2015 (4) TMI 1207 - HC - Companies Law

Scheme of Amalgamation - dispensing with the meetings of Equity Shareholders and Unsecured Creditors of the applicant-company - Held that - Having heard Mr. Pahwa, learned Advocate for the applicant and considering the fact that all the Equity Shareholders and Unsecured Creditor of the applicant company have given their consents in writing as required u/s 391(2) of the Act to the proposed Scheme of Amalgamation, the meetings of the Equity Shareholders and Unsecured Creditor of the applicant company are ordered to be dispensed with.

Summary

Issues:
Dispensing with meetings of Equity Shareholders and Unsecured Creditors for approval of the scheme of Amalgamation.

Analysis:
The judgment pertains to a Judges Summons filed by the applicant, a Transferor Company, seeking dispensation of meetings of Equity Shareholders and Unsecured Creditors for approval of a scheme of Amalgamation with another company. The applicant, represented by Mr. Navin K. Pahwa, highlighted that all three equity shareholders and the sole unsecured creditor of the applicant company provided written consent for the proposed scheme. Supporting documents, including consent letters and a certificate from Chartered Accountants confirming the consents, were presented to the court. It was emphasized that there are no secured creditors in the applicant company. Based on the submissions and in accordance with section 391(2) of the Act, the court, after hearing Mr. Pahwa, ordered the dispensation of meetings of Equity Shareholders and Unsecured Creditor, as all necessary consents had been obtained. Consequently, the application was disposed of, affirming the dispensation of the said meetings.

This judgment reflects the importance of obtaining written consents from Equity Shareholders and Unsecured Creditors for schemes of Amalgamation, as mandated by section 391(2) of the Act. The court acknowledged the compliance with this requirement by the applicant, as evidenced by the consent letters and the certificate from Chartered Accountants. The absence of any secured creditors in the applicant company further streamlined the approval process for dispensing with the meetings. The decision underscores the significance of adherence to legal procedures and the necessity of obtaining requisite consents for such corporate actions to ensure transparency and compliance with statutory provisions.

In conclusion, the judgment showcases a clear and concise legal process where the court, upon satisfying itself with the provided consents and supporting documentation, exercised its discretion to dispense with the meetings of Equity Shareholders and Unsecured Creditors. By upholding the validity of the consents obtained and recognizing the absence of secured creditors, the court facilitated the smooth progression of the scheme of Amalgamation, underscoring the importance of procedural compliance and due diligence in corporate transactions.