2015 (12) TMI 1713 - HC - Companies Law

Scheme of Arrangement - dispensing with the meeting of the Equity Shareholders, Secured and Unsecured Creditors of the Applicant Transferor Company- Held that - When all the Equity Shareholders and unsecured creditors of the Scope E-Knowledge Center Private Limited (Transferor Company/ Petitioner Company I) and secured and unsecured creditors of the Quatrro Global Services Private Limited (Transferee Company/ Petitioner Company II) have given their consent to the Scheme of Arrangement, I do not find any reason to decline the prayer to dispense with their meeting. Accordingly, their meeting is dispensed with. There is no secured creditor of Petitioner Company I. As far as the prayer of counsel for the petitioner regarding convening the meeting of Equity Shareholders of the petitioner company II, is concerned, the prayer is justified. Accordingly, it is directed that a meeting of Equity Shareholders of the Petitioner Company II be convened accordingly. 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 Petitioner company II 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.

Summary

Issues:
1. Direction to convene a meeting of Equity Shareholders of a company for a Scheme of Arrangement.
2. Dispensation of meetings of secured and unsecured creditors for the Scheme of Arrangement.

Analysis:
1. The petition under Sections 391-394 of the Companies Act, 1956 sought directions to convene a meeting of Equity Shareholders of a company for a Scheme of Arrangement where one company would merge into another. The petition was supported by affidavit and the petitioner companies were seeking dispensation of meetings of secured and unsecured creditors to consider/approve the Scheme of Arrangement. The Board of Directors of the petitioner companies had approved the Scheme of Arrangement in a meeting, and all necessary consents from Equity Shareholders and creditors were obtained. The court found no reason to decline the prayer to dispense with the meetings as all relevant parties had given their consent to the Scheme.

2. The petition detailed the share capital structures of both companies involved in the Scheme of Arrangement. It was noted that all Equity Shareholders and unsecured creditors of the Transferor Company had given their consent to the Scheme, and there were no secured creditors for the Transferee Company except the Equity Shareholders for which a meeting was requested. The court confirmed that there were no pending investigations or proceedings against the petitioner companies under relevant sections of the Act. As all necessary consents were obtained, the court dispensed with the meetings of secured and unsecured creditors for the Scheme.

3. Regarding the meeting of Equity Shareholders of the Transferee Company, the court directed the convening of a meeting at a specified venue, date, and time. The Chairman and Co-Chairman appointed for conducting the meeting were instructed to report the results to the Court within seven days. The meeting was to be conducted in accordance with the law, with proper notification to all concerned parties through newspapers and the Official Gazette. The Scheme put up in the meeting would require approval by a majority in number and by a minimum of 75% in value of the Equity Shareholders present and voting, either in person or by proxy. Proxies were not to exceed 50% of the quorum for the meeting.