2015 (10) TMI 2680 - HC - Companies Law

Scheme of Amalgamation - appropriate orders for convening and holding meetings of Secured Creditors and Unsecured Creditors of the applicant company of approving the Scheme - Held that - The meetings of Secured Creditors and Unsecured Creditors of the applicant company shall be convened and held at the Registered Office of the Company, on 10.12.2015 at 1.00 p.m. and 2 00 p.m. respectively for the purpose of considering, and if thought fit, approving, with or without modifications, the Compromise or Arrangement proposed to be made between the said Companies. That at least 21 clear days before the day appointed for the meetings, an advertisement convening the same and stating that copies of the said arrangement and of the statement required to be furnished pursuant to Section 393 and forms of proxy can be obtained free of charge at the registered office of the company or at the office of their advocate, be inserted once in each dailies viz. Gujarati Daily Sandesh and English Daily Times of India , both Baroda Editions. That the quorum for the meetings of the Secured Creditors and Unsecured Creditors shall be 2 and 5 respectively. That voting by proxy to be permitted, provided that a proxy in the prescribed form duly signed by the person entitled to attend and vote at the meetings, is filed with the company at the above address not later than 48 hours before the meetings. That the value of debt of each of the secured and unsecured creditors shall be in accordance with the books of the company and, where the entries in the books are disputed, the Chairman shall determine the value for purposes of the meetings. And it is further ordered that the Chairman reports to this Court result of the said meetings within 21 days of the conclusion of the meetings, and the said reports shall be verified by his affidavit. In view of the fact that the consent of all the equity shareholders are obtained and produced on record, the meeting of the equity shareholders is ordered to be dispensed with.

Summary

Issues:
Convening and holding meetings of Secured Creditors and Unsecured Creditors for approving the Scheme of Amalgamation.

Analysis:
The judgment pertains to a Judges Summons taken out by Centurion Laboratories Private Limited (Transferee Company) seeking orders to convene and hold meetings of Secured Creditors and Unsecured Creditors to approve a Scheme of Amalgamation involving the merger of two companies. The applicant requested dispensation of the Equity Shareholders meeting as the consent of all equity shareholders had been obtained and recorded. The Court, after hearing the arguments and reviewing the application along with the proposed Scheme of Amalgamation, ordered the meetings of Secured Creditors and Unsecured Creditors to be convened and held on specified dates at the Registered Office of the Company.

The Court further directed that advertisements be published at least 21 days before the meetings in Gujarati Daily 'Sandesh' and English Daily 'Times of India' (Baroda Editions), and notices along with necessary documents be sent to the Secured Creditors and Unsecured Creditors. The Chairman of the meetings was designated, with provisions for proxy voting subject to timely submission of duly signed forms. The value of debts for each creditor category was to be determined according to the company's books, with the Chairman empowered to resolve disputes. The Chairman was required to report the meeting outcomes to the Court within 21 days, verified by an affidavit. The judgment also exempted the publication of notice in the official gazette and dispensed with the Equity Shareholders meeting due to the already obtained consent.

In conclusion, the Court granted the orders for convening and conducting the necessary meetings of Secured Creditors and Unsecured Creditors for approving the Scheme of Amalgamation, while providing detailed instructions and procedures to be followed during the process. The judgment ensured compliance with legal requirements and safeguarded the interests of the involved parties in the amalgamation process.