2021 (9) TMI 487 - Tri - Companies Law

Sanction of scheme of arrangement - section 230 to 232 of the Companies Act, 2013 - HELD THAT - Various directions with regard to holding, convening and dispensation with various meetings issued - directions with regard to issuance of various notices issued. The scheme is approved - application allowed.

Issues Involved:
1. Approval of the Scheme of Merger by Absorption under Sections 230 to 232 of the Companies Act, 2013.
2. Dispensation of meetings for Equity Shareholders and Unsecured Creditors.
3. Notification and compliance with regulatory authorities.

Detailed Analysis:

1. Approval of the Scheme of Merger by Absorption:

- The Tribunal convened via Video Conference on 05.08.2021 to hear the application concerning the Scheme of Merger by Absorption involving seven Transferor Companies and one Transferee Company.
- The Transferor Companies, under the jurisdiction of the Mumbai Bench, are merging with the Transferee Company, which falls under the jurisdiction of the Chennai Bench.
- The Scheme was approved by the Board of Directors of the Applicant Companies on 15th March 2021, with the appointed date being 1st April 2020.
- The rationale for the Scheme includes achieving operational and management efficiency, reducing regulatory and legal compliance obligations, and optimizing the group structure.

2. Dispensation of Meetings for Equity Shareholders and Unsecured Creditors:

- The Applicant Companies have two Equity Shareholders each, who have provided written consent to the proposed Scheme. Consequently, the meetings of the Equity Shareholders are dispensed with.
- The Applicant Companies do not have any Secured Creditors, eliminating the need for convening and holding meetings for them.
- The First Applicant Company has one Unsecured Creditor, the Transferee Company, which has given its consent, thus dispensing with the meeting of Unsecured Creditors.
- The Second Applicant Company has two Unsecured Creditors, with the Transferee Company constituting 99.67% of the total outstanding amount, consenting to the Scheme, thereby dispensing with the meeting.
- The Third and Sixth Applicant Companies have no Unsecured Creditors, as certified by their Statutory Auditors.
- The Fourth Applicant Company has seven Unsecured Creditors, with one creditor constituting 98.37% of the total outstanding amount consenting to the Scheme, thus dispensing with the meeting.
- The Fifth Applicant Company has three Unsecured Creditors, with the Transferee Company constituting 98.88% of the total outstanding amount consenting to the Scheme, thereby dispensing with the meeting.
- The Seventh Applicant Company has four Unsecured Creditors, with the Transferee Company constituting 99.89% of the total outstanding amount consenting to the Scheme, thus dispensing with the meeting.

3. Notification and Compliance with Regulatory Authorities:

- The Transferor Companies are directed to serve notice of the application to the Central Government, Registrar of Companies, Official Liquidator, and relevant Income Tax Authorities.
- If no response is received from these authorities within 30 days, it will be presumed they have no objection to the proposed Scheme.
- M/s. G.D. Bangard and Co., Chartered Accountants, are appointed to assist the Official Liquidator in scrutinizing the books of accounts of the Transferor Companies for the last five years, with a fee fixed at ?2,00,000/- plus applicable taxes.
- The Applicant Companies are required to host the notices on their respective websites and file a joint Affidavit of Service proving dispatch of notices to creditors and regulatory authorities.

Conclusion:

The Tribunal approved the Scheme of Merger by Absorption, dispensing with the meetings of Equity Shareholders and Unsecured Creditors due to their consents. The Transferor Companies are directed to notify and comply with the regulatory authorities, with the assistance of appointed Chartered Accountants for scrutinizing the books of accounts. The Applicant Companies are to report compliance with these directions.

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