2021 (7) TMI 356 - Tri - Companies Law

Scheme of Arrangement in the nature of Amalgamation - Seeking dispensation/convening of the meetings of the Unsecured Creditors, Secured Creditors and Equity Shareholders of the Applicant Companies - HELD THAT - It appears that the present application has complied with under section 230-232 of the companies Act, 2013 and rules framed thereunder. Various directions regarding dispensation/convening of the meetings of the Unsecured Creditors, Secured Creditors and Equity Shareholders of the Applicant Companies is issued - various directions regarding issuance of various notices issued - application allowed.

Summary

Issues:
Dispensation/convening of meetings for Scheme of Arrangement under Companies Act, 2013.

Analysis:
The application was filed by two companies seeking dispensation/convening of meetings for the Scheme of Arrangement involving amalgamation. The companies are empowered by their Memorandum of Association to enter into such arrangements. The advantages of amalgamation were outlined, including streamlining organization structure, achieving operational efficiency, and enhancing net worth. Both companies' Boards of Directors approved the proposed Scheme, and necessary financial documents were submitted. No investigations or proceedings were pending against the companies under relevant sections of the Companies Act, 2013. The Competition Act, 2002 was deemed inapplicable to the case.

The details of shareholders and creditors were provided, with all equity shareholders and secured creditors consenting to the proposed scheme. Meetings of Equity Shareholders and Secured Creditors were dispensed with due to unanimous consent. However, due to several unsecured creditors, meetings were ordered to be convened for both companies. The meetings were to be conducted physically and through video conferencing or other permitted means. Advertisements and notices were required to be published and sent to creditors as per legal provisions.

Independent Practicing Chartered Accountants were appointed as Chairman and Scrutinizer for the meetings. The Chairman was granted powers under the respective Articles of Association for conducting the meetings. Voting through Proxy was not permitted in case of video conference meetings, but through Authorized Representative. The quorum and procedures for the meetings were specified, and compliance with rules and regulations was emphasized.

The Chairman was directed to report to the Tribunal on the meeting results and file necessary affidavits. Notices were to be sent to relevant authorities, and representations were to be made within the specified period. The companies were instructed to file an affidavit confirming compliance with notice issuance directions. The Tribunal disposed of the Company Application with the provided directions.