2015 (11) TMI 1715 - HC - Companies Law

Scheme of Amalgamation - orders for dispensing with the meetings of Equity Shareholders and Unsecured Creditors of the applicant company - Held that - Having heard Mr. Pahwa, Ld. Advocate for the applicant and considering the fact that all the Equity Shareholders and the sole 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 for amalgamating the applicant company with eInfochips Limited the meetings of the Equity Shareholders and the Unsecured Creditor of the applicant company is ordered to be dispensed with.

Summary

Issues:
Dispensing with meetings of Equity Shareholders and Unsecured Creditors based on their written consents for a Scheme of Amalgamation.

Analysis:
The judgment pertains to a Judges Summons filed by Gin Technologies Private Limited, the Transferor Company, seeking dispensation of meetings of Equity Shareholders and Unsecured Creditors for a Scheme of Amalgamation involving Smart Guard Systems Private Limited and nGin Technologies Pvt. Ltd. with eInfochips Limited. The applicant, represented by Mr. Navin K. Pahwa, argued that all Equity Shareholders and Unsecured Creditors had provided written consents in favor of the scheme. The applicant, being a wholly owned subsidiary of the Transferee Company, highlighted that the Transferee Company and its nominee shareholder had also consented in writing to the amalgamation. Additionally, the only unsecured creditor, the Transferee Company, had given its consent. Notably, a Certificate by Chartered Accountants confirmed the consents of all stakeholders. The applicant requested the Court to dispense with the meetings of Equity Shareholders and Unsecured Creditors based on the consents received.

The Court, after hearing the arguments presented by Mr. Pahwa, acknowledged that all Equity Shareholders and the sole Unsecured Creditor of the applicant company had provided written consents as mandated under section 391(2) of the Act for the proposed Scheme of Amalgamation with eInfochips Limited. Consequently, the Court ordered the dispensation of meetings of Equity Shareholders and Unsecured Creditors of the applicant company. Subsequently, the Court disposed of the application in light of the consents received and the compliance with the legal requirements under the Act.

This judgment showcases the significance of obtaining written consents from all relevant stakeholders in a Scheme of Amalgamation, as prescribed by the law. The Court's decision to dispense with the meetings based on the consents provided underscores the importance of procedural adherence and stakeholder agreement in corporate restructuring processes. The involvement of legal representatives and the certification by Chartered Accountants further validate the legitimacy of the consents obtained, ensuring compliance with statutory provisions and facilitating a smooth transition in the amalgamation process.