2020 (10) TMI 228 - Tri - Companies Law

Sanction of Scheme of Arrangement and Demerger - Sections 230 to 232 read with Section 66 and other applicable provisions of the Companies Act, 2013 - HELD THAT - Notices for various meetings to be served - The authorities, who desire to make any representation under sub-section (5) of Section 230 shall send the same to this Tribunal with a copy of the same to be supplied to the Applicant Companies within a period of 30 (Thirty) days from the date of such service. Application disposed off.

Summary

Issues:
1. Scheme of Arrangement involving De-merger and transfer of Undertaking
2. Jurisdiction of National Company Law Tribunal, Ahmedabad
3. Empowerment of Companies to enter into Scheme of Arrangement
4. Rationale for proposed scheme explained
5. Valuation Report and Scheme of Arrangement submitted
6. Proceedings and investigations status of Applicant Companies
7. Reliefs prayed by Applicant Companies
8. Dispensation of meetings for Equity Shareholders and Creditors
9. Orders passed by the Tribunal for convening separate meetings

Analysis:
1. The judgment pertains to a joint Application filed by two Applicant Companies under Sections 230 to 232 of the Companies Act, 2013, for a Scheme of Arrangement involving De-merger and transfer of the De-merged Undertaking related to Performance Business and support services.
2. Both Applicant Companies have their registered offices in Vadodara, Gujarat, falling under the jurisdiction of the National Company Law Tribunal, Ahmedabad.
3. The Companies are authorized by their Memorandum of Associations to enter into the Scheme of Arrangement, with financial statements and divisional breakup of Assets and Liabilities provided as evidence.
4. The rationale for the proposed scheme lies in the distinct market segments and risk profiles of the businesses, necessitating separate management teams for effective focus and attention.
5. Valuation Report, Exchange Ratio of Shares, and Scheme of Arrangement details have been submitted along with certificates confirming Accounting Treatment compliance.
6. Confirmation was provided that no proceedings or investigations are pending against the Applicant Companies, with Statutory Auditors certifying the proposed Accounting Treatment.
7. The Applicant Companies sought various reliefs, including dispensation of meetings for Equity Shareholders and Creditors.
8. The Tribunal, after considering submissions, dispensed with meetings for Equity Shareholders and Creditors of the Applicant Resulting Company but ordered separate meetings for Secured and Unsecured Creditors of the Applicant De-merged Company.
9. Detailed directions were issued for convening and conducting the said meetings, including appointment of Chairman, scrutinizer, voting procedures, notice requirements, and compliance with statutory rules and timelines.

This comprehensive analysis covers the key issues addressed in the legal judgment, providing a detailed overview of the Scheme of Arrangement and the Tribunal's orders regarding the conduct of meetings for approval and implementation of the proposed scheme.