2018 (9) TMI 2042 - Tri - Companies Law

Scheme of arrangement - seeking directions regarding holding, convening and dispensation with various meetings - Section 230-232 of Companies Act - HELD THAT - Various directions regarding holding, convening and dispensation with various meetings - directions regarding issuance of various notices issued - the scheme is approved. Application allowed.

Summary

Issues Involved:
1. Dispensation of meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors for the Applicant Companies.
2. Approval of the Scheme of Arrangement under Sections 230 to 232 of the Companies Act, 2013.

Issue-wise Detailed Analysis:

1. Dispensation of Meetings:

Transferor Company No. 1:
- The Transferor Company No. 1 sought an order to dispense with convening meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors.
- The company had two Equity Shareholders, no Secured Creditors, and one Unsecured Creditor.
- Consent affidavits from all Equity Shareholders and the sole Unsecured Creditor were provided, supporting the proposed scheme.

Transferor Company No. 2:
- Similarly, Transferor Company No. 2 sought to dispense with meetings of its Equity Shareholders, Secured Creditors, and Unsecured Creditors.
- The company had two Equity Shareholders, no Secured Creditors, and no Unsecured Creditors.
- Consent affidavits from all Equity Shareholders were submitted.

Transferor Company No. 3:
- The Transferor Company No. 3 also requested dispensation of meetings for Equity Shareholders, Secured Creditors, and Unsecured Creditors.
- The company had two Equity Shareholders, no Secured Creditors, and no Unsecured Creditors.
- Consent affidavits from all Equity Shareholders were provided.

Transferee Company:
- The Transferee Company sought an order to dispense with meetings of its Equity Shareholders, Preference Shareholders, Secured Creditors, and Unsecured Creditors.
- The company had two Equity Shareholders, one Preference Shareholder, no Secured Creditors, and two Unsecured Creditors.
- Consent affidavits from all Equity Shareholders, the Preference Shareholder, and the Unsecured Creditors were submitted.

Judgment:
- The Tribunal allowed the application and passed the following orders:
1. Dispensed with the meeting of Equity Shareholders of the Transferee Company.
2. Dispensed with the meeting of Preference Shareholders of the Transferee Company.
3. Dispensed with the meeting of Equity Shareholders of Transferor Company No. 1.
4. Dispensed with the meeting of Equity Shareholders of Transferor Company No. 2.
5. Dispensed with the meeting of Equity Shareholders of Transferor Company No. 3.
6. Dispensed with the meeting of Unsecured Creditors of the Transferee Company.
7. Dispensed with the meeting of Unsecured Creditors of Transferor Company No. 1.
8. Allowed any interested person to put forth their contentions before the Tribunal when the Applicant Companies seek approval of the scheme.

2. Approval of the Scheme of Arrangement:

Scheme Details:
- The Scheme of Arrangement involves the amalgamation of Transferor Companies No. 1, 2, and 3 into the Transferee Company.
- The scheme aims to consolidate business operations, achieve economies of scale, combine managerial and technical expertise, offer a strong financial structure to creditors, enhance shareholder value, reduce administrative functions, and improve financial viability and revenue inflow.

Supporting Documents:
- The application included various supporting documents such as the Memorandum and Articles of Association, audited and unaudited balance sheets, Board Resolutions approving the scheme, and Chartered Accountant certificates verifying the shareholders and creditors.

Judgment:
- The Tribunal, after hearing the counsel and perusing the documents, allowed the application and dispensed with the requirement of convening meetings for the approval of the Scheme of Arrangement.
- The Tribunal noted that all shareholders and creditors had given their consent to the scheme, making the convening of meetings unnecessary.

In conclusion, the Tribunal granted the dispensation of meetings for the Equity Shareholders, Secured Creditors, and Unsecured Creditors of the Applicant Companies and noted that any interested party could present their objections when the scheme is formally presented for approval.