2020 (1) TMI 1493 - Tri - Companies Law

Composite Scheme of Arrangement and 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 Involved:
1. Scheme of Arrangement and Amalgamation
2. Board Approval and Modifications
3. Shareholders' Meeting and Notices
4. Advertisement of Meeting
5. Chairman Appointment and Powers
6. Quorum and Voting
7. Scrutinizer Appointment
8. Affidavit and Reporting Compliance
9. Consent Affidavits of Equity Shareholders
10. Creditors' Meeting and Notices
11. Notices to Tax Authorities and Regulatory Bodies
12. Official Liquidator's Role and Assistance
13. Affidavit of Service

Detailed Analysis:

1. Scheme of Arrangement and Amalgamation:
The judgment addresses a Composite Scheme of Arrangement and Amalgamation among Fairchem Speciality Limited (Demerged/Transferee Company), Fairchem Organics Limited (Resulting Company), and Privi Organics India Limited (Transferor Company). The scheme involves the demerger of the Demerged Undertaking of Fairchem Speciality Limited into Fairchem Organics Limited and the amalgamation of Privi Organics India Limited with Fairchem Speciality Limited.

2. Board Approval and Modifications:
The Board of Directors of the respective companies approved the proposed scheme in their meetings held on May 22, 2019. Modifications were made to the draft scheme to incorporate the change of registered office address and observations from BSE Limited and National Stock Exchange of India Limited.

3. Shareholders' Meeting and Notices:
A meeting of the Equity Shareholders of the First Applicant Company was directed to be held on February 25, 2020, for considering and approving the proposed Composite Scheme of Arrangement and Amalgamation. Notices of the meeting, along with a copy of the Scheme and required disclosures, were directed to be sent to the shareholders at least 30 days before the meeting.

4. Advertisement of Meeting:
Notices of the meeting were to be published in two local newspapers, "Business Standard" in English and "Maharashtra Times" in Marathi, at least one month before the meeting date.

5. Chairman Appointment and Powers:
Mr. Utkarsh Shah was appointed as the Chairman of the meeting, with Mr. Nahoosh Jariwala as an alternate. The Chairman was granted all necessary powers for conducting the meeting and resolving procedural questions.

6. Quorum and Voting:
The quorum for the meeting was prescribed under Section 103 of the Companies Act, 2013. Voting by proxy or authorized representative was permitted, provided the proxy forms were submitted 48 hours before the meeting.

7. Scrutinizer Appointment:
Mr. Uday Dave, Partner at M/s Parikh Dave & Associates, was appointed as the Scrutinizer for the meeting, with a fixed remuneration of ?30,000 excluding taxes.

8. Affidavit and Reporting Compliance:
The Chairman was directed to file an affidavit at least seven days before the meeting, confirming compliance with the directions regarding the issue of notices and advertisements. The results of the meeting were to be reported to the Tribunal within thirty days of the meeting.

9. Consent Affidavits of Equity Shareholders:
All equity shareholders of the Second and Third Applicant Companies submitted their consent affidavits, thereby dispensing with the need for their meetings.

10. Creditors' Meeting and Notices:
The Tribunal directed that meetings of the creditors were not required as there was no compromise or arrangement with the creditors. However, notices were to be issued to all creditors, allowing them to submit representations within thirty days.

11. Notices to Tax Authorities and Regulatory Bodies:
Notices along with a copy of the Scheme were to be served to the concerned Income Tax authorities, the Central Government, Regional Director, Registrar of Companies, SEBI, BSE Limited, and National Stock Exchange of India Limited. These authorities were given thirty days to submit their representations.

12. Official Liquidator's Role and Assistance:
The Third Applicant Company was directed to serve notice to the Official Liquidator. M/s Jitendra Chablani, Chartered Accountant, was appointed to assist the Official Liquidator in scrutinizing the books of accounts of the Transferor Company for the last three years. A fee of ?2,00,000 was fixed for this purpose.

13. Affidavit of Service:
The Applicant Companies were directed to file an affidavit of service in the registry, proving the dispatch of notices to regulatory authorities and creditors, and report compliance to the Tribunal.