2015 (8) TMI 237 - HC - Companies Law

Scheme of Amalgamation - Dispensing convening of meetings of equity shareholders and unsecured creditors to consider and approve, proposed Scheme of Amalgamation under Sections 391 and 394 Companies Act, 1956 read with Rules 6 & 9 of Companies (Court) Rules, 1959 Held that - board of directors of transferor and transferee companies in their separate meetings unanimously approved proposed Scheme of Amalgamation Equity shareholders and unsecured creditors of transferor company no. 1, 2, 3, 4, 5, 6 &7 and transferor company have given their consents/no objections in writing to proposed Scheme of Amalgamation and were found in order Application stands allowed Decided in favour of Applicants.

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

Detailed Analysis:

1. Application for Dispensing with Meetings:
The joint application under Sections 391 and 394 of the Companies Act, 1956, along with Rules 6 & 9 of the Companies (Court) Rules, 1959, was filed by the applicant companies. They sought directions to dispense with the need for convening meetings of equity shareholders and creditors regarding the proposed Scheme of Amalgamation involving multiple transferor and transferee companies.

2. Company Details:
The judgment outlined the incorporation dates and authorized share capital of each transferor and transferee company involved in the amalgamation scheme. It also mentioned the locations of their registered offices within the jurisdiction of the Delhi High Court.

3. Scheme of Amalgamation:
The proposed Scheme of Amalgamation aimed to merge several transferor companies into the transferee company to form a larger entity for enhanced growth and business development. The application highlighted the benefits of the amalgamation, including improved access to capital, favorable trade terms, streamlined management, and economic control over business operations.

4. Share Exchange Ratio:
The Scheme specified the share exchange ratio for the equity shareholders of the transferor companies, detailing the allotment of equity shares in the transferee company for each share held in the respective transferor companies.

5. Board Approval and Shareholder Consents:
The Board of Directors of all involved companies had unanimously approved the proposed Scheme of Amalgamation. Additionally, the judgment detailed the consents and no objections received in writing from equity shareholders and creditors of each transferor and transferee company, leading to the dispensation of the requirement for formal meetings.

6. Creditor Details:
The judgment confirmed the absence of any pending proceedings under Sections 235 to 251 of the Companies Act, 1956 against the applicant companies. It also noted the creditors' positions for each transferor company, highlighting the consents received and the lack of secured creditors as of a specified date.

7. Court Decision:
Based on the provided details, the court allowed the application in the terms presented, emphasizing the compliance with legal requirements and the agreement of all relevant stakeholders involved in the proposed Scheme of Amalgamation.

This comprehensive analysis covers the key aspects and legal implications of the judgment regarding the application for dispensing with meetings related to the Scheme of Amalgamation under the Companies Act, 1956.

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