2015 (8) TMI 433 - HC - Companies Law

Scheme of Amalgamation Dispensing convening of meetings of equity shareholders, secured and unsecured creditors to consider and approve, proposed Scheme of Amalgamation under Sections 391-394 of Companies Act, 1956 Held that - board of directors of transferor and transferee companies in their separate meetings unanimously approved proposed Scheme of Amalgamation Equity shareholders and secured creditor of transferor and transferee companies have given their consents/no objections in writing to proposed Scheme of Amalgamation and were found in order 43 out of 246 unsecured creditors valuing 86.24%, of transferor company-1 and 48 out of 552 unsecured creditors, valuing 76.45% of transferee company have given their consents/no objections in writing Transferee company has liquidity comprising of cash and bank balances and liquid investments in mutual funds which are more than sufficient to meet and discharge entire liability towards all unsecured creditors of transferor company-1 and have undertaken to discharge their liabilities in normal course of their business Application stands allowed Decided in favour of applicants

Summary

Issues:
Application under Sections 391 to 394 of the Companies Act, 1956 seeking dispensation of meetings of equity shareholders, secured and unsecured creditors for Scheme of Amalgamation.

Analysis:
The judgment pertains to a joint application under Sections 391 to 394 of the Companies Act, 1956 by applicant companies for directions to dispense with the requirement of convening meetings of equity shareholders, secured, and unsecured creditors to consider and approve the proposed Scheme of Amalgamation. The Scheme involves amalgamating two transferor companies with a transferee company. The registered offices of all companies are within the jurisdiction of the Delhi High Court.

The applicant companies provided detailed information about their incorporation dates, share capital structures, and approvals obtained for the Scheme. They submitted copies of Memorandum and Articles of Association, audited balance sheets, and other necessary documents. The proposed Scheme aims to streamline operations, reduce costs, consolidate services, and pool financial resources for future growth opportunities. The share exchange ratio and consideration for transfer of assets and liabilities were outlined in the Scheme.

The Board of Directors of all companies unanimously approved the proposed Scheme in separate meetings. Consents or no objections from equity shareholders, secured and unsecured creditors were obtained and found to be in order. Notably, the judgment highlighted the consents received from unsecured creditors, along with an affidavit confirming the transferee company's liquidity to meet all liabilities towards unsecured creditors. Based on the submissions and compliance with legal requirements, the court allowed the application, dispensing with the need for various meetings and approving the Scheme of Amalgamation.