2020 (10) TMI 1111 - Tri - Companies Law

Sanction of Scheme of Arrangement - section 230-232 of Companies Act, 2013 - HELD THAT - This Bench hereby directs the Applicant Companies to issue notices for various meetings required to be held - scheme sanctioned.

Summary

Issues Involved:
1. Approval of Scheme of Arrangement of Investment Division between two companies.
2. Consent of shareholders and creditors for the scheme.
3. Dispensation of meetings of equity shareholders and unsecured creditors.
4. Notice issuance to unsecured creditors and regulatory authorities.

Analysis:
1. The judgment deals with the approval of a Scheme of Arrangement of Investment Division between two companies, the Demerged Company and the Resulting Company. The Scheme aims to divest the Demerged Undertaking of the Demerged Company to the Resulting Company for strategic reasons, focusing on core business activities and enhancing shareholder value. The Scheme has been approved by the Board of Directors of both companies, with an Appointed Date fixed under the Scheme.

2. The judgment highlights that consent affidavits have been procured from all Equity Shareholders of both companies, accounting for 100% of the issued, subscribed, and paid-up Share Capital. It is noted that there are no Secured Creditors in either company, eliminating the need to send notices to them. However, there are numerous Unsecured Creditors in both companies, and the Scheme is categorized under Section 230(1)(b) of the Companies Act, 2013, as it does not involve compromise or arrangement with creditors affecting their rights.

3. The judgment dispenses with the meetings of Equity Shareholders and Unsecured Creditors based on the consents obtained. However, the Bench directs the Applicant Companies to issue notices to all Unsecured Creditors, allowing them to submit representations within thirty days. The notice must also be served to regulatory authorities, and compliance reports are required to be filed with the registry regarding the notice issuance.

4. The detailed directions in the judgment emphasize the procedural aspects of issuing notices to Unsecured Creditors, regulatory authorities, and filing compliance reports. The Applicant Companies are instructed to follow specific methods of notice delivery and ensure timely submission of representations. The judgment aims to ensure transparency and adherence to legal requirements in the Scheme's approval process, safeguarding the interests of all stakeholders involved.