2021 (7) TMI 873 - Tri - Companies Law

Scheme of Arrangement - seeking to dispense with the meetings of the Equity Shareholders and Unsecured Creditors of all the Applicant Companies and Secured Creditors of Transferee Company - Sections 230 to 232 Read with Section 66 of the Companies Act, 2013 and Rule 3(2) of the Companies (CAA) Rules, 2016 - HELD THAT - The Companies have followed extant provisions of Companies Act in framing the Scheme in question, which are duly approved by the Board of Directors of the Companies involved. The Statutory Auditors/Chartered Accountants of the Companies have also issued respective Certificates by inter-alia certifying the details of shareholders, creditors, and compliance of accounting treatment as prescribed U/s 133 of the Companies Act, 2013 with reference to the Scheme in question. The Applicant Companies have disclosed all the material facts relating to the Scheme in question and filed necessary documents along with the Application. Various directions regarding holding and convening of various meetings issued - application allowed.

Issues Involved:
1. Dispensation of meetings of Equity Shareholders.
2. Dispensation of meetings of Unsecured Creditors.
3. Dispensation of meetings of Secured Creditors.
4. Compliance with the Companies Act, 2013 and related rules.
5. Approval and adoption of the Scheme of Arrangement.
6. Notification and publication requirements.
7. Right to file miscellaneous applications for aggrieved parties.
8. Permission to file a Company Petition for the sanction of the Scheme of Arrangement.

Issue-wise Detailed Analysis:

1. Dispensation of Meetings of Equity Shareholders:
The Applicant Companies sought to dispense with the meetings of the Equity Shareholders. The Tribunal noted that the Chartered Accountants certified the details of the Equity Shareholders and that most shareholders had filed affidavits consenting to the scheme and confirming no objection to the dispensation of meetings. The Tribunal was convinced that the requirements were met and thus dispensed with the meetings of the Equity Shareholders.

2. Dispensation of Meetings of Unsecured Creditors:
The Applicant Companies also sought to dispense with the meetings of the Unsecured Creditors. The Chartered Accountants certified the details of the Unsecured Creditors, and affidavits were filed by the creditors consenting to the scheme and confirming no objection to the dispensation of meetings. The Tribunal found the submissions satisfactory and dispensed with the meetings of the Unsecured Creditors.

3. Dispensation of Meetings of Secured Creditors:
The Transferee Company sought to dispense with the meetings of its Secured Creditors. The Chartered Accountants provided certificates detailing the Secured Creditors, and the creditors filed affidavits consenting to the scheme and confirming no objection to the dispensation of meetings. The Tribunal was satisfied with the compliance and dispensed with the meetings of the Secured Creditors.

4. Compliance with the Companies Act, 2013 and Related Rules:
The Tribunal reviewed the pleadings and the extant provisions of the Companies Act, 2013, and the Companies (CAA) Rules, 2016. The Tribunal confirmed that the Applicant Companies followed the necessary legal provisions in framing the Scheme of Arrangement, which was duly approved by their Board of Directors. The Statutory Auditors certified compliance with the accounting standards prescribed under Section 133 of the Companies Act, 2013.

5. Approval and Adoption of the Scheme of Arrangement:
The Board of Directors of the Applicant Companies approved and adopted the Scheme of Arrangement in their respective meetings held on 31st March 2021. The rationale for the scheme was to enhance the business operations of the Transferee Company through the amalgamation of three other companies belonging to the same group.

6. Notification and Publication Requirements:
The Tribunal directed the Applicant Companies to issue paper notifications in "The Hindu" (English) and "Udayavani" (Vernacular) about the dispensation of the meetings within ten days from the receipt of the order. This ensures that all stakeholders are informed about the Tribunal's decision.

7. Right to File Miscellaneous Applications for Aggrieved Parties:
The Tribunal provided that any party aggrieved by the order could file a miscellaneous application in the instant Company Application to seek appropriate directions. This provision ensures that any concerns or grievances can be addressed through proper legal channels.

8. Permission to File a Company Petition for the Sanction of the Scheme of Arrangement:
The Tribunal permitted the Applicant Companies to file the necessary Company Petition for the sanction of the Scheme of Arrangement after following the extant provisions of law. This step is crucial for the formal approval and implementation of the scheme.

Conclusion:
The Tribunal, after careful consideration and verification of all relevant documents and compliance with legal provisions, granted the relief sought by the Applicant Companies. The meetings of the Equity Shareholders, Unsecured Creditors, and Secured Creditors were dispensed with, and directions were given for notification and the filing of a Company Petition for the sanction of the Scheme of Arrangement.

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