2021 (6) TMI 490 - Tri - Companies Law

Approval of scheme of Amalgamation - Section 232 Read with Section 230 and Section 66 of the Companies Act, 2013 - HELD THAT - Section 230(i) of Companies Act, 2013 contemplates holding of meeting unless 90% of the Creditors gave consent by way of Affidavits to dispense with meetings. In this case, all the equity shareholders, preference shareholders of the Applicant Companies gave their consent by way of affidavits. The unsecured creditors of the first Applicant Company have not given consent by way of Affidavits. Unsecured creditors of the second and third Applicant Companies have given their consent stating no objection to the scheme by way of affidavits. Therefore, the request of the first Applicant Company for conveying meeting of unsecured creditors be convened and held in the manner directed. Application allowed.

Issues Involved:
1. Dispensation of meetings for equity shareholders and preference shareholders.
2. Convening meetings for unsecured creditors.
3. Approval of Scheme of Arrangement.
4. Compliance with statutory requirements and notifications.

Detailed Analysis:

1. Dispensation of Meetings for Equity Shareholders and Preference Shareholders:
The joint application filed by the Applicant Companies sought to dispense with the requirement of holding meetings for equity shareholders and preference shareholders. The Tribunal noted that all equity shareholders and preference shareholders of the Applicant Companies provided their consent by way of affidavits. Therefore, the Tribunal ordered the dispensation of meetings for equity shareholders and preference shareholders of the First, Second, and Third Applicant Companies.

2. Convening Meetings for Unsecured Creditors:
The Tribunal observed that the unsecured creditors of the First Applicant Company did not provide consent by way of affidavits, whereas the unsecured creditors of the Second and Third Applicant Companies did. Consequently, the Tribunal ordered the convening of a meeting for the unsecured creditors of the First Applicant Company. The meeting was scheduled for 5th June 2021 at 10 AM at the registered office, with a quorum fixed at 2 unsecured creditors either in person or proxy. The Tribunal appointed a Chairman and a Scrutinizer to oversee the meeting and fixed their fees. Notices for the meeting were to be published in specified newspapers and sent to the unsecured creditors by ordinary post, email, or hand delivery.

3. Approval of Scheme of Arrangement:
The Scheme of Arrangement involved the demerger of the Demerged Undertakings of IncNut Digital Private Limited into IncNut Stylecraze Private Limited and Momjunction Private Limited. The Tribunal reviewed the rationale behind the scheme, which included benefits such as focused management, enhanced value for shareholders, and better growth opportunities. The Tribunal also examined the consideration for the demerger, which involved issuing equity shares and CCPS of the resulting companies to the shareholders of the demerged company. An independent valuation report was obtained to recommend the consideration.

4. Compliance with Statutory Requirements and Notifications:
The Tribunal required the Applicant Companies to serve notices to various statutory authorities, including the Regional Director, Registrar of Companies, and Income Tax Authority, as per Section 230(5) of the Companies Act, 2013. If no objections were received within 30 days, it would be presumed that these authorities had no objections to the proposed scheme. The Tribunal also directed the Chairman to file an affidavit confirming compliance with the directions regarding convening and issuance of notices. The conclusion of the meeting was to be reported as per Rule 14 of the Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016.

Conclusion:
The Tribunal dispensed with the meetings of equity shareholders and preference shareholders for all Applicant Companies and ordered the convening of a meeting for the unsecured creditors of the First Applicant Company. The Tribunal emphasized compliance with statutory requirements and allowed any interested person to present their contentions when the Applicant Companies seek final approval of the Scheme.

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