2012 (11) TMI 608 - HC - Companies Law

Scheme of Arrangement - Held that - As there are 23 secured & 509 unsecured creditors of the transferor company their consent have not been obtained, thus a meeting is required to be held & in the case the Transferee Company have no secured creditors & there are 10 shareholders whose consent has also not been obtained. The aforenoted separate meetings of secured creditors and unsecured creditors of the Transferor Company and shareholders and unsecured creditors of the Transferee Company shall be held at Executive Club, 439, Village Shahoorpur, PO Fatehpur Beri, New Delhi 110074 will be held on 01.12.2012, Thursday as headed by the appointed Chairperson & Alternate Chairperson - if the Quorum is not present in the meetings, the meetings would be adjourned for 30 minutes and thereafter, the persons present in the meetings would be treated as proper quorum & for the purpose of computing the quorum the valid proxies shall also be considered. Both the Companies will publish advance notice of the aforesaid proposed meetings in Business Standard (English Delhi Edition) and Dainik Bhaskar (Hindi Delhi Edition) minimum 21 days in advance before the Scheduled date of meeting & Individual notice too to be sent by ordinary post minimum 21 days in advance - The Chairpersons/Alternate Chairpersons shall file their reports within two weeks of the conclusion of the respective meetings.

Issues:
1. Application under Section 391 and 394 of the Companies Act, 1956 for Scheme of Arrangement.
2. Approval of the proposed Scheme by the Board of Directors.
3. Status of shareholders and creditors' consent for the scheme.
4. Meetings of secured and unsecured creditors and shareholders.
5. Appointment of Chairpersons and secretarial assistance for meetings.
6. Fixing quorum for meetings and treatment of proxies.
7. Publication of advance notice of proposed meetings.
8. Dispensation of individual notices to unsecured creditors.
9. Directions for fair conduct of meetings and filing of reports.

Analysis:
1. The judgment pertains to a joint application under Sections 391 and 394 of the Companies Act, 1956 for a Scheme of Arrangement between two companies. The application states that the proposed scheme has been approved by the Board of Directors of both companies and that no proceedings under Sections 235 to 251 of the Companies Act are pending against them.

2. The status of shareholders and creditors' consent for the scheme is crucial. The Transferor Company has 10 equity shareholders, out of which 9 have given their consent. However, consent from secured and unsecured creditors is pending. Separate meetings are ordered to be held for secured and unsecured creditors of both the Transferor and Transferee Companies.

3. The judgment details the appointment of Chairpersons and secretarial assistance for the meetings of shareholders and creditors. Specific fees are mentioned for the appointed individuals, and directions are given to ensure the meetings are conducted fairly.

4. Quorum requirements for the meetings are fixed, and procedures for adjournment and treatment of proxies are outlined. The judgment emphasizes the importance of maintaining a proxy register and considers valid proxies for quorum computation.

5. Advance notice of the proposed meetings is directed to be published in specified newspapers, and individual notices are to be sent to the concerned parties. However, a dispensation is granted for unsecured creditors up to a certain value, with newspaper advertisements deemed sufficient notice.

6. The judgment concludes by directing the Chairpersons and Alternate Chairpersons to issue suitable directions for the fair conduct of meetings and to file reports within two weeks of the meetings' conclusion. The application is allowed in the specified terms, with an order for Dasti.

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