2020 (12) TMI 916 - Tri - Companies Law

Approval of Scheme of Amalgamation - Section 230-232 of Companies Act - HELD THAT - Various directions regarding holding and convening of various meetings, issued - various directions regarding issuance of notices for the meetings to be held, is also issued. Application admitted - the scheme is approved.

Summary

Issues:
1. Approval of Scheme of Amalgamation
2. Rationale for the Scheme
3. Dispensation of meetings for Equity Shareholders, Secured and Unsecured Creditors
4. Meetings of Trade/Sundry Creditors
5. Appointment of Chairman and Scrutinizer for meetings

Approval of Scheme of Amalgamation:
The Counsel for the Applicant Companies presented that the Scheme involved the Amalgamation of two companies along with their respective shareholders. The Board of Directors of the companies approved the Scheme in meetings held on January 6, 2020, with an appointed date of April 1, 2019.

Rationale for the Scheme:
The rationale behind the Amalgamation was to achieve benefits such as reducing overheads, administrative work, and inefficiencies by optimizing profitability and internal economies. The Scheme aimed at streamlining functions and reducing duplication to enhance operational efficiency.

Dispensation of Meetings:
Meetings for Equity Shareholders of both companies were dispensed with due to consent affidavits from all shareholders. Secured and Unsecured Creditors of the 1st Applicant Company were not required to convene meetings as there were none. However, Trade/Sundry Creditors of the 2nd Applicant Company were required to convene a meeting for approval of the Scheme.

Meetings of Trade/Sundry Creditors:
Trade/Sundry Creditors of the 2nd Applicant Company were to convene a meeting for approval of the Scheme. Notices were to be sent out at least one month before the meeting, and the meeting details were to be published in newspapers. The Chairman and Scrutinizer were appointed for the meeting, with specific roles and responsibilities defined.

Appointment of Chairman and Scrutinizer:
The Chairman and Scrutinizer for the Trade/Sundry Creditors' meeting were appointed with prescribed fees. Provisions for voting by proxy and authorized representatives were outlined, along with the determination of the value of each creditor. The Chairman was directed to report the meeting results to the Tribunal promptly.

In conclusion, the judgment outlined the process and requirements for the approval of the Scheme of Amalgamation, including the dispensation of certain meetings, convening of others, and the appointment of necessary officials for smooth conduct and reporting of the proceedings.