2023 (6) TMI 196 - AT - Companies Law

Sanction of scheme of Amalgamation - Section 230-232 of Companies Act - HELD THAT - As per Section 230(9) of the Companies Act, 2013, the Tribunal may dispense with the 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. As the Appellant/Transferor Company No-1 is a closely held family company and sole unsecured creditor, had conceded to the scheme of Amalgamation by way of affidavit, therefore, in terms of section 230(9) of the Companies Act, 2013 the meeting of sole unsecured creditor of Appellant/Transferor Company Appellant No-1 could have been dispensed with by the Tribunal and as such, there are merit in the averments of the Appellant . It is noted that Transferee company did not obtain the NoC/consent from its secured and unsecured creditors. Therefore, the directions were sought by Transferee Company from the Tribunal to convene the meetings of its secured and unsecured creditors - As per Explanation to Rule 5(d) of the Companies (Compromises, Arrangements and Amalgamation Rules,) 2016 the Chairman, inter-alia shall, at the general meeting, at the end of discussions on the resolutions on which voting is to be held, allow voting by use of electronic voting system for all those members who are present at the general meeting but have not cast their votes by availing the remote e-voting facility. Hence, by not allowing to vote in other modes other than in person in meeting of secured and unsecured creditor of Transferee company as permitted as per Companies Act, 2013 and rules made thereunder to vote on resolution is not sustainable and the Tribunal erred on this account. The impugned order deserves to be set aside with direction to look into all these issues in accordance with the law - Appeal allowed.

Summary

Issues Involved:
The judgment involves issues related to dispensation of meetings of shareholders and creditors, voting procedures, errors in the impugned order, and the authority of the Tribunal under relevant provisions of the Companies Act, 2013 and associated rules.

Dispensation of Meetings of Shareholders and Creditors:
The appeal was filed against an order related to the proposed merger of three closely held family companies. The Tribunal largely allowed the prayer for dispensation of meetings but did not dispense with the meeting of a sole secured creditor, which could have been done under Section 230(9) of the Companies Act, 2013. The Tribunal also directed the convening of meetings for secured and unsecured creditors of the transferee company, but allowed only in-person voting, contrary to the provisions allowing proxies under Section 230(4) & (6) and Rules 9, 10, and 13 of the Companies (Compromise, Arrangements and Amalgamations) Rules, 2013.

Errors in the Impugned Order:
The appellant pointed out clerical errors in the impugned order that needed correction by the Tribunal, as detailed in the appeal filed before the Appellate Tribunal. The order was to be examined in light of the relevant laws and regulations to address these issues.

Authority of the Tribunal under Companies Act, 2013:
The Tribunal's authority to dispense with the calling of a meeting of creditors or class of creditors, as per Section 230(9) of the Companies Act, 2013, was highlighted. The Tribunal erred in not allowing voting through proxies in the meetings of secured and unsecured creditors of the transferee company, as permitted by the Companies Act, 2013 and associated rules. The impugned order was set aside, and parties were directed to appear before the Tribunal for further proceedings on a specified date.

Conclusion:
The judgment addressed the issues of dispensation of meetings, errors in the order, and voting procedures under the Companies Act, 2013. It emphasized the need for compliance with relevant provisions and rules while directing corrective action by the Tribunal.