2012 (12) TMI 887 - HC - Companies Law

Scheme of Arrangement - Held that - No proceedings under sections 235 to 251 of the Companies Act, 1956 are pending against any of the Applicant Companies as on the date of the present Application. As the proposed Scheme has been approved by the Board of Directors,Shareholders, Secured and Un-secured Creditors of both the Applicant Companies Scheme of arrangement allowed.

Issues:
1. Application under sections 391 & 394 of the Companies Act, 1956 for Scheme of Arrangement.
2. Amalgamation of companies and reduction of post-merger share capital.
3. Approval of the proposed Scheme by the Board of Directors.
4. Status of shareholders and creditors' consents.
5. Dispensation of the requirement of convening shareholder meetings.
6. Approval and allowance of the application.

Issue 1: Application under sections 391 & 394 of the Companies Act, 1956 for Scheme of Arrangement

The judgment pertains to a first motion joint Application under sections 391 & 394 of the Companies Act, 1956. The application is in connection with the Scheme of Arrangement for the amalgamation of one company with another and the subsequent reduction of the post-merger share capital of the transferee company. The Application includes a copy of the proposed Scheme of Arrangement, which has been approved by the Board of Directors of both the Applicant Companies.

Issue 2: Amalgamation of companies and reduction of post-merger share capital

The judgment addresses the amalgamation of PRJ Infracon Pvt Ltd with Arham Finance & Investment Services Ltd and the subsequent reduction of post-merger share capital of the transferee company, Arham Finance & Investment Services Ltd. The application seeks approval for this amalgamation and reduction as per the provisions of sections 391 & 394 of the Companies Act, 1956.

Issue 3: Approval of the proposed Scheme by the Board of Directors

It is noted in the judgment that the proposed Scheme of Arrangement has been duly approved by the Board of Directors of both the Applicant Companies. This approval is a crucial step in the process of seeking judicial sanction for the Scheme of Arrangement under sections 391 & 394 of the Companies Act, 1956.

Issue 4: Status of shareholders and creditors' consents

The judgment provides a detailed overview of the status of shareholders, secured and unsecured creditors of the Applicant Companies. The consent status of these stakeholders for the proposed Scheme is presented in a tabular format, indicating the number of shareholders and creditors and the consents obtained from them. This information is essential for assessing the support for the Scheme of Arrangement among the affected parties.

Issue 5: Dispensation of the requirement of convening shareholder meetings

A prayer has been made in the application for dispensation of the requirement of convening meetings of shareholders of both the Transferor and Transferee Companies. The judgment, based on the written consents and NOC obtained, dispenses with the necessity of convening separate meetings of the shareholders. This decision is made considering the absence of any secured and unsecured creditors for both Applicant Companies.

Issue 6: Approval and allowance of the application

In conclusion, the judgment states that in view of the consents obtained and the averments made in the Application, the requirement of convening separate meetings of the shareholders is dispensed with. It is further mentioned that none of the Applicant Companies has any secured or unsecured creditors. Finally, the Application is allowed in the terms mentioned, with an order for Dasti.

This detailed judgment from the Delhi High Court addresses various crucial aspects of a Scheme of Arrangement under the Companies Act, 1956, including amalgamation, reduction of post-merger share capital, approval by the Board of Directors, stakeholders' consents, and the dispensation of shareholder meetings. The judgment reflects a comprehensive analysis of the legal requirements and procedural steps involved in such corporate arrangements.

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