2016 (8) TMI 1279 - HC - Companies Law

Composite Scheme of Arrangement - Held that - This Court dispensed with the requirement of convening meeting of the Equity Shareholders, Preference shareholders and Secured Creditors of the petitioner Company, who had given their consent to the proposed Scheme. The meetings of the Unsecured Creditors were dispensed with in view of the fact that no sacrifice is called for from the creditors and no compromise is offered to any of the Unsecured Creditors and neither any liability of the Unsecured Creditors under the Scheme is being reduced or extinguished. Petition is admitted.

Summary

Issues:
Sanction of Composite Scheme of Arrangement between two companies and their shareholders and creditors.

Analysis:
The High Court of Gujarat heard a petition filed by Shalby Limited seeking approval for a Composite Scheme of Arrangement with another company and their stakeholders. The court noted that meetings of Equity Shareholders, Preference Shareholders, and Secured Creditors were dispensed with as they had consented to the proposed Scheme. Unsecured Creditors' meetings were also waived since no sacrifices were required from them, and no reduction or extinguishment of their liabilities was involved. In light of these circumstances, the court made the following orders: (i) Admission of the petition, (ii) Scheduling the final hearing for 9.9.2016, (iii) Publication of the petition notice in specified Gujarati and English newspapers, (iv) Notifying the Central Government as per Section 394(A) of the Companies Act, 1956, through the Regional Director, (v) Permitting direct service in addition to the regular mode of service, and (vi) Dispensing with the notice in the Government Gazette.