2014 (12) TMI 1380 - HC - Companies Law

Approval of Scheme of Amalgamation - section 230-232 of Companies Act - HELD THAT - Various directions regarding holding and convening of various meetings issued - directions regarding issuance of various notices issued. The scheme is approved - application allowed.

Summary

Issues:
1. Dispensing with the meeting of Equity Shareholders for Scheme of Amalgamation
2. Absence of Secured Creditors in the Applicant Company
3. Dispensing with the meeting of Unsecured Creditors for Scheme of Amalgamation
4. Reorganization of share capital and rights of creditors of the Transferee Company

Analysis:

1. The court ordered that the meeting of Equity Shareholders of the Applicant Company to consider the proposed Scheme of Amalgamation is dispensed with due to the consent of both Equity Shareholders, as evidenced by annexed exhibits. This decision eliminates the need for a formal meeting and approval process.

2. It was noted that there are no Secured Creditors in the Applicant Company, as stated in the supporting Affidavit. Consequently, the requirement to convene a meeting of Secured Creditors does not arise, simplifying the process of the proposed Scheme of Amalgamation.

3. The court further dispensed with the meeting of Unsecured Creditors for the Scheme of Amalgamation based on the assertion that the scheme is an arrangement between the Applicant Company and its shareholders, not involving creditors. The Applicant Company committed to notifying Unsecured Creditors individually and through public notices in newspapers, ensuring transparency in the process.

4. The Applicant Company, being a wholly owned subsidiary of the Transferee Company, clarified that there is no reorganization of share capital or issuance of new shares by the Transferee Company. All existing shares will be canceled as per the Scheme, and the rights of creditors of the Transferee Company will remain unaffected. Citing a previous court case, the need for separate Company Summons for Direction and Company Scheme Petition by the Transferee Company was waived, streamlining the legal procedures.

This judgment reflects a meticulous consideration of the legal requirements and specific circumstances of the case, leading to practical and efficient decisions regarding the Scheme of Amalgamation and the rights of different stakeholders involved.