2015 (10) TMI 2688 - HC - Companies Law

Scheme of Arrangement in the nature of demerger - Held that - Upon hearing the learned Advocate and upon perusing the affidavit dated 26.09.2015 filed in support of the judges summons for direction, with other relevant annexures attached in support of the contents of the affidavit filed by the deponent and copy of the proposed scheme of arrangement, it is ordered that meeting each of the Equity Shareholders, Secured Creditors and Unsecured Creditors of the applicant Company shall be convened adhered to with provisions of notice, proxy, followed.

Summary

Issues:
Convening and holding meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors for considering a Scheme of Arrangement involving demerger.

Analysis:
The judgment involves the applicant, a Demerged Company, seeking directions for convening and holding meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors to consider a Scheme of Arrangement for the demerger of a division into another company. The court, after hearing the Advocate and examining relevant documents, ordered the meetings to be held on a specified date at the applicant's Registered Office Address. The meetings are scheduled for Equity Shareholders, Secured Creditors, and Unsecured Creditors separately to consider and approve the proposed Scheme of Arrangement.

The court further directed that advertisements be published in two newspapers, notifying the meetings and providing details of the proposed Scheme of Arrangement. Notices with relevant documents are to be sent to the concerned parties at least 21 days before the meetings, with a confirmation certificate from the Postal Department. The judgment specified the quorum for each type of meeting and allowed voting by proxy if the prescribed form is submitted within the stipulated time. The value of each member or creditor will be determined according to the company's books, with the Chairman having the authority to resolve any disputes regarding the entries.

Additionally, the judgment appointed a Chairman for the meetings and mandated the Chairman to report the meeting outcomes to the Court within 21 days after the meetings. The report must be verified by affidavit. The judgment also exempted the publication of the notice in the Official Gazette. Subject to the given directions and observations, the application was disposed of by the Court.