2021 (4) TMI 1066 - Tri - Companies Law

Scheme of amalgamation - seeking to dispensing the meetings of Equity Shareholders, Secured Creditors and Unsecured Creditors - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT - The Tribunal is empowered, under Section 230(9) of the Companies Act, 2013, to dispense with calling of a meeting of creditors or class of creditors, where such creditors or class of creditors, having at least ninety per cent value, agree and confirm, by way of affidavit, to the Scheme of Amalgamation. In the instant case, as detailed supra, the Applicant Companies have filed Certificates given by the Chartered Accountants certifying the number of Equity Shareholders of the respective Companies constituting 100% of Shareholding of the Applicant Companies and the number of Secured/Unsecured Creditors of the Applicant Companies constituting more than 90% have furnished consent affidavits. No purpose would be served in directing the convening of the meetings in question. Therefore, it would be just and appropriate to dispense with the meetings as sought for, on the principle of case of doing business, and to facilitate the Company to file necessary second stage Petition seeking to sanction the Scheme, subject to fulfillment of all statutory conditions, after notice to the respective Statutory Authorities. Application disposed off.

Issues Involved:

1. Dispensation of meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors.
2. Compliance with statutory requirements and accounting standards.
3. Approval and benefits of the Scheme of Amalgamation.
4. Investigation and legal proceedings against the Applicant Companies.
5. Tribunal's authority to dispense meetings and grant relief.

Detailed Analysis:

1. Dispensation of Meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors:

The Applicant Companies, M/s. Embassy Office Ventures Private Limited (Transferor Company) and M/s. Vikas Telecom Private Limited (Transferee Company), filed a Joint Application under Sections 230 to 232 of the Companies Act, 2013, seeking to dispense with the meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors. The Transferor Company has two Equity Shareholders who have provided consent letters in the form of affidavits to dispense with the meetings. Similarly, the Transferee Company has two Equity Shareholders who have also consented to the dispensation of meetings. The Transferor Company has no Secured Creditors and six Unsecured Creditors, with the majority in value consenting to the dispensation. The Transferee Company has two Secured Creditors and 271 Unsecured Creditors, with the majority in value consenting to the dispensation.

2. Compliance with Statutory Requirements and Accounting Standards:

The Chartered Accountants of the Applicant Companies, Chajed & Co. and NSVM & Associates, issued certificates confirming the details of Shareholders and Creditors and compliance with accounting treatment as per Indian Accounting Standards and Generally Accepted Accounting Principles in India. The Board of Directors of both companies passed resolutions approving the Scheme of Arrangement and confirmed compliance with the Companies Act, 2013, and the Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016.

3. Approval and Benefits of the Scheme of Amalgamation:

The Scheme of Amalgamation aims to simplify the shareholding structure, reduce operational costs, and enhance value creation for stakeholders. The benefits include a focused approach to maintaining Embassy Tech Village, simplified management structure, and reduced legal and regulatory compliances. The Transferee Company will issue ordinary equity shares to the equity shareholders of the Transferor Company in specified ratios. The Scheme, if sanctioned, will take effect from April 1, 2021, or another date as directed by the Tribunal.

4. Investigation and Legal Proceedings Against the Applicant Companies:

There are no pending investigation proceedings against the Applicant Companies under Sections 206 to 229 of the Companies Act, 2013, or any other law. Additionally, no proceedings under Section 235 or 250A of the Companies Act, 1956, or winding-up petitions and insolvency proceedings under the IBC, 2016, have been filed against the Applicant Companies.

5. Tribunal's Authority to Dispense Meetings and Grant Relief:

The Tribunal, under Section 230(9) of the Companies Act, 2013, is empowered to dispense with the calling of meetings where creditors or class of creditors holding at least ninety percent value agree to the Scheme by affidavit. The Tribunal reviewed the certificates and consent letters, confirming that the majority of Shareholders and Creditors consented to the Scheme and dispensation of meetings. The Tribunal found no purpose in convening the meetings and granted relief to facilitate the filing of the necessary second stage Petition for sanctioning the Scheme, subject to statutory conditions and notice to statutory authorities.

Conclusion:

The Tribunal disposed of C.A. (CAA) No. 15/BB/2021 with directions to dispense with the meetings, issue paper notifications, and file appropriate Company Petition for the sanction of the Scheme, ensuring compliance with statutory provisions. Any aggrieved party may file a miscellaneous application seeking appropriate directions.

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