2012 (12) TMI 859 - HC - Companies Law

Scheme of Amalgamation - Application seeking directions from Hon ble court for dispensing with the convening of the meetings of the equity shareholders and creditors of the Applicant Transferor Company - Held that - Consedring the certificate of Chartered Accountants certifying that the Applicant Transferor Company was having no secured or unsecured creditors there is no need for convening and holding meetings of either secured or unsecured creditors. As all the shareholders of the Applicant Transferor Company have given their consent to the Scheme in writing and that the Applicant Transferor Company does not have any secured or unsecured creditors at all, the convening and holding of meetings of equity shareholders as also of the creditor of the Applicant Transferor Company are dispensed with.

Summary

Issues: Application under Sections 391 to 394 of the Companies Act, 1956 seeking directions for dispensing with meetings of equity shareholders and creditors for approving the Scheme of Amalgamation.

In the judgment, the court dealt with an application under Sections 391 to 394 of the Companies Act, 1956, seeking directions to dispense with the convening and holding of meetings of the equity shareholders and creditors of the Transferor Company for approving the Scheme of Amalgamation with the Transferee Company. The Applicant Transferor Company, a wholly owned subsidiary of the Transferee Company, had all its shareholders, including the Transferee Company and its nominee, consenting in writing to the Scheme. The court noted that the Applicant Transferor Company had no secured or unsecured creditors as certified by a Chartered Accountant. Consequently, the court decided to dispense with the meetings of equity shareholders and creditors of the Transferor Company based on the consent of all shareholders and the absence of any creditors. The application was allowed accordingly.

The judgment emphasized the importance of shareholder consent and the absence of creditors in dispensing with the meetings of equity shareholders and creditors of the Transferor Company. The court highlighted that all shareholders, including the Transferee Company and its nominee, had provided written consent to the Scheme of Amalgamation. Additionally, the court considered a certificate from a Chartered Accountant confirming the lack of any secured or unsecured creditors of the Transferor Company. Based on these factors, the court concluded that convening and holding meetings of equity shareholders and creditors were unnecessary in this case. The judgment illustrated the significance of shareholder approval and the financial status of the company in deciding to dispense with such meetings, ensuring a streamlined process for the amalgamation scheme.