2020 (12) TMI 195 - Tri - Companies Law

Approval of scheme of Merger - Section 230-232 of the Companies Act, 2013 - HELD THAT - Directions regarding convening and holding of various meetings issued - directions regarding issuance of various notices issued. The scheme is approved.

Issues Involved:
1. Dispensation of meetings for Equity Shareholders, Secured and Unsecured Creditors.
2. Serving notice to regulatory authorities.
3. Compliance with statutory provisions under the Companies Act, 2013.
4. Appointment of Chairman and Scrutinizer for meetings.
5. Voting and reporting procedures for the Scheme of Merger.

Detailed Analysis:

1. Dispensation of Meetings for Equity Shareholders, Secured and Unsecured Creditors:
The Tribunal considered the application under Sections 230-232 of the Companies Act, 2013, for the merger of Jolly Metal Abrasives Private Ltd (Transferor Company) with Blastline India Private Ltd (Transferee Company). The applicants sought dispensation of meetings for Equity Shareholders, Secured, and Unsecured Creditors based on affidavits of consent. The Tribunal noted that 100% of the shareholders and 98.84% of the Unsecured Creditors of the Transferor Company, as well as 100% of the shareholders, 100% of the Secured Creditors, and 83.69% of the Unsecured Creditors of the Transferee Company, supported the Scheme. However, since the consent of Unsecured Creditors of the Transferee Company was below 90%, the meeting for Unsecured Creditors could not be dispensed with.

2. Serving Notice to Regulatory Authorities:
The Tribunal directed both applicant companies to serve notice on the Central Government, Registrar of Companies, Kerala, Income Tax Authorities, and the Official Liquidator. This ensures that all relevant regulatory bodies are informed and can provide their input or raise objections if necessary.

3. Compliance with Statutory Provisions Under the Companies Act, 2013:
The Tribunal emphasized compliance with Section 230(9) of the Companies Act, 2013, which allows dispensation of meetings if creditors holding at least 90% in value consent to the Scheme. The Tribunal also referenced the proviso to Section 230(4), allowing objections only by persons holding not less than 5% of the shareholding. The Tribunal found that the Transferor Company had no Secured Creditors and sufficient consent from Unsecured Creditors, thus dispensing their meetings. However, for the Transferee Company, the meeting of Unsecured Creditors was mandated due to insufficient consent percentage.

4. Appointment of Chairman and Scrutinizer for Meetings:
The Tribunal appointed Shri S. Govinda Rajan as Chairman and Advocate Fiyona Johnson as Scrutinizer for the meeting of Unsecured Creditors of the Transferee Company. Their fees were set at ?15,000 and ?10,000 respectively, plus incidental expenses. They were tasked with reporting the meeting results within two weeks.

5. Voting and Reporting Procedures for the Scheme of Merger:
The Tribunal outlined detailed procedures for conducting the meeting, including sending individual notices 30 days in advance, publishing advertisements in specified newspapers, and allowing voting by various means (in person, proxy, postal ballot, electronic). The Tribunal also provided for the possibility of conducting the meeting via video conferencing due to the Covid-19 pandemic, ensuring the preservation of unedited footage for verification. The Transferee Company was directed to furnish copies of the Scheme to all Unsecured Creditors free of charge and to comply with all statutory requirements.

Final Directions:
The Tribunal issued specific orders for the Transferor and Transferee Companies regarding the dispensation and holding of meetings, appointment of officials, notice requirements, and compliance with statutory provisions. The application was disposed of in accordance with these directions.

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