2016 (9) TMI 1444 - HC - Companies Law

Scheme of Amalgamation - seeking directions of this court to dispense with the requirement of convening the meetings of their equity shareholders, secured and unsecured creditors to consider and approve, with or without modification, the proposed Scheme - Held that - The Board of Directors of the transferor and transferee companies in their separate meetings held on 29th March, 2016 have unanimously approved the proposed Scheme of Amalgamation. Copies of the Resolutions passed at the meetings of the Board of Directors of the transferor and transferee companies have been placed on record. Transferor company no. 1 has 02 equity shareholders and 03 unsecured creditors. Both the equity shareholders and all the unsecured creditors have given their consents/no objections in writing to the proposed Scheme of Amalgamation. 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 meetings of the equity shareholders and unsecured creditors of the transferor company no. 1 to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Amalgamation is dispensed with. There is no secured creditor of the transferor company no. 1, as on 28th March, 2016. The transferor company no. 2 has 02 equity shareholders and 02 unsecured creditors. Both the equity shareholders and both the unsecured creditors have given their consents/no objections in writing to the proposed Scheme of Amalgamation. requirement of convening the meetings of the equity shareholders and unsecured creditors of the transferor company no. 2 to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Amalgamation is dispensed with. There is no secured creditor of the transferor company no. 2, as on 28th March, 2016. Also requirement of convening the meetings of the equity shareholders and unsecured creditors of the transferee company to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Amalgamation is dispensed with. There is no secured creditor of the transferee company, as on 28th March, 2016.

Summary

Issues:
Application under Section 391 of the Companies Act, 1956 seeking dispensation of shareholder and creditor meetings for Scheme of Amalgamation.

Analysis:
The judgment involves a joint application under Section 391 of the Companies Act, 1956 by multiple applicant companies to dispense with the requirement of convening meetings of their equity shareholders and secured/unsecured creditors to consider and approve a proposed Scheme of Amalgamation. The applicant companies sought directions from the court for the Scheme involving multiple transferor companies merging with a transferee company. The registered offices of all companies were within the jurisdiction of the Delhi High Court. Each transferor company was incorporated under the Companies Act, 1956 on different dates, with details of their authorized share capital and issued capital provided in the judgment.

The judgment detailed the consents and no objections received from equity shareholders and creditors of each transferor and transferee company regarding the proposed Scheme of Amalgamation. It highlighted that the Boards of Directors of all companies had unanimously approved the Scheme, and no pending proceedings under relevant sections of the Companies Act, 1956 existed against the applicant companies. The judgment emphasized that the share exchange ratio in the Scheme would result in the cancellation of equity capital of transferor companies upon sanction of the Scheme.

Furthermore, the judgment outlined the consents received from equity shareholders and creditors of each company, confirming their approval of the Scheme and the dispensation of meetings for certain companies based on these consents. The judgment noted the absence of secured creditors for some transferor companies and the transferee company. It concluded by allowing the application in the terms mentioned, indicating the dispensation of meetings for the concerned companies and the approval of the Scheme of Amalgamation.