2021 (8) TMI 1107 - Tri - Companies Law

Sanction of scheme of merger - section 232 read with section 230 of the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamation) Rules, 2016 - HELD THAT - Various directions regarding holding, convening and dispensation of various meetings issued - directions regarding issuance of notices also issued. The scheme is approved - application allowed.

Issues:
- Joint Company Application for Merger & Amalgamation under Companies Act, 2013.
- Dispensing with Meetings of Equity Shareholders and Creditors.
- Approval of Scheme of Amalgamation between Transferor and Transferee Companies.
- Details of Share Capital and Business Activities of the Companies.
- Approval from Shareholders and Creditors.
- Conducting of Shareholders and Creditors Meetings.
- Appointment of Chairman and Scrutinizer for Meetings.
- Remuneration for Chairman and Scrutinizer.
- Advertisement and Notice Requirements for Meetings.
- Voting by Proxy/Authorised Representatives.
- Reporting Requirements to the Tribunal and Authorities.
- Compliance with Companies Act and Rules.

Detailed Analysis:

1. Joint Company Application for Merger & Amalgamation under Companies Act, 2013:
The Tribunal received a Joint Company Application for Merger & Amalgamation filed by two companies, the Transferor Company and the Transferee Company, under sections 232 and 230 of the Companies Act, 2013, along with the Companies (Compromises, Arrangements and Amalgamation) Rules, 2016.

2. Dispensing with Meetings of Equity Shareholders and Creditors:
The Application sought to dispense with the meetings of Equity Shareholders of both companies and the meetings of unsecured and secured Creditors of the Transferee Company as part of the amalgamation process.

3. Approval of Scheme of Amalgamation between Transferor and Transferee Companies:
The Board of Directors of both companies approved the Scheme of Amalgamation subject to the consent of Shareholders and Creditors, with detailed information provided regarding the Share Capital and business activities of each company.

4. Details of Share Capital and Business Activities of the Companies:
The Application included detailed information about the Authorized, Issued, Subscribed, and Paid-up Share Capital of both companies as well as the main business objectives and activities of each company.

5. Approval from Shareholders and Creditors:
Certificates from Chartered Accountants were submitted confirming the consent of Equity Shareholders and Creditors for the proposed Scheme, with specific details provided for each category of stakeholders.

6. Conducting of Shareholders and Creditors Meetings:
The Tribunal directed the appointed counsel to conduct meetings of Shareholders and Creditors of both companies, specifying the dates, times, and locations for these meetings.

7. Appointment of Chairman and Scrutinizer for Meetings:
Chairpersons and Scrutinizers were appointed for the Equity Shareholders, Secured Creditors, and Unsecured Creditors meetings, with clear instructions on their roles and responsibilities.

8. Remuneration for Chairman and Scrutinizer:
The remuneration for the Chairman/Chairperson and Scrutinizer for each meeting was fixed, with specific amounts mentioned for their services.

9. Advertisement and Notice Requirements for Meetings:
Detailed instructions were provided regarding the publication of advertisements, availability of scheme copies, and the provision of necessary documents to concerned persons before the meeting dates.

10. Voting by Proxy/Authorised Representatives:
Provisions for voting by proxy or authorised representatives were outlined, specifying the required procedures and timelines for filing proxy forms with the companies.

11. Reporting Requirements to the Tribunal and Authorities:
Various reporting requirements were specified, including the submission of affidavits, reports on meeting results, and sending notices to relevant authorities as per the Companies Act and Rules.

12. Compliance with Companies Act and Rules:
The Tribunal ordered compliance with specific sections of the Companies Act and Rules, including sending notices to government authorities and ensuring representation within the stipulated time frames.

In conclusion, the Company Application for Merger & Amalgamation was disposed of by the Tribunal, outlining the detailed procedures and requirements for the approval and implementation of the proposed Scheme between the Transferor and Transferee Companies.

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