2012 (12) TMI 800 - HC - Companies Law

Scheme of Arrangement for de-merger - Held that - The proposed Scheme has been approved by the Board of Directors of both the Applicant Companies. In view of the written consents/NOC given, the requirement of convening meetings of Shareholders of the Demerged Company and the Resultant Company are dispensed with. As that the Un-secured Creditors of both the Applicant Companies have given their written consents/NOC to the proposed Scheme. Accordingly, the requirement of convening meeting of their meeting is also dispensed with. There is no requirement of convening the meetings of the Secured Creditors of the Applicant Companies as they do not have any - application of demerger so allowed.

Summary

Issues:
Application under sections 391 & 394 of the Companies Act, 1956 for de-merger of Real Estate Division of a company into another company.

Analysis:
The judgment pertains to a joint Application under sections 391 & 394 of the Companies Act, 1956, regarding the Scheme of Arrangement for the de-merger of the Real Estate Division of a Demerged Company into a Resultant Company. The Application includes details such as the incorporation dates, authorized capital, and latest audited Annual Accounts of both companies. It is noted that no proceedings under sections 235 to 251 of the Companies Act, 1956 are pending against the Applicant Companies. The proposed Scheme has been approved by the Board of Directors of both companies, and copies of the Board Resolutions have been submitted. The status of Shareholders, Secured and Un-secured Creditors of both companies, along with their consents for the proposed Scheme, has been clearly outlined in a chart provided in the Application.

The Application further requests dispensation of the requirement of convening meetings of Shareholders and Creditors of both companies. The judgment states that due to the written consents/NOC received, the necessity of convening these meetings is waived. Written consents/NOC from Un-secured Creditors of both companies have been obtained for the proposed Scheme, eliminating the need for their meeting. Since there are no Secured Creditors for the Applicant Companies, there is no requirement to convene meetings for them either. Consequently, the Application is allowed in the mentioned terms, and an order for the same is issued.

In conclusion, the judgment addresses the legal aspects of the de-merger process under the Companies Act, 1956, ensuring compliance with the necessary procedures and requirements for such corporate actions. It emphasizes the importance of obtaining consents from relevant stakeholders and highlights the dispensation of meetings based on the consents received, ultimately facilitating the smooth execution of the de-merger scheme.