2015 (12) TMI 307 - HC - Companies Law

Scheme of Arrangement - directions of this court to dispense with the requirement of convening the meetings of the equity shareholders of both the companies - Held that - The transferor company has 11 equity shareholders. All the equity shareholders have given their consents/no objections in writing to the proposed Scheme of Arrangement. 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 meeting of the equity shareholders of the transferor company to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Arrangement is dispensed with. The transferee company has 02 equity shareholders and 01 unsecured creditor. Both the equity shareholders and the sole unsecured creditor have given their consents/no objections in writing to the proposed Scheme of Arrangement. Their consents/no objections have been placed on record. The meeting of the secured creditors of the transferor company shall be held on 26th December, 2015 at 11 00 a.m. at A-11, Meerut Road Industrial Area, Ghaziabad, Uttar Pradesh. Mr.Ankur Arora, Advocate, (Mobile No. 9811929774) is appointed as the Chairperson and Mr. Hari Om Gautam, Advocate, (Mobile No. 9810057143) is appointed as the Alternate Chairperson to conduct the said meeting. The Quorum of the meeting of the secured creditors of the transferor company shall be 03 in number and more than 25% in value of the total secured debt. The meeting of the unsecured creditors of the transferor company shall be held on 26th December, 2015 at 12 30 p.m. at A-11, Meerut Road Industrial Area, Ghaziabad, Uttar Pradesh. Mr.Sunil Sharma, Advocate, (Mobile No. 9811383958) is appointed as the Chairperson and Ms. Shrishti Sharma, Advocate, (Mobile No. 9582249534) is appointed as the Alternate Chairperson to conduct the said meeting. The Quorum of the meeting of the unsecured creditors of the transferor company shall be 20 in number and more than 25% in value of the total unsecured debt. The Chairpersons and Alternate Chairpersons shall ensure that notices for convening the aforesaid meetings of the secured and unsecured creditors of the transferor company, along with copies of the Scheme of Arrangement and the statement under Section 393 of the Companies Act, 1956, shall be sent to the secured and unsecured creditors of the transferor company by ordinary post at their registered or last known addresses at least 21 days before the date appointed for the meetings, in their presence or in the presence of their authorized representatives. Notice of the meetings shall also be published in the Delhi editions of the newspapers Business Standard (English) and (Hindi) Delhi editions in terms of the Companies (Court) Rules, 1959 at least 21 days before the date appointed for the meetings.

Summary

Issues:
Application under Sections 391, 392 & 394 of the Companies Act, 1956 for dispensing with the requirement of convening meetings of equity shareholders, secured and unsecured creditors of the companies involved in the proposed Scheme of Arrangement.

Analysis:
The joint application filed under Sections 391, 392 & 394 of the Companies Act, 1956 seeks directions to dispense with the need for convening meetings of equity shareholders of the transferor company and equity shareholders, secured, and unsecured creditors of the transferee company. The Scheme of Arrangement between the two companies, both situated in New Delhi, aims at amalgamation for operational efficiencies and capital utilization. The share exchange ratio is detailed in the Scheme, and no pending proceedings under relevant sections of the Companies Act against the applicant companies have been reported.

The Board of Directors of both companies have approved the Scheme, and consents/no objections from equity shareholders and creditors have been obtained and found in order. The requirement of convening meetings of equity shareholders of the transferor company is dispensed with due to unanimous consents. For the transferee company, consents from equity shareholders and an unsecured creditor have been obtained. Notably, there are no secured creditors for the transferee company as of a specified date.

Regarding secured and unsecured creditors of the transferor company, meetings are directed to seek approval for the Scheme. Specific details for conducting these meetings, including venue, appointment of Chairpersons, Quorum requirements, and proxy considerations, have been outlined. Notices for these meetings must be sent to creditors in advance, and publication in newspapers is mandated. Chairpersons are empowered to issue suitable directions for fair conduct, and their fees and incidental expenses are fixed, with a requirement to file reports post-meetings.

In conclusion, the application stands allowed in the specified terms, with directions for conducting meetings of secured and unsecured creditors in a fair manner, ensuring compliance with legal provisions and procedural requirements.