2015 (11) TMI 1725 - HC - Companies Law

Scheme of Amalgamation - Held that - Learned advocate for the Applicant Company, the following order is passed (1) That the convening and holding of the meeting of the Equity Shareholders of the Applicant Company, seeking approval to the Scheme is dispensed with, in view of the consent affidavits given by the Equity Shareholders of the Applicant Company which are annexed at AnnexureI (Colly) to the affidavit in support of the Summons for Directions. (2) For the present when the Equity Shareholders have given consent, this Court allows this Application for dispensation with the requirement of holding of the meeting of the Equity Shareholders and advertisement to be published in the newspapers. Similarly, publication in the Gujarat Government Gazette is also dispensed with. (3) This Court has considered the Certificate of the Chartered Accountant and the specific averments made in the application at paragraph 17, to the effect that under the Scheme, no compromise is offered to any of the creditors, whether secured or unsecured, and neither is any liability of the Creditors under the Scheme is being reduced or extinguished. As per the financial position as on 30th September 2015, in the case of the Transferee Company, there is an excess of assets over liabilities to the tune of about ₹ 12.55 Crores and as the interest of the Creditors of the Applicant Company is not, in any manner, adversely affected by the proposed Scheme of Amalgamation, the meetings of the Creditors of the Applicant Company to consider and/or approve the proposed Scheme of Amalgamation, are hereby dispensed with.

Summary

Issues:
Dispensation of holding and convening meetings of Equity Shareholders and Creditors for Scheme of Amalgamation.

Analysis:
The judgment pertains to a Company Application filed by the Transferor Company seeking dispensation of meetings of Equity Shareholders and Creditors for the proposed Scheme of Amalgamation with the Transferee Company. The Applicant Company requested to dispense with the Equity Shareholders' meeting as all shareholders had given written consent. The Court, after reviewing the application and supporting documents, allowed the dispensation of the Equity Shareholders' meeting based on the consent affidavits provided by the shareholders. The requirement of holding meetings and publishing advertisements in newspapers and the Gujarat Government Gazette was also waived.

Regarding the Creditors, it was highlighted that no compromise was offered to any of the creditors, and their liabilities were not reduced under the proposed Scheme. The financial positions of both the Applicant and Transferee Companies were assessed, showing assets exceeding liabilities in both cases. As both companies were profitable and the interests of the Creditors were not adversely affected by the amalgamation, the Court dispensed with the need for Creditors' meetings to consider or approve the Scheme. The judgment emphasized that the Scheme did not impact the Creditors negatively, leading to the disposal of the Company Application.