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2021 (7) TMI 407 - Tri - Companies LawScheme of Arrangement in the nature of Demerger - seeking dispensation of the meeting of the Equity Shareholders of Applicant Resulting Company/Applicant Transferee Company - seeking directions for convening and holding of various meetings - Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 - HELD THAT - The meetings of the Equity Shareholders of Applicant Resulting/Transferee Company is hereby dispensed with. Since there are NIL Secured and Unsecured Creditors in Applicant Resulting/Transferee Company, question for convening of meetings of Secured and Unsecured Creditors in Applicant Resulting/Transferee Company does not arise. Various directions regarding holding and convening of various meetings issued - directions regarding issuance of various notices issued - application allowed.
Issues:
Application for dispensation of shareholder meeting and directions for convening meetings of creditors for a demerger scheme under Companies Act, 2013. Analysis: The Applicant Companies sought dispensation of the Equity Shareholders meeting for the Demerged and Transferee Companies under Sections 230 to 232 of the Companies Act, 2013, for a demerger scheme. The purpose was to merge the Fabrics Undertaking of the Demerged Company into the Resulting Company, focusing on operational efficiency and business realignment. The Board of Directors of both companies approved the scheme, ensuring compliance with Accounting Standards. The Tribunal noted the absence of investigations or proceedings under the Companies Act, 1956/2013 related to the Applicant Companies. It was also confirmed that no notice to the RBI was required due to the absence of foreign shareholders. The Demerged Company had Equity Shareholders, Secured Creditors, and Unsecured Creditors, while the Resulting/Transferee Company had only Equity Shareholders, with no Creditors. The Tribunal, after hearing the Advocate for the Applicant Companies, dispensed with the Equity Shareholders meeting for the Resulting/Transferee Company due to their consent affidavits approving the demerger scheme. As there were no Secured and Unsecured Creditors in the Resulting/Transferee Company, the question of convening their meetings did not arise. The Tribunal allowed the joint application with specific directions for convening and holding meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors of the Demerged Company. The order directed the Applicant Demerged Company to hold separate meetings for Equity Shareholders, Secured Creditors, and Unsecured Creditors on specified dates. Detailed instructions were given for advertising the meetings, sending notices to concerned parties, appointing a Chairman and Scrutinizer, and ensuring compliance with quorum requirements. The Chairperson was mandated to file necessary affidavits and report the meeting results to the Tribunal within specific timelines. Additionally, compliance with Section 230 and Rule 8 of the Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016 was emphasized. In conclusion, the Tribunal allowed the application, providing comprehensive directions for conducting meetings of various stakeholders in accordance with the Companies Act, 2013, and related rules.
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