2015 (12) TMI 1712 - HC - Companies Law

Scheme of demerger - directions to convene meeting of the Equity Shareholders Demerged Company/ Petitioner Company I) and dispensation of meetings of the secured and unsecured creditors of the Demerged Company and Equity Shareholders, secured and unsecured creditors of Resulting Company/ Petitioner Company II - The meeting shall be conducted strictly in accordance with law and after due notification/notice to all concerned including publication in the newspapers namely Indian Express (English) and Jan Satta (Hindi) , both Delhi/NCR Editions, and publication in the Official Gazette of Government of Haryana. Notice of the meeting of the equity shareholders of the Petitioner Company-I shall be issued at least 21 days before the date of proposed meeting. Individual notices be also sent to the Equity Shareholders of the company through post - The scheme put up in the meeting of the Equity Shareholders shall be approved/ decided by the majority in number and by minimum 75% in value of the equity shareholders present and voting either in person or proxy.

Issues:
1. Direction to convene meeting of Equity Shareholders of Demerged Company and Resulting Company.
2. Dispensation of meetings of secured and unsecured creditors.
3. Confirmation of no investigations or proceedings under Sections 235 to 251 of the Companies Act, 1956.
4. Appointment of Chairman and Co-Chairman for the Equity Shareholders meeting.
5. Reporting and verification of the meeting results to the Court.
6. Conducting the meeting in accordance with the law and notification requirements.

Analysis:

1. Direction to convene meeting of Equity Shareholders:
The petition under Section 391-394 of the Companies Act, 1956 seeks directions to convene a meeting of the Equity Shareholders of the Demerged Company and Resulting Company to consider/approve the Scheme of Arrangement for the demerger of the 'KPO Business.' The Board of Directors of the companies have approved the Scheme, and consent has been obtained from all secured and unsecured creditors and equity shareholders, except for the Equity Shareholders of the Demerged Company. The Court directed the convening of a meeting of Equity Shareholders of the Demerged Company and appointed a Chairman and Co-Chairman for the meeting.

2. Dispensation of meetings of secured and unsecured creditors:
All secured and unsecured creditors of the Demerged Company and Equity Shareholders of the Resulting Company have consented to the Scheme of Arrangement. As there are no objections or pending investigations against the companies, the Court dispensed with the need for meetings of secured and unsecured creditors, except for the Equity Shareholders of the Demerged Company, for whom a meeting was directed to be convened.

3. Confirmation of no investigations or proceedings:
The petitioner companies confirmed that there are no investigations or proceedings pending against them under Sections 235 to 251 of the Companies Act, 1956. This confirmation played a crucial role in the Court's decision to dispense with certain meetings and proceed with the Scheme of Arrangement.

4. Appointment of Chairman and Co-Chairman:
For the Equity Shareholders meeting of the Demerged Company, the Court appointed a Chairman and Co-Chairman along with their fees and expenses details. The appointed officials were tasked with conducting the meeting and reporting the results to the Court within a specified timeline.

5. Reporting and verification of meeting results:
The Chairman of the Equity Shareholders meeting was required to report the meeting results to the Court within seven days of its conclusion. The report had to be verified by the Chairman's affidavit, ensuring the accuracy and legitimacy of the meeting proceedings and decisions.

6. Conducting the meeting in accordance with the law:
The Court outlined specific requirements for conducting the Equity Shareholders meeting, including notification through newspapers and the Official Gazette, issuance of individual notices to shareholders, and the approval criteria for the Scheme in the meeting. The meeting was to be conducted strictly in accordance with the law to ensure transparency and fairness in the decision-making process.

This detailed analysis highlights the Court's thorough consideration of the petition under the Companies Act, 1956, and its decision-making process regarding the Scheme of Arrangement and the necessary meetings for approval and implementation.

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