2015 (12) TMI 1716 - HC - Companies Law

Scheme of Amalgamation - Held that - Considering the submissions advanced by the learned advocate for the petitioner, and looking to the consent letters produced at page Nos.32, 32A and 32B at AnnexureD of the application, the meetings of the Shareholders and the sole Secured Creditor of the applicant Company are not necessary and the said meetings of the Shareholders and sole Secured Creditor, are hereby dispensed with. A meeting of the Unsecured Creditors of the applicant Company shall be convened and held at the registered office of the petitioner Company at Block No.08, PhaseB, Village Dumad, Savli Road, Vadodara391740, in the State of Gujarat on Saturday, the 23rd day of January, 2016 at 1.00 p.m. (13.00 hours), for the purpose of considering, and if thought fit approving, with or without modification, the Scheme of merger of the applicant Company and their respective Unsecured Creditors. At least 21 clear days before the day appointed for the meeting to be held as aforesaid, an advertisement convening the said meetings indicating the day, the date, the place and time aforesaid and stating that copies of the said Scheme of Merger, the statement required to be furnished pursuant to Section 393 of the Companies Act, 1956 and Form of Proxy can be obtained free of charge at the registered office of the applicant Company, be inserted once in English daily newspaper Indian Express and the Gujarati daily newspaper Jansatta , both Vadodara editions. Publication of the advertisement in the Gujarat Government Gazette is dispensed with. The settling and/or approval of the advertisement, the form of notice and the statement to accompany the notice by the Registrar of this Court is dispensed with. The Chairman appointed for the aforesaid meeting shall issue the notices of the meetings referred to above.The quorum for the said meeting of the Unsecured Creditors shall be five persons in person. The Voting by proxy be permitted, provided that the proxy in the prescribed form, duly signed by the person entitled to attend and vote at the meeting, is filed with the applicant Company at its registered office, not later than 48 hours before the respective meetings. The value of each Unsecured Creditor shall be in accordance with the books of the applicant Company and where the entries in the books are disputed, the Chairman shall determine the value for purposes of the meeting and his decision in that behalf shall be final.

Summary

Issues:
1. Scheme of Arrangement for Amalgamation under Companies Act, 1956.
2. Dispensing with meetings of Equity Shareholders, Secured Creditor, and Unsecured Creditors.
3. Convening and holding a meeting of Unsecured Creditors.
4. Advertisement and notice requirements for the meeting.
5. Appointment of Chairman for the meeting and proxy voting.
6. Determination of the value of Unsecured Creditors.
7. Reporting the meeting result to the Court.

Scheme of Arrangement for Amalgamation under Companies Act, 1956:
The judgment pertains to a Scheme of Arrangement proposing the amalgamation of two companies, the Transferor Company and the Transferee Company, under Sections 391 to 394 of the Companies Act, 1956. The application filed by the Transferor Company seeks approval for the amalgamation with specific prayers outlined in the Judges' Summons.

Dispensing with meetings of Equity Shareholders, Secured Creditor, and Unsecured Creditors:
The Shareholders and the sole Secured Creditor of the Transferor Company have approved the Scheme through written consent letters, leading to the dispensation of the need for meetings of these parties. Consent letters from the Unsecured Creditors have also been obtained, with a significant majority in favor of the Scheme, warranting the dispensation of their meeting as well.

Convening and holding a meeting of Unsecured Creditors:
A meeting of the Unsecured Creditors is scheduled to be held to consider and approve the Scheme of merger. The meeting is to take place at the registered office of the petitioner Company, with specific requirements for the advertisement of the meeting and the circulation of notices to the Unsecured Creditors.

Advertisement and notice requirements for the meeting:
The judgment outlines the detailed requirements for advertising the meeting in newspapers and sending notices to the Unsecured Creditors. It specifies the content to be included in the advertisement and notices, along with the dispensation of publication in the Gujarat Government Gazette.

Appointment of Chairman for the meeting and proxy voting:
The Director of the applicant Company is designated as the Chairman for the Unsecured Creditors' meeting, with provisions for adjournments. The Chairman is empowered to conduct the meeting, including the handling of amendments to the Scheme and resolutions, as well as the determination of decisions through polling. Proxy voting is permitted subject to specific form submission deadlines.

Determination of the value of Unsecured Creditors:
The value of each Unsecured Creditor is to be determined according to the applicant Company's books. In case of disputes, the Chairman is authorized to ascertain the value for meeting purposes, with the decision being deemed final.

Reporting the meeting result to the Court:
The Chairman is directed to report the meeting's outcome to the Court within a specified timeframe, and the report must be verified by affidavit. The judgment concludes by disposing of the application, indicating the completion of the legal proceedings related to the Scheme of Amalgamation.