2016 (2) TMI 1131 - HC - Companies Law

Scheme of amalgamation - Held that - This Court had dispensed with holding of meetings of 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) and further directed to convene the meeting of Equity Shareholders of Petitioner Company II. There was no secured creditor of the Petitioner Company-I. 19 equity shareholders holding 1,71,63,15,911 equity shares, out of which 1,67,08,23,411 equity shares are of the face value of ₹ 1/- each and 4,54,92,500 equity shares are of the face value of ₹ 1/- each (with 0.1 called and paid up value), amounting to ₹ 1,67,53,72,661/-, voted in favour of the scheme of Arrangement. Thus, 100% has voted in favour of the Scheme in number and value, who were present. From a perusal of the report, it transpires that the Scheme has been approved by the 100% of the equity shareholders present and voting.

Summary

Issues:
Petition under Section 391-394 of the Companies Act, 1956 seeking directions to consider/approve the Scheme of Arrangement for the merger of two companies.

Analysis:
The petition under Section 391-394 of the Companies Act, 1956 was filed by the petitioner companies seeking directions to consider/approve the Scheme of Arrangement for the merger of 'Scope E-Knowledge Center Private Limited' into 'Quatrro Global Services Private Limited'. The Court had earlier dispensed with the requirement of holding meetings of all equity shareholders and unsecured creditors of the Transferor Company and secured and unsecured creditors of the Transferee Company. The meeting of Equity Shareholders of the Transferee Company was directed to be convened. The Chairman of the meeting submitted a report stating that the Scheme of Arrangement was unanimously approved without any modifications by the equity shareholders of the Transferee Company. 19 equity shareholders attended the meeting and voted in favor of the scheme, representing 100% of the equity shareholders present and voting. The Scheme was approved by 100% of the equity shareholders present and voting, both in number and value. Consequently, the first motion petition was disposed of, allowing the petitioner companies to move the Second Motion Petition for further proceedings in the merger process.

This judgment highlights the compliance with the Companies Act, 1956 in seeking approval for a Scheme of Arrangement for the merger of two companies. The Court's directions regarding dispensing with certain meetings and convening the meeting of Equity Shareholders were followed, leading to the unanimous approval of the Scheme by the equity shareholders of the Transferee Company. The detailed report submitted by the Chairman of the meeting confirmed the approval of the Scheme by 100% of the equity shareholders present and voting, ensuring transparency and adherence to the legal requirements. The approval obtained paves the way for the petitioner companies to proceed with the Second Motion Petition for the merger, indicating a significant step towards the completion of the merger process in accordance with the provisions of the Companies Act, 1956.