2015 (5) TMI 128 - HC - Companies Law

Application under Sections 391 and 394 of the Companies Act, 1956 read with Rules 6 & 9 of the Companies (Court) Rules, 1959 - Dispensation of convening the meetings of their equity shareholders, secured and unsecured creditors - Held that - All the equity shareholders and unsecured creditor of transferor company and transferee company 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 creditor of the transferor company to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Amalgamation is dispensed with. - The application approved.

Summary

Issues:
Application under Sections 391 and 394 of the Companies Act, 1956 seeking dispensation of shareholder and creditor meetings for Scheme of Amalgamation.

Analysis:
The joint application filed under Sections 391 and 394 of the Companies Act, 1956, along with Rules 6 & 9 of the Companies (Court) Rules, 1959, requested the court to dispense with the requirement of convening meetings of equity shareholders and creditors for the proposed Scheme of Amalgamation between two companies. The transferor and transferee companies, both located in New Delhi, were incorporated in 1995 and 1986, respectively. The share capital details of both companies were provided, along with copies of their Memorandum and Articles of Association, audited balance sheets, and the Scheme of Amalgamation. The Scheme aimed to consolidate shareholding, improve administrative control, and foster growth by pooling resources and increasing efficiency through synergies.

The proposed share exchange ratio was detailed in the Scheme, where shareholders of the transferor company would receive one equity share of the transferee company for every 34 equity shares held in the transferor company. The applicants confirmed the absence of pending proceedings under Sections 235 to 251 of the Companies Act, 1956. The Board of Directors of both companies unanimously approved the Scheme, and consents from all equity shareholders and creditors were obtained and deemed in order. Consequently, the court dispensed with the requirement of convening meetings for both companies' shareholders and creditors, as all necessary consents were obtained and no objections were raised. The application was allowed as per the stated terms.