2021 (6) TMI 688 - Tri - Companies Law

Approval of scheme of merger (by absorption) - seeking dispensation of the meeting of the equity shareholders, secured creditors and unsecured creditor - sections 230-232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT - It is found that no list of shareholders as well as unsecured creditors has been filed. The certificate so issued by the chartered accountant, it only reflects the total number of shareholders ; annexed as annexure L at page No. 411 of the application, however, no descriptive details have been annexed. Further, CA certificate annexed as annexure M at page No. 412 of the application only shows the value of the creditors not the number of creditors, consequent upon which the share- holders are not identified from which consent affidavit ought to be obtained for dispensation of the meeting as sought for. In the instant matter there are large number of shareholders and creditors and none of them has filed their consent/no objection towards the scheme of merger/amalgamation, as such due to want of such written consent by way of affidavit from the side of share- holders/creditors, the prayer for dispensation of the meeting cannot be allowed - applicant-companies shall take steps as per section 230(5) of the Companies Act, by issuing notice to the Central Government through Regional Director (North-Western Region), Ministry of Corporate Affairs, the Income-tax Authorities, Registrar of Companies, Gujarat, RBI, and respective stock exchanges where the company is listed and other Sectoral Regulators. The dispensation of the meeting of the equity shareholders and creditors of the company as prayed for in the application is not allowed.

Issues Involved:
1. Dispensation of the meeting of equity shareholders, secured creditors, and unsecured creditors.
2. Compliance with statutory requirements and procedural mandates.
3. Examination of precedents and legal provisions regarding dispensation of meetings.

Issue-wise Detailed Analysis:

1. Dispensation of the Meeting of Equity Shareholders, Secured Creditors, and Unsecured Creditors:
The applicant-company, Ambuja Cements Ltd., sought dispensation of the meeting of equity shareholders, secured creditors, and unsecured creditors concerning the scheme of merger with Dirk India P. Ltd. The applicant argued that since Dirk India P. Ltd. is a wholly-owned subsidiary, there is no need for such meetings. The company cited various judgments, including those from the National Company Law Tribunal (NCLT) Mumbai Bench and the National Company Law Appellate Tribunal (NCLAT), to support its claim. However, the Tribunal noted that the cited judgments involved cases where written consents or affidavits from shareholders and creditors were provided, which was not the case here. The Tribunal emphasized that the applicant-company did not provide any consent affidavits from the shareholders or creditors, which is crucial for dispensing with meetings.

2. Compliance with Statutory Requirements and Procedural Mandates:
The Tribunal observed that the applicant-company did not comply with its own board resolution, which required obtaining requisite approvals, sanctions, consents, and no objections from shareholders and creditors. Additionally, the Tribunal highlighted the absence of detailed lists of shareholders and unsecured creditors, which are necessary to ascertain the consent for the scheme. The Tribunal referred to Section 230(9) of the Companies Act, 2013, which allows dispensation of meetings of creditors if at least ninety percent in value agree and confirm the scheme by way of an affidavit. However, no such provision exists for shareholders under the Act or Rules.

3. Examination of Precedents and Legal Provisions Regarding Dispensation of Meetings:
The Tribunal examined several precedents, including the Full Bench judgment of the NCLT Kolkata Bench and the NCLAT's decision in the DLF case, where meetings were dispensed with based on written consents from shareholders and creditors. The Tribunal noted that in those cases, the dispensation was granted due to the presence of consent affidavits, which were missing in the present case. The Tribunal also referred to the resolution passed by the applicant-company's board, which required obtaining consents from shareholders and creditors, further reinforcing the need for compliance with this requirement.

Conclusion:
The Tribunal concluded that due to the absence of consent affidavits from shareholders and creditors and the non-compliance with the board resolution, the dispensation of meetings could not be granted. The Tribunal directed the applicant-company to convene the meetings of shareholders and creditors and appointed Mr. Kiran Shah as chairman and Mr. M.C. Gupta as scrutinizer for the meetings. The applicant-company was also instructed to issue notices to relevant authorities, including the Central Government, Income-tax Authorities, Registrar of Companies, RBI, and respective stock exchanges, as per Section 230(5) of the Companies Act, 2013. The dispensation of the meeting of equity shareholders and creditors was not allowed, and the application was disposed of with the above observations.

← Previous Next →