2021 (6) TMI 785 - Tri - Companies Law

Approval of Scheme of Amalgamation - seeking appropriate directions for convening and dispensing the meetings of shareholders and creditors of both the Applicant companies for approval of the proposed Scheme of Amalgamation - Sections 230 and 232 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and the National Company Law Tribunal Rules, 2016 - HELD THAT - The certificates of statutory auditors of all the applicant companies confirming that the accounting treatment in the scheme is in compliance of and in conformity with Section 133 of the Companies Act, 2013 have been placed on record. Various directions regarding holding and convening of various meetings issued - directions regarding issuance of various SCN also issued - the scheme is approved - application allowed.

Issues:
Application under Sections 230 and 232 of the Companies Act, 2013 for seeking directions for convening and dispensing meetings of shareholders and creditors for approval of Scheme of Amalgamation between two companies.

Analysis:
1. Jurisdiction and Incorporation Details:
The application was jointly filed by two companies under Sections 230 and 232 of the Companies Act, 2013 for approval of a Scheme of Amalgamation. The Transferor Company was incorporated under the Companies Act, 1956, with specific details regarding its share capital and shareholders. The Transferee Company, originally a private limited company, converted into a public limited company with detailed information on its authorized share capital and creditors.

2. Approval of Scheme and Financial Statements:
The board of directors of both companies unanimously approved the proposed Scheme of Amalgamation. The companies submitted their Memorandum and Articles of Associations along with audited financial statements for the year ending 31.03.2020. It was also confirmed that no investigation proceedings were pending against any of the applicant companies.

3. Scheme Details and Compliance:
The Scheme of Amalgamation was represented as non-prejudicial to the interests of shareholders and creditors of the companies. The statutory auditors confirmed compliance with Section 133 of the Companies Act, 2013. Directions were issued for convening and dispensing meetings of shareholders and creditors of both companies separately.

4. Directions for Meetings:
For the Transferor Company, the meeting of equity shareholders was dispensed with due to 100% ownership by the Transferee Company. No secured or unsecured creditors were present in the Transferor Company. For the Transferee Company, directions were given for convening meetings of equity shareholders, secured creditors, and unsecured creditors on specified dates via video conferencing.

5. Appointment of Officials and Compliance:
Specific individuals were appointed as Chairperson, Alternate Chairperson, and Scrutinizer for the meetings. Provisions were made for quorum requirements, adjournments, and maintenance of attendance records. Fees for officials and compliance with notice requirements were also detailed in the judgment.

6. Additional Compliance and Notices:
The judgment included provisions for sending individual notices, publishing advertisements, and serving notices to relevant authorities and regulatory bodies. Furnishing copies of the Scheme to creditors and providing affidavits of service were also mandated.

7. Strict Compliance and Conclusion:
All directions were to be strictly complied with in accordance with applicable laws and regulations. The judgment concluded with the application being allowed in the specified terms, with instructions for serving copies of the order to the parties involved.

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