2015 (4) TMI 986 - HC - Companies Law

Application for Scheme of Amalgamation - Dispensation of convening the meetings of their equity shareholders, secured and unsecured creditors - Held that - The transferor company has 02 equity shareholders. Both the equity shareholders have given their consents/no objections in writing to the proposed Scheme of Amalgamation. Their consents/no objections have been placed on record. They have been examined and found in order. In view thereof, the requirement of convening the meeting of the equity shareholders of the transferor company to consider and, if thought fit, approve, with or without modification, the proposed Scheme of Amalgamation is dispensed with. There is no secured or unsecured creditor of the transferor company, as on 11th March, 2015. - Scheme of Amalgamation approved.

Summary

Issues:
Application under Sections 391 and 394 of the Companies Act, 1956 for dispensing with the requirement of convening meetings of equity shareholders and creditors to consider Scheme of Amalgamation.

Analysis:
The joint application filed under Sections 391 and 394 of the Companies Act, 1956 sought directions to dispense with the need for meetings of equity shareholders and creditors for the proposed Scheme of Amalgamation between two companies. The transferor and transferee companies were both based in New Delhi, falling under the jurisdiction of the Delhi High Court. The transferor company was incorporated in 2009, while the transferee company underwent name changes and relocated its registered office to Delhi. The share capital details of both companies were provided in the application, along with copies of their Memorandum and Articles of Association, audited balance sheets, and the Scheme of Amalgamation.

The Scheme of Amalgamation aimed at reducing overheads, improving operational efficiency, and leveraging combined assets for sustainable business growth. It was highlighted that no shares would be issued or consideration paid due to the transferor company being a wholly owned subsidiary of the transferee company. The application confirmed the absence of pending proceedings under relevant sections of the Companies Act, 1956 and 2013 against the applicant companies. Unanimous approval for the Scheme was obtained from the Board of Directors of both companies in separate meetings. Consent from equity shareholders of the transferor company was also secured in writing, dispensing with the need for a shareholders' meeting. Additionally, there were no secured or unsecured creditors as of the specified date.

In conclusion, the High Court allowed the application, dispensing with the requirement for meetings of equity shareholders and creditors for the proposed Scheme of Amalgamation between the two companies.