2022 (8) TMI 373 - Tri - Companies Law

Sanction of composite scheme of demerger - dispensation of the meetings of Shareholders, Secured Creditors and Unsecured Creditors of both the Applicant Companies - Section 230-232 of the Companies Act, 2013 - HELD THAT - Various directions with regard to holding, convening and dispensation with various meetings issued - directions with regard to issuance of various notices issued. Application allowed.

Summary

Issues:
Application for dispensation of meetings of shareholders, secured creditors, and unsecured creditors under Sections 230-232 of the Companies Act, 2013 for a composite scheme of demerger.

Detailed Analysis:
1. Background of Applicant Companies:
- The Applicant Demerged Company is engaged in commercial programming broadcasting and production activities.
- The Applicant Resulting Company focuses on organizing and producing commercial future films and media content.

2. Submissions by Applicant Companies:
- Management believes demerger will enhance focus on specific business activities.
- Board of Directors passed a resolution for the proposed demerger.
- Accounting treatment in the scheme aligns with prescribed standards.
- No pending investigations or proceedings except for a specific case.
- Not regulated by RBI or listed on any stock exchange.

3. Details of Shareholders and Creditors:
- Demerged Company has 4 shareholders and 90 unsecured creditors.
- Resulting Company has 4 shareholders and no creditors.

4. Dispensation of Meetings:
- Shareholders' meetings of both companies are dispensed with due to received consents.
- No secured creditors in either company, so meetings are not required.
- Meeting of unsecured creditors of the Demerged Company is necessary due to a large number of creditors.

5. Tribunal's Directions:
- Meeting of unsecured creditors of Demerged Company scheduled for a specific date.
- Advertisement about the meeting to be published in designated newspapers.
- Notices to be sent to creditors at least one month before the meeting.
- Appointment of Chairman and Scrutinizer for the meeting.
- Prohibition on voting through proxy.
- Chairperson to report compliance with meeting procedures to the Tribunal.
- Submission of meeting results and affidavit within a specific timeframe.

6. Compliance Requirements:
- Demerged Company to send notices to relevant authorities for objections within 30 days.
- Authorities to make representations within the specified period; otherwise, no objections assumed.
- CA (CAA) No. 5 of 2022 allowed and disposed of as per the directions provided.

This detailed analysis covers the key aspects of the judgment, including the background of the companies, submissions made, dispensation of meetings, tribunal's directions, and compliance requirements for the demerger scheme under the Companies Act, 2013.