2015 (8) TMI 92 - HC - Companies Law

Scheme of Amalgamation - Dispensing convening of meetings of equity shareholders, preference shareholders, secured and unsecured creditors to consider and approve, proposed Scheme of Amalgamation under Sections 391 & 394 of the Companies Act, 1956 Held that - Board of Directors of transferor companies no. 1, 2, 3, 4, 5 & 6 and transferee company in their separate meetings respectively have unanimously approved proposed Scheme of Amalgamation Consents/no objections of equity shareholders and preference shareholders of all the transferor companies were found in order Application stands allowed Decided in favour of applicants.

Issues Involved:
1. Requirement of convening meetings of equity shareholders, preference shareholders, secured and unsecured creditors.
2. Examination of consents/no objections from shareholders and creditors.
3. Approval of the proposed Scheme of Amalgamation.
4. Share exchange ratio.
5. Pending proceedings under Sections 235 to 251 of the Companies Act, 1956.
6. Unanimous approval by the Board of Directors.

Detailed Analysis:

1. Requirement of Convening Meetings:
The applicant companies sought directions from the court to dispense with the requirement of convening meetings of their equity shareholders, preference shareholders, secured and unsecured creditors to consider and approve the proposed Scheme of Amalgamation. The court examined the consents/no objections submitted by the shareholders and creditors of the transferor and transferee companies.

2. Examination of Consents/No Objections:
The court noted that the consents/no objections from the equity shareholders, preference shareholders, and creditors of the transferor companies (Ganraj Sugars Private Limited, Pukhraj Sugars Private Limited, Jivitesh Sugars Private Limited, Parashar Sugars Private Limited, Ritesh Vyapaar Private Limited, and Hindon Projects Private Limited) and the transferee company (Ojas Industries Private Limited) were placed on record and found in order. This allowed the court to dispense with the requirement of convening meetings.

3. Approval of the Proposed Scheme of Amalgamation:
The proposed Scheme of Amalgamation aimed to achieve better financial structuring, securitize debts, economize administrative costs, and achieve better administration, operations, and management by consolidation and restructuring. The court found the scheme to be in order and approved it based on the consents/no objections received.

4. Share Exchange Ratio:
The Scheme provided specific share exchange ratios for the shareholders of the transferor companies. For example, "06 fully paid-up equity shares of Rs. 10/- each of the transferee company for every 01 fully paid-up equity share of Rs. 10/- each held in the transferor company no. 1." Similar ratios were detailed for the other transferor companies.

5. Pending Proceedings under Sections 235 to 251 of the Companies Act, 1956:
The applicants submitted that no proceedings under Sections 235 to 251 of the Companies Act, 1956 were pending against the applicant companies. This was noted by the court as part of its consideration.

6. Unanimous Approval by the Board of Directors:
The Board of Directors of the transferor companies and the transferee company unanimously approved the proposed Scheme of Amalgamation in their respective meetings. Copies of the resolutions passed were placed on record and considered by the court.

Conclusion:
The court allowed the application, dispensing with the requirement of convening meetings of the equity shareholders, preference shareholders, and creditors based on the consents/no objections received. The proposed Scheme of Amalgamation was approved, and the application was allowed in the aforesaid terms.

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