2015 (12) TMI 1715 - HC - Companies Law

Scheme of amalgamation - dispensing with necessary meetings - Held that - Holding of the meeting of the Shareholders of the applicant Company is not necessary and the said meeting of shareholders is hereby dispensed with. It is stated in paragraphs 10 and 15 of the affidavit in support of the Judges Summons, that GPSIN the Transferor Company, is a wholly owned subsidiary of the GPIN the Transferee Company, and the rights and interests of the creditors of the applicant Transferee Company shall not be affected in any manner as a result of the proposed Scheme. The proposed Scheme does not envisage any arrangement or compromise with the creditors of the Transferee Company. The applicant Company shall continue its business operations as the amalgamated Company after such amalgamation of the Transferor Company with the applicant Company. The Transferee Company will fulfill all its liabilities towards its creditors in the normal course of business. The attention of the Court is drawn to the Certificate dated 30.11.2015 issued by the Chartered Accountant (AnnexureE). Considering the above facts and circumstances, it is held that the approval of the Creditors of the Transferee Company is not necessary and the meetings of such creditors is hereby dispensed with.

Summary

Issues involved:
1. Scheme of Arrangement for Amalgamation under Companies Act, 1956
2. Dispensing with the meeting of Equity Shareholders
3. Dispensing with the meeting of Creditors
4. Granting leave to present a petition for sanction

Analysis:

1. Scheme of Arrangement for Amalgamation:
The judgment pertains to a Scheme of Arrangement for the amalgamation of two companies, namely GEA Pharma Systems (India) Private Limited (Transferor Company) with GEA Process Engineering (India) Private Limited (Transferee Company) under Sections 391 to 394 of the Companies Act, 1956. The application was filed by the Transferee Company for the merger, seeking approval for the proposed scheme. The net worth of both companies was positive, and it was asserted that the merger would enhance the position of creditors post-amalgamation.

2. Dispensing with the meeting of Equity Shareholders:
The shareholders of the Transferee Company had approved the scheme through written consent letters, obviating the need for a physical meeting. The court, after considering the submissions and the consent letters, ruled that holding a meeting of shareholders was unnecessary and thus dispensed with the requirement.

3. Dispensing with the meeting of Creditors:
The affidavit highlighted that the Transferor Company was a wholly-owned subsidiary of the Transferee Company, ensuring that the rights and interests of the creditors of the Transferee Company would not be compromised by the merger. As the proposed scheme did not involve any arrangement or compromise with creditors, and the Transferee Company would continue its operations post-amalgamation, the court ruled that the approval of creditors was unnecessary and dispensed with the requirement for their meeting.

4. Granting leave to present a petition for sanction:
The judgment concluded by disposing of the application after considering the facts, submissions, and relevant certificates provided, affirming that the scheme for amalgamation was approved without the need for shareholder or creditor meetings, and granted leave for the company to present a petition for the sanction of the scheme.