2020 (12) TMI 1243 - Tri - Companies Law

Approval of scheme of amalgamation - Seeking modification of earlier order - directions for reconvening and holding of the meetings of Equity Shareholders and Unsecured Creditors of the Applicants - Section 230(1) read with Section 232(1) of the Companies Act, 2013 - HELD THAT - Various directions regarding holding and convening of various meetings issued - various directions regarding issuance of various notices also issued. The scheme is approved - application allowed.

Summary

Issues:
Modification of earlier order for reconvening and holding meetings of Equity Shareholders and Unsecured Creditors due to pandemic.

Analysis:
The Applicants sought modification of the earlier order for holding meetings of Equity Shareholders and Unsecured Creditors under Sections 230(1) and 232(1) of the Companies Act, 2013, regarding the Scheme of Amalgamation between two companies. The original meetings scheduled for 3rd April, 2020, were postponed due to the COVID-19 pandemic and subsequent lockdown restrictions. The Applicants requested reconvening the meetings as restrictions had eased, and physical meetings were feasible again.

The Applicants had initially filed Company Application No. 170 of 2020 seeking orders for the Scheme of Amalgamation, which was approved by the Board of Directors of both companies. The Tribunal had dispensed with the meeting of the Preference Shareholder of the Transferor Company but directed separate meetings of Equity Shareholders and Unsecured Creditors of both companies. Notices for these meetings were duly sent to the shareholders and creditors, and published in newspapers as per legal requirements.

Due to lockdown restrictions, the original meetings could not be held, and notices of postponement were published. With the relaxation of restrictions, the Applicants requested reconvening the meetings for obtaining approvals from Equity Shareholders and Unsecured Creditors. The Tribunal, after hearing the Applicants' counsel and reviewing the case documents, allowed the application for modification of the earlier order.

The modified order directed the reconvening of separate meetings of Equity Shareholders and Unsecured Creditors of both companies on 17th February, 2021. The order specified the procedures for reconvening the meetings, including the cut-off date for determining eligibility and value of Unsecured Creditors to vote. Notices were to be sent to regulatory authorities and shareholders, and proxies for voting were allowed as per legal requirements.

The Tribunal directed the Applicant Companies to host notices on their websites and file affidavits of service to report compliance with notice issuance. The Company Application was disposed of, and the Registry was instructed to send copies of the order to all parties. Certified copies of the order would be issued upon compliance with formalities.