2016 (2) TMI 1132 - HC - Companies Law

Scheme of Amalgamation - dispensation of the meetings of the Equity Shareholders of the Applicant Company and convening the meeting of the Unsecured Creditors of the Applicant Company adhered. Other rules to be followed.

Summary

Issues:
Application filed under Secs. 391 to 394 of the Companies Act, 1956 for a proposed Scheme of Amalgamation of two companies, seeking dispensation of meetings of Equity Shareholders and directions for convening the meeting of Unsecured Creditors.

Analysis:
The application was filed under Secs. 391 to 394 of the Companies Act, 1956 for a proposed Scheme of Amalgamation between the Applicant Transferor Company and another company. The Applicant sought dispensation of the meetings of Equity Shareholders as all shareholders had approved the Scheme through written consent letters, which were annexed with the Application. The certificate confirming the shareholders' status and receipt of consent letters was also provided. Considering these facts, the Court granted dispensation from convening the meeting of Equity Shareholders.

The Applicant confirmed that there were no Secured Creditors, as certified by a Chartered Accountant. However, the Applicant requested to convene a meeting of Unsecured Creditors to obtain their approval for the proposed Scheme. The Court ordered the meeting of Unsecured Creditors to be held at a specified location and date, ensuring that notices and relevant documents were sent to each Unsecured Creditor at least 21 days before the meeting. Additionally, the Court directed the publication of a notice in two newspapers, providing details of the Scheme, Explanatory Statement, and Form of Proxy.

The Chairman of the Applicant Company was appointed to preside over the meeting of Unsecured Creditors and was granted powers under the Articles of Association and Companies (Court) Rules, 1959 for conducting the meeting. The quorum for the meeting was set at 5 Unsecured Creditors, allowing voting by proxy if the prescribed form was duly filed before the meeting. The value of the vote of each Unsecured Creditor was to be determined based on the company's records, with the Chairman having the authority to decide in case of disputes. The Chairman was required to report the meeting's result to the Court within 14 days of its conclusion, verified by an affidavit.

In conclusion, the Court disposed of the application after issuing detailed directions for convening and conducting the meeting of Unsecured Creditors, ensuring transparency and compliance with legal procedures under the Companies Act, 1956.