2021 (1) TMI 1028 - Tri - Companies Law

Scheme of Amalgamation - seeking directions of this Tribunal to dispense with the requirement of convening meetings of Shareholders Secured Creditors and Un-secured Creditors of the Transferor Companies No. 1 2 and the Transferee Company - HELD THAT - The Board of Directors of all the Applicant Companies in the meeting held on 25 th November 2020 considered and unanimously approved the proposed Scheme of Amalgamation - The Applicant Companies have filed the Audited Financial Statements for the financial year ended 31st March 2020 and the Unaudited Financial Statements (Provisional) for the financial period ended 30th September 2020. It is stated that no proceeding for inspection inquiry or investigation under the provisions of the Companies Act 2013 or under the provisions of the Companies Act 1956 is pending against the Applicant Companies - t is stated by the Applicant Companies that the proposed Scheme of Amalgamation does not envisage any buy back of shares There is no proposal for reduction of share capital except to the extent of cancellation of any cross holding of shares between Transferor Companies; and between the Transferor Companies and the Transferee Company as the case may be - The Applicants has stated that the accounting treatment proposed in the Scheme of Amalgamation is in conformity with the accounting standards prescribed under Section 133 of the Companies Act 2013. Certificates from the respective Statutory Auditors of all the Companies have been filed along with the Application. This Tribunal directs that in view of the consent affidavits given by the Shareholders of the Transferor Company No. 1 2 and The Transferee Company the requirement of convening meeting of the Shareholders of the Transferor Company No. 1 2 and The Transferee Company for the purpose of considering and if thought fit approving the proposed Scheme of Amalgamation are dispensed with - there is no Secured Creditors in the Transferor Company No 1 2 and the Transferee Company accordingly the requirement of convening meeting of the Secured Creditors of the Transferor Company No 1 2 and the Transferee Company for the purpose of considering and if thought fit approving the proposed Scheme of Amalgamation is dispensed with - This Tribunal directs that In view of consent affidavits given by the Un-secured Creditors of the Transferor Company No. I 2 and The Transferee Company the requirement of convening meetings of the Unsecured Creditors of Transferor Company No 1 2 and the Transferee Company for the purpose of considering and if thought fit approving the proposed Scheme of Amalgamation are dispensed with. The Applicant Companies are directed to serve the notice along with a copy of the Scheme upon; (a) the Central Government through the office of the Regional Director Northern Region Ministry of Corporate Affairs New Delhi (b) the Registrar of Companies Uttar Pradesh Kanpur; and (c) The Official Liquidator Uttar Pradesh Allahabad; and (d) the Income Tax Department with a direction that they may submit their representation(s) if any within a period of 30 (thirty) days from the date of receipt of such notice to the Tribunal and a copyies Of such representation(s) shall simultaneously be served upon the Applicant Companies failing which it shall be presumed that the authorities have no representation(s) to make on the Scheme of Amalgamation as per Rule 8 of the Companies (Compromises Arrangements and Amalgamations) Rules 2016 - Application disposed.

Summary

Issues:
Application under Sections 230 & 232 of the Companies Act, 2013 for dispensing with the requirement of convening meetings of Shareholders, Secured Creditors, and Unsecured Creditors of the Transferor and Transferee Companies.

Detailed Analysis:

1. Background of Companies:
The Applicant Transferor Companies and the Transferee Company are closely held private limited Group Companies under common management and control. The Transferor Companies are engaged in the purchase, sale, and trading of agriculture products and commodities, while the Transferee Company is involved in providing banqueting services.

2. Approval of Proposed Scheme:
The Board of Directors of all Applicant Companies unanimously approved the proposed Scheme of Amalgamation, aiming to consolidate resources, optimize operations, and enhance overall business efficiency to meet future challenges in the competitive business environment.

3. Financial Statements and Compliance:
The Applicant Companies filed Audited Financial Statements for the year ended March 31, 2020, and Unaudited Financial Statements for the period ended September 30, 2020. No pending proceedings under the Companies Act, 2013 or 1956 were reported against the Applicant Companies.

4. Contentions for Dispensing with Meetings:
The Applicant Companies provided details of Shareholders, Secured Creditors, and Unsecured Creditors, with all necessary consents obtained. The Applicant's representative argued for dispensing with the requirement of convening meetings based on the consents received and the absence of Secured Creditors.

5. Tribunal's Decision:
The Tribunal directed to dispense with the requirement of convening meetings of Shareholders, Secured Creditors, and Unsecured Creditors based on the consent affidavits submitted by the parties. The Applicant Companies were instructed to serve notices to relevant authorities for representations within 30 days, failing which no objections would be presumed.

6. Final Disposition:
The Tribunal disposed of the application accordingly, providing directions for serving notices to concerned authorities and ensuring compliance with the Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016.

This judgment showcases the procedural and substantive aspects of seeking dispensation with meetings for the proposed Scheme of Amalgamation, emphasizing compliance, shareholder consents, and regulatory requirements under the Companies Act, 2013.