2015 (5) TMI 832 - HC - Companies Law

Application for Scheme of Arrangement under Sections 391(2) and 394 read with Section 100 of the Companies Act, 1956 - Held that - The Chairpersons of the ordered meetings of the secured and unsecured creditors of the demerged company have filed their reports stating that the meetings were duly convened and re-convened, as directed, and that the Scheme of Arrangement has been approved unanimously by the secured and unsecured creditors of the demerged company, present and voting, in the meetings. No observations from Regional Director. No objection has been received to the Scheme of Arrangement from any other party. Considering the approval accorded by the shareholders and creditors of the petitioner companies to the proposed Scheme of Arrangement and the affidavit filed by the Regional Director, Northern Region, not raising any objection to the proposed Scheme of Arrangement, there appears to be no impediment to the grant of sanction to the Scheme of Arrangement. - Application approved.

Summary

Issues:
1. Sanction of the Scheme of Arrangement under Sections 391(2) and 394 read with Section 100 of the Companies Act, 1956.

Analysis:
The judgment pertains to a joint petition filed seeking the sanction of a Scheme of Arrangement between two companies, namely Eros Resorts and Hotels Limited (demerged company) and Eros Grand Resorts & Hotels Private Limited (resulting company). The registered offices of both companies are in New Delhi. The demerged company was initially incorporated in 2006 and later changed its name. The resulting company was also incorporated in 2006. The Scheme involves the demerger of the Hotel Holiday Inn into the resulting company to promote independent growth and benefit stakeholders. The share exchange ratio is detailed in the Scheme, and it is noted that no pending proceedings under specific sections of the Companies Act, 1956 exist against either company.

The Board of Directors of both companies approved the Scheme, and prior applications were made to dispense with certain statutory requirements for shareholder and creditor meetings. The meetings of secured and unsecured creditors of the demerged company unanimously approved the Scheme. Following compliance with notice and publication requirements, the Regional Director did not raise objections to the Scheme. No objections were received from any other party. Considering the approvals received and the absence of objections, the court granted sanction to the Scheme under Sections 391 and 394 read with Section 100 of the Companies Act, 1956. The demerged company's Demerged Undertaking will merge into the resulting company effective from the appointed date of Arrangement. The judgment also addresses the payment of costs by the petitioners for the examination of records, with the petition being allowed on specified terms.

In conclusion, the judgment approves the Scheme of Arrangement between the two companies, highlighting compliance with statutory requirements, approvals from shareholders and creditors, absence of objections, and the effective merger of the Demerged Undertaking into the resulting company.