains to a joint application under Section 391 and 394 of the Companies Act, 1956 for a scheme of arrangement involving the amalgamation of multiple transferor companies with a transferee company and subsequent re-arrangement/reduction of share capital. The registered office of all companies is within the territorial jurisdiction of the court. The application details the authorized, issued, subscribed, and paid-up capital of the involved companies. It is noted that there are no pending proceedings under Sections 235 to 251 of the 1956 Act against the applicants.

Regarding consents obtained, the transferor companies have secured consent from all equity shareholders and unsecured creditors, with no secured creditors. The transferee company has obtained consent from 26 out of 28 equity shareholders and 79 out of 152 unsecured creditors. The court notes that a significant majority of equity shareholders and unsecured creditors have provided their consent both in terms of value and numbers. Additionally, all secured creditors of the transferee company have given their consent.

Based on the consents received, the court allows the prayers made in the joint application. It dispenses with the requirement to convene meetings of equity shareholders and unsecured creditors of the transferor companies, as all necessary consents are in place. Similarly, meetings of equity shareholders, secured, and unsecured creditors of the transferee company are also dispensed with. The court justifies this decision by highlighting that the consenting parties represent more than 3/4th of the total value of paid-up equity share capital and outstanding amount owed to unsecured creditors as of a specified date.

Conclusively, the court disposes of the application in the aforementioned terms, approving the scheme of arrangement based on the consents obtained from the concerned parties.