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2019 (12) TMI 1434 - Tri - Companies LawApproval of scheme of amalgamation of the Transferor Companies with the Transferee Company - Sections 230 to 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamation) Rules, 2016 - HELD THAT - It is found that all 99.99% of the Equity Shareholders of the Applicant Companies have given respective consent affidavits agreeing to the Scheme. Hence the meeting of the Equity Shareholders of all the Applicant Companies can be dispensed with, in terms of Section 230 (9) of the Act. It is found that there are no Secured Creditors in all the Applicant Companies and hence no need to convene the meeting of the Secured Creditors of all the Applicant Companies. It is also found that all the Unsecured Creditors of the Transferor CompanyIl and Transferor Company-Ill have given respective consent affidavit agreeing to the Scheme. Hence the meeting of the Unsecured Creditors of the Transferor Company-Il and Transferor Company-Ill are dispensed with, in terms of Section 230(9) of the Act. The Transferee Company has no unsecured creditors. Thus no meeting is contemplated. The Transferor Company No. I has seventy seven (77) Unsecured Creditors as on 30.06.2019 as per the report of the Auditor having total debt of ₹ 57,77,818/-. Thirty Five (35) Unsecured creditors have given their consent to the Scheme by way of affidavits. Later, a memo dated 18.11.2019 was filed showing discharge of 40 unsecured creditors having a debt to the tune of ₹ 13,61,963/-. As per order dated 20.12.2019, the Petitioner furnished the Report of the Auditor certifying discharge of Forty (40) Unsecured Creditors. Two creditors having a credit value of₹ 10,290/- have not given their consent. Thus the percentage of creditors who have consented to the scheme comes to 99.76% which is above the threshold of 90% provided mnder section 230(9) of the Companies Act, 2013. Application allowed.
Issues:
1. Amalgamation of Transferor Companies with Transferee Company under Sections 230 to 232 of the Companies Act, 2013. 2. Dispensing with the meeting of Equity Shareholders, Secured Creditors, and Unsecured Creditors. 3. Jurisdiction of the National Company Law Tribunal over the Applicant Companies. 4. Approval of the Scheme of Amalgamation by the Board of Directors. 5. Consent of Shareholders and Creditors to the Scheme. 6. Status of Creditors' consent for the Scheme. Analysis: 1. The Tribunal considered the Company Application seeking amalgamation under Sections 230 to 232 of the Companies Act, 2013. The Applicant Companies proposed a Scheme of Amalgamation to rationalize and streamline their finance and management, aiming to face industry competition effectively. The Tribunal noted the similarities in business nature between the Transferor and Transferee Companies, emphasizing the benefits of consolidation for operational efficiency and business growth. 2. The Applicant Companies requested dispensing with the meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors. The Tribunal found that 99.99% of Equity Shareholders had consented to the Scheme, allowing for the dispensation of Equity Shareholders' meetings. Additionally, as there were no Secured Creditors in any of the Applicant Companies and Unsecured Creditors had provided consent, the Tribunal dispensed with the need for meetings of Secured and Unsecured Creditors. 3. Considering the jurisdiction, the Tribunal confirmed that the Registered Offices of the Applicant Companies were within its jurisdiction in the State of Andhra Pradesh. This jurisdictional aspect enabled the Tribunal to adjudicate on the matter of amalgamation and related proceedings. 4. The Scheme of Amalgamation was approved by the Board of Directors of the Applicant Companies in their respective meetings, with an appointed date effective from 01.04.2019, subject to the approval of shareholders and creditors. This approval process was a crucial step in the legal framework for the proposed amalgamation. 5. The Tribunal reviewed the consent of Shareholders and Creditors to the Scheme. It noted that the majority of Shareholders and Creditors had provided their consent through affidavits, meeting the statutory requirements for dispensing with formal meetings. The detailed analysis of the consent status of each Applicant Company's Shareholders and Creditors was essential for the Tribunal's decision-making process. 6. The status of Creditors' consent for the Scheme was a significant aspect of the judgment. The Tribunal examined the consent percentages of Unsecured Creditors for each Transferor Company, ensuring compliance with the statutory threshold of 90% under Section 230(9) of the Companies Act, 2013. The meticulous review of Creditors' consent and subsequent updates provided clarity on the Scheme's acceptance among the affected parties. In conclusion, the Tribunal allowed the Company Application, dispensed with the meetings of Creditors and Shareholders under Section 230(9) of the Companies Act, 2013, and facilitated the amalgamation process as per the proposed Scheme. The detailed analysis of consent, jurisdictional aspects, and approval procedures underscored the legal soundness and compliance of the amalgamation process undertaken by the Applicant Companies.
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