2015 (5) TMI 1132 - HC - Companies Law

Scheme of Amalgamation - Transferor Company seeks dispensation of the meetings of its Equity Shareholders, Secured and Unsecured Creditors and the Petitioner Company No.2- Transferee Company seeks dispensation of the meeting of Secured and Usecured Creditors - Held that - Convening of meetings of the Equity Shareholders, Secured and Unsecured Creditors of the Transferor Company and Secured Creditors of the Transferee Company are ordered to be dispensed with. As no consents of the Equity Shareholders & Unsecured Creditors of the Transferee Company has been obtained and in order to seek their approval to the Scheme of Amalgamation, it is hereby ordered that meetings of the Equity shareholders and Unsecured Creditors of the Transferee Company as scheduled. The meetings shall be conducted in accordance with law and after due notice to all concerned inlcuding public in the newspapers namely Financial Express (English) and Jansatta (Hindi) both Delhi/ NCR Edition and in the official Gazette of Government of Haryana. Notice of the meetings shall be published at least 21 days before the date of the proposed meetings. On the basis of prayer made by learned counsel for the petitioner, permission is granted to publish a common notice for both the aforesaid meetings. Individual notice be also sent to the Equity Shareholders and Unsecured Creditors of the Petitioner- Transferee Company by ordinary post. The prayer of the Transferee Company to comply with provisions of Clause 5.16 of the SEBI Circular referred above is accepted. The Scheme be put up in the meetings of the Equiry Shareholders and Unsecured Creditors, shall be approved/decided by minimum 75% in value and majority in number of the Equity shareholders and Unsecured Creditors present and voting either in person or thorugh proxy.

Summary

Issues:
Petition under Sections 391 to 394 of the Companies Act, 1956 for dispensation of meetings of Equity Shareholders, Secured and Unsecured Creditors of Transferor and Transferee Companies for sanctioning the Scheme of Amalgamation.

Analysis:
The petition under Sections 391 to 394 of the Companies Act, 1956 seeks dispensation of meetings of Equity Shareholders, Secured and Unsecured Creditors of both the Transferor and Transferee Companies for the approval of the Scheme of Amalgamation. The Transferor and Transferee Companies, both situated in the State of Haryana, have detailed their main objects in their respective Memorandum and Articles of Association. The Board of Directors of both companies have approved the Scheme in meetings held on 5.2.2015, with necessary resolutions annexed. The Transferor Company has four Equity Shareholders, all of whom have consented to the Scheme, along with the Secured and Unsecured Creditors. The Transferee Company, on the other hand, has a significant number of Equity Shareholders, Secured and Unsecured Creditors, all of whom have given their consent to the Scheme.

The petition highlights that the interest of Unsecured Creditors of the Transferee Company will not be adversely affected post-amalgamation, and they will be paid off during the normal course of business. It is emphasized that the Scheme is not a compromise/arrangement with the creditors, as all creditors will be paid in full as per their due amounts. The positive Net Asset Value of the Transferee Company post-amalgamation ensures the creditors' interests are adequately safeguarded. The petition further seeks dispensation of meetings for Unsecured Creditors with claims less than Rs. 1 lakh, while meetings for those with claims of Rs. 1 lakh and above are accepted.

The NSE and BSC have given their consent to the Scheme of Amalgamation. The compliance with SEBI Circulars regarding shares issuance to the Promoter Group is also addressed, with the need for public shareholders' consent through postal ballot and e-voting. The Court orders dispensation of meetings for certain categories of creditors while directing meetings for Equity Shareholders and Unsecured Creditors of the Transferee Company to be held on specified dates and venues. Chairmen and Co-Chairmen are appointed for these meetings, with specific fees allocated. The meetings are to be conducted in accordance with the law, with due notice to all stakeholders, including public notifications in newspapers and the official Gazette of the Government of Haryana.

The Scheme's approval in the Equity Shareholders and Unsecured Creditors meetings requires a minimum of 75% in value and a majority in number of those present and voting, either in person or through proxy. The permission to publish a common notice for both meetings is granted, along with individual notices sent to Equity Shareholders and Unsecured Creditors. Compliance with SEBI Circular provisions is accepted, ensuring transparency and adherence to regulatory requirements.