2017 (1) TMI 1267 - HC - Companies Law

Scheme of Amalgamation - Held that - In view of the written consent/NOC obtained by the requisite majority of equity shareholders and unsecured creditors of the Applicant Companies, the requirement of convening and holding the meetings of equity shareholders and unsecured creditors of the Applicant Companies to consider and, if thought fit, approve, with or without modification, the proposed scheme is dispensed with. Further, a prayer has also been sought in the present application, seeking dispensation of the requirement of publishing notices of the meetings of shareholders and creditors of the Applicant Companies, in newspapers. In view of the circumstance that the requirement of convening meetings of equity shareholders and unsecured creditors of the Applicant Companies has been dispensed with, the requirement of publishing notices for the said meetings in newspapers is also dispensed with.

Issues Involved:
1. Approval of the proposed scheme of Amalgamation under Sections 391 to 394 of the Companies Act, 1956.
2. Dispensation with the requirement of convening and holding meetings of equity shareholders and unsecured creditors.
3. Dispensation with the requirement of publishing notices of the meetings in newspapers.

Issue-wise Detailed Analysis:

1. Approval of the Proposed Scheme of Amalgamation:
The joint application was filed under Sections 391 to 394 of the Companies Act, 1956, read with rule 79 of the Companies (Court) Rules, 1959, by eleven transferor companies and one transferee company, collectively referred to as 'Applicant Companies'. The registered offices of the Applicant Companies are situated in New Delhi. The authorized, issued, subscribed, and paid-up share capital of each Transferor Company and the Transferee Company as of 31.03.2016 were detailed in the judgment. Copies of the Memorandum and Articles of Association, audited Balance Sheets as of 31st March 2016, and the proposed scheme were submitted. It was averred that no proceedings under various sections of the Companies Act, 2013, or the Companies Act, 1956, were pending against any of the Applicant Companies. The Board of Directors of the Applicant Companies unanimously approved the proposed scheme in their separate meetings held on 31.08.2016.

2. Dispensation with the Requirement of Convening and Holding Meetings of Equity Shareholders and Unsecured Creditors:
The application sought dispensation with the requirement of convening and holding meetings of equity shareholders and unsecured creditors of the Applicant Companies to consider and approve the proposed scheme. The Transferor Companies and the Transferee Company obtained written consents/NOCs from the requisite majority of their equity shareholders and unsecured creditors. For instance, Transferor Company no.1 had 8 equity shareholders and 4 unsecured creditors, all of whom provided written consents/NOCs. Similar consents were obtained from the equity shareholders and unsecured creditors of the other Transferor Companies and the Transferee Company, with the details of percentages and values provided in the judgment. The Court noted that it has the power to dispense with the requirement of convening meetings if written consent/NOC has been given by the requisite majority of members and/or creditors, referencing a previous decision in Company Application (M) 150 of 2016.

3. Dispensation with the Requirement of Publishing Notices of the Meetings in Newspapers:
A prayer was also sought for the dispensation of the requirement of publishing notices of the meetings of shareholders and creditors in newspapers. Given that the requirement of convening meetings of equity shareholders and unsecured creditors was dispensed with, the Court also dispensed with the requirement of publishing notices for the said meetings in newspapers.

Conclusion:
In view of the written consent/NOC obtained by the requisite majority of equity shareholders and unsecured creditors of the Applicant Companies, the Court dispensed with the requirement of convening and holding the meetings of equity shareholders and unsecured creditors to consider and approve the proposed scheme. Consequently, the requirement of publishing notices for the said meetings in newspapers was also dispensed with. The application was allowed and disposed of accordingly.

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