2020 (10) TMI 120 - Tri - Companies Law

Sanction of Scheme for Merger by Absorption - section 230-232 of the Companies Act, 2013 - HELD THAT - The applicant company to serve various notices - The Applicant Companies shall host the notices along with a copy of the Scheme on their respective websites, if any. The Applicant Companies shall file a compliance report with the Registry in regard to the directions given in this Order in lieu of the customary affidavit of service, due to the lockdown situation prevailing now.

Issues:
- Scheme for Merger by Absorption of three companies
- Convening meetings of Equity Shareholders and Preference Shareholders
- Appointment of Chairpersons and Scrutiniser for the meetings
- Quorum requirements and provisions for proxies
- Reporting results of the meetings to the Tribunal
- Notice to be issued to Unsecured Creditors
- Serving notices to regulatory authorities
- Appointment of Chartered Accountants for scrutiny of books of accounts
- Compliance report filing by Applicant Companies

Scheme for Merger by Absorption:
The judgment pertains to a Scheme for Merger by Absorption of three companies, involving the transfer of businesses related to pharmaceutical products and vaccines. The Scheme aims to merge two Transferor Companies with a Transferee Company, with specific details about the businesses and operations of each company provided in the judgment.

Convening Meetings:
The judgment outlines the detailed procedures for convening and conducting meetings of Equity Shareholders and Preference Shareholders of the Applicant Companies. It specifies the dates, times, and methods of holding these meetings, including provisions for video conferencing in light of the Covid-19 pandemic situation.

Appointment of Chairpersons and Scrutiniser:
The judgment appoints Chairpersons for the meetings of Equity Shareholders and Preference Shareholders, along with a Scrutiniser for each meeting. Specific individuals are designated for these roles, and their responsibilities and remuneration are clearly defined in the judgment.

Quorum Requirements and Proxies:
The judgment establishes the quorum requirements for the meetings and allows for proxies to be used for voting purposes. It details the procedures for adjournment of meetings in case of insufficient quorum and sets out the conditions under which valid proxies will be considered.

Reporting to the Tribunal:
The judgment mandates the Chairpersons of the meetings to report the results to the Tribunal within a specified timeframe. The format for reporting and the rules for filing the report are outlined in the judgment.

Notice to Unsecured Creditors:
The judgment directs the Applicant Companies to issue notices to all Unsecured Creditors, ensuring that they are informed about the proposed Scheme and given the opportunity to submit representations to the Tribunal. The method of sending these notices and the obligations of the Applicant Companies in this regard are clearly defined.

Serving Notices to Regulatory Authorities:
The judgment requires the Applicant Companies to serve notices to various regulatory authorities, including the Regional Director, Registrar of Companies, Income Tax Authority, Reserve Bank of India, and Department of Pharmaceuticals. The response from these authorities is crucial for the approval of the proposed Scheme.

Appointment of Chartered Accountants:
The judgment appoints a specific firm of Chartered Accountants to assist the Official Liquidator in scrutinizing the books of accounts of the Transferor Companies. The fees for this service and the implications of non-response within the stipulated timeframe are clearly outlined in the judgment.

Compliance Report Filing:
The judgment mandates the Applicant Companies to file a compliance report with the Registry regarding the directions given in the Order. This requirement replaces the customary affidavit of service due to the prevailing lockdown situation, emphasizing the importance of adhering to the specified procedures.

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