2021 (8) TMI 1154 - Tri - Companies Law

Sanction of scheme of amalgamation - seeking to dispense with the requirement of holding the meeting of the equity shareholders, preference shareholders and creditors of the Transferor Company and Transferee Company - Section 232 read with Section 230 of the Companies Act, 2013 and read with Rule 3 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and other applicable provisions of the Companies Act, 2013 - HELD THAT - This is the first stage Application seeking dispensation of convening meetings of Equity Shareholders, preference shareholders and Creditors of the Applicant Companies. All of them have given their consent in the form of Affidavits. The proposed scheme in question prima facie satisfy fundamental requirements for its sanction, subject to approval of this Tribunal - The Applicant Companies stated to be following all provisions of Companies Act, 2013, and rules made thereunder. In any case, dispensing with meeting in question would not deprive any aggrieved party to approach this Tribunal at any point of time, when the approval of scheme in question finally come for consideration. The Company application deserves to be allowed - The scheme is sanctioned.

Issues:
Application for dispensation of shareholder and creditor meetings under Section 232 read with Section 230 of the Companies Act, 2013 for amalgamation of two companies.

Detailed Analysis:

1. Background and Application Details:
The joint application filed by Transferor Company and Transferee Company seeks to amalgamate under Sections 232 and 230 of the Companies Act, 2013. The application aims to dispense with the requirement of holding meetings for equity shareholders, preference shareholders, and creditors of both companies.

2. Company Profiles and Share Capital:
The Transferor Company, JBR Interio Technologies Private Limited, and the Transferee Company, RBJ Technologies Private Limited, are private limited companies engaged in designing and decoration businesses. Details of their incorporation, registered offices, main objects, and share capital structures are provided in the application.

3. Board Resolutions and Rationale for Amalgamation:
The Board of Directors of both companies have resolved to amalgamate the Transferor Company into the Transferee Company for various benefits, including greater integration, technological advancement, improved cash management, organizational capability, and operational efficiency.

4. Shareholders' Consent:
The Transferor Company is a wholly owned subsidiary of the Transferee Company. Shareholder details, consent affidavits, and no objection statements are provided for both companies, ensuring compliance with the proposed Scheme of Amalgamation.

5. Creditors' Consent:
Details of secured and unsecured creditors of both companies are outlined, along with consent affidavits from unsecured creditors stating no objection to the proposed amalgamation scheme. The application demonstrates compliance with creditor requirements.

6. Compliance with Accounting Standards:
The proposed accounting treatment in the Scheme of Amalgamation aligns with the accounting standards prescribed under Section 133 of the Companies Act, 2013. A certificate confirming the accounting treatment is provided by the Statutory Auditor.

7. Scheme Consideration and Tribunal Decision:
The scheme includes the cancellation of shares of the Transferor Company held by the Transferee Company upon the scheme's effect. The Tribunal, after hearing the PCS for the Applicant Companies and reviewing the documents, dispenses with the need for convening meetings of shareholders and creditors. The Tribunal finds the application satisfactory and compliant with the Companies Act, 2013, allowing the application to proceed for further approval.

In conclusion, the judgment approves the application for dispensation of shareholder and creditor meetings, highlighting compliance with legal requirements and setting the stage for the next steps in the amalgamation process under the Companies Act, 2013.

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