2015 (5) TMI 49 - HC - Companies Law

Application for Scheme of Amalgamation - Dispensation of meeting of their equity shareholders, secured and unsecured creditors - Held that - All the equity shareholders of all three transferor companies have given their consents/no objections in writing to the proposed Scheme of Amalgamation. Their consents/no objections have been placed on record. They have been examined and found in order. In view thereof, the requirement of convening the meeting of the equity shareholders of the transferor companies to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Amalgamation is dispensed with. There is no secured or unsecured creditor of the transferor companies, as on 16th February, 2015. The transferee company has 11 equity shareholders and 07 unsecured creditors. All the equity shareholders and all the unsecured creditors have given their consents/no objections in writing to the proposed Scheme of Amalgamation. Their consents/no objections have been placed on record. They have been examined and found in order. In view thereof, the requirement of convening the meetings of the equity shareholders and unsecured creditors of the transferee company to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Amalgamation is dispensed with. There is no secured creditor of the transferee company, as on 16th February, 2015. - Scheme of Amalgamation approved.

Summary

Issues:
Application under Sections 391 and 394 of the Companies Act, 1956 seeking directions to dispense with the requirement of convening meetings of equity shareholders, secured and unsecured creditors for the proposed Scheme of Amalgamation.

Analysis:
The joint application filed under Sections 391 and 394 of the Companies Act, 1956 sought directions to dispense with the need for convening meetings of equity shareholders, secured, and unsecured creditors to consider the proposed Scheme of Amalgamation involving multiple companies. The transferor companies, along with the transferee company, were located in New Delhi, falling under the jurisdiction of the Delhi High Court. Each company's incorporation details and share capital structure were presented, highlighting their financial standing. The Scheme aimed at merging the transferor companies with the transferee company to pool resources, achieve economies of scale, and enhance business capabilities for future growth.

The Scheme outlined the share exchange ratio for the amalgamation, specifying the issuance of equity shares by the transferee company to the shareholders of the transferor companies based on a predetermined ratio. The application included the Memorandum and Articles of Association of the involved companies, along with audited balance sheets and auditor reports. It was emphasized that the Scheme would benefit from the common shareholding among the companies, leading to operational efficiencies and increased business strength.

The Board of Directors of all companies unanimously approved the proposed Scheme of Amalgamation in separate meetings. Consent from equity shareholders and creditors was obtained in writing, and their no objections were duly recorded. The application detailed the consents obtained from each company's shareholders and creditors, confirming their approval of the proposed Scheme. Notably, no pending proceedings under Sections 235 to 251 of the Companies Act, 1956 were reported against the applicant companies, further strengthening the case for dispensing with the requirement of physical meetings.

Ultimately, the Court allowed the application, dispensing with the need for convening meetings of equity shareholders and creditors for all involved companies, given the unanimous approvals and consents obtained, ensuring compliance with the Companies Act, 1956.