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2016 (1) TMI 1327 - HC - Companies LawScheme of Arrangement, in the nature of Demerger - Held that - Considering the submissions advanced on behalf of the applicant, dispensation is sought from the procedure prescribed under Section 101(2) of the Companies Act, 1956 and under Rule 46 to 65 of the Companies (Court) Rules 1959 and the same is hereby granted.
Issues:
1. Approval of Scheme of Arrangement for Demerger and Transfer of Hotel Management Undertaking 2. Dispensation of meetings of Equity Shareholders and Unsecured Creditors 3. Utilization of Securities Premium Reserve Account and reduction of Equity Share Capital Issue 1: The judgment involves the approval of a Scheme of Arrangement for the demerger and transfer of the Hotel Management Undertaking from one company to another, along with the restructure of share capital. The application is filed under Sections 391 to 394 of the Companies Act, 1956, and Sections 78, 100 to 103 of the same Act, as well as Section 52 of the Companies Act, 2013. Issue 2: The applicant sought dispensation from convening meetings of Equity Shareholders and Unsecured Creditors, as all the Equity Shareholders and Unsecured Creditors had approved the Scheme through written consent letters. It was confirmed that there were no Secured Creditors, and certificates confirming the status of Shareholders and Creditors were provided. The Court granted dispensation based on the submissions made by the applicant's counsel. Issue 3: The attention of the Court was drawn to the utilization of the Securities Premium Reserve Account and the proposed reduction of the existing Equity Share Capital of the Applicant Company as part of the Scheme. The reduction did not involve diminishing any liability or payment to shareholders. The approval of the Scheme by Equity Shareholders through consent letters was considered equivalent to a Special Resolution as required under the Companies Act, 1956. The Court sanctioned the reduction, and dispensation was sought and granted from the prescribed procedures under the Companies Act, 1956 and related rules. The judgment concluded by disposing of the application based on the facts presented and the submissions made on behalf of the applicant, thereby approving the Scheme of Arrangement and the related actions as detailed in the judgment.
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