2021 (7) TMI 193 - Tri - Companies Law

Composite Scheme of Arrangement - seeking dispensation as well as holding and convening of various meetings - HELD THAT - The meetings of the Shareholders of all the applicant companies as well as meetings of the Unsecured Creditors of the Applicant Companies 2 to 8 are hereby dispensed with. Since there are NIL Secured Creditors in Applicant Companies No. 2, 3, 4, 5, 6 and 7, question for convening of meetings of Secured Creditors of Applicant Companies No. 2, 3, 4, 5, 6 and 7 does not arise at all. Various directions regarding holding and convening of various meetings issued - directions regarding issuance of notices also issued - application allowed.

Issues Involved:
1. Dispensation of meetings of Equity Shareholders and Unsecured Creditors.
2. Directions for convening and holding meetings of Secured Creditors.
3. Approval and rationale of the Composite Scheme of Arrangement.
4. Compliance with statutory requirements and accounting standards.
5. Reporting and procedural compliance for convening meetings.

Detailed Analysis:

1. Dispensation of Meetings of Equity Shareholders and Unsecured Creditors:
The Applicant Companies sought dispensation of the meetings of Equity Shareholders and Unsecured Creditors for certain companies. The Tribunal noted that all Equity Shareholders of the Applicant Companies had given their written consent through affidavits, approving the proposed Scheme and waiving their right to attend the meeting. Similarly, Unsecured Creditors of Applicant Companies 2 to 8 had also provided their written consent. Therefore, the Tribunal dispensed with the meetings of the Equity Shareholders of all Applicant Companies and the Unsecured Creditors of Applicant Companies 2 to 8.

2. Directions for Convening and Holding Meetings of Secured Creditors:
Applicant Company 1 and Applicant Company 8 required directions for holding meetings of their Secured Creditors. The Tribunal directed Applicant Company 1 to convene and hold individual meetings of Secured Creditors and Unsecured Creditors on 5.8.2021 at their registered office. Similarly, Applicant Company 8 was directed to hold a meeting of its Secured Creditors on 5.8.2021 at its registered office. Notices and advertisements for these meetings were to be issued at least one month prior to the meeting date.

3. Approval and Rationale of the Composite Scheme of Arrangement:
The Composite Scheme of Arrangement involved the amalgamation of six companies with Excelsource International Private Limited and the demerger of a business undertaking from Metmin Resource Consultants Private Limited into Excelsource International Private Limited. The Scheme aimed to eliminate inter-company transactions, streamline operations, achieve cost savings, and enhance shareholder value. The Tribunal found that the Scheme was in the best interests of the shareholders, employees, and creditors, and did not have any adverse effects on them.

4. Compliance with Statutory Requirements and Accounting Standards:
The Applicant Companies stated that the accounting treatment specified in the Scheme conformed with the Accounting Standards prescribed by the Central Government under Section 133 of the Companies Act, 2013. Additionally, the Competition Commission of India was not concerned with the proposed Scheme. There were no pending investigations or proceedings under the Companies Act against the Applicant Companies.

5. Reporting and Procedural Compliance for Convening Meetings:
The Tribunal appointed Mr. S. Samdani and Mr. Suresh Kumar Kabra as Chairpersons for the meetings of Secured and Unsecured Creditors of Applicant Company 1 and Secured Creditors of Applicant Company 8. Ms. Megha Dave and Mr. Chirag Shah were appointed as Scrutinizers. The Chairpersons were tasked with issuing notices and advertisements for the meetings, ensuring compliance with procedural requirements, and reporting the results to the Tribunal within 30 days of the meetings. The Tribunal also directed that notices be sent to relevant authorities like the Central Government, Registrar of Companies, and Income Tax Authorities, allowing them 30 days to make representations.

Conclusion:
The Tribunal allowed the joint company application, directing the convening and holding of meetings for Secured and Unsecured Creditors as specified, and ensuring compliance with procedural and statutory requirements. The Scheme was deemed beneficial for all stakeholders and was approved to proceed with the stipulated directions.

← Previous Next →