2022 (3) TMI 237 - Tri - Companies Law

Sanction of Scheme of Amalgamation - Section 230 to 232 of the Companies Act, 2013 (for brevity The Act ) read with Companies (Compromises, Arrangements and Amalgamation) Rule, 2016 - HELD THAT - The Tribunal, in view of the settled law, is empowered to dispense with the meeting of shareholders if they have given their consent. Further, in view of Section 230(9) of the Companies Act, 2013, the Tribunal is empowered to dispense with calling of a meeting of creditors or class of creditors where such creditors or class of creditors, having at least ninety per cent value, agree and confirm, by way of affidavit, to the scheme of compromise or arrangement. Various directions with regard to holding, convening and dispensing with various meetings issued - directions with regard to issuance of notices also issued - the scheme is approved - application allowed.

Summary

Issues:
Application under Sections 230-232 of Companies Act, 2013 for Scheme of Amalgamation - Dispensation of shareholder and creditor meetings - Maintainability of application - Representation of companies - Approval of proposed Scheme - Share valuation - Compliance with Companies Act, 2013.

Analysis:
The judgment pertains to an application filed by Applicant Companies under Sections 230-232 of the Companies Act, 2013, seeking approval for a Scheme of Amalgamation. The companies requested dispensation of meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors to consider and approve the Scheme. The application was supported by affidavits filed by an authorized signatory. It was represented that the Scheme did not involve corporate debt restructuring and was maintainable under Rule 3(2) of the Companies (Compromises, Arrangements and Amalgamation) Rules, 2016. The registered offices of all companies fell within the jurisdiction of the Tribunal.

The proposed amalgamation was to be carried out under Sections 230-232 of the Companies Act, 2013, with an appointed date of 01.04.2021 if sanctioned by the Tribunal. Each Transferor Company, as well as the Transferee Company, had obtained consent affidavits from all shareholders and creditors, seeking dispensation from convening and holding meetings due to unanimous approval of the proposed Scheme by the Board of Directors.

The Tribunal considered the representations made and noted that all shareholders and creditors had given their consent through affidavits. Referring to Section 230(9) of the Companies Act, 2013, the Tribunal found that it was empowered to dispense with meetings if shareholders and creditors agreed to the scheme. Accordingly, the Tribunal directed dispensation of meetings for all companies involved, including Transferor Companies and the Transferee Company, due to unanimous consent received.

The judgment detailed the incorporation and share capital structure of each company involved, along with the unanimous approval of the proposed Scheme by their respective Boards of Directors. The Tribunal also reviewed the financial statements, compliance with accounting standards, and the share valuation report submitted by the companies. Ultimately, the Tribunal allowed the application in CA (CAA) 12 (ND) of 2022, granting dispensation of meetings and approving the Scheme of Amalgamation as sought by the Applicant Companies.