2022 (1) TMI 219 - Tri - Companies Law

Sanction of Scheme of Arrangement (Demerger) - section 230-232 of Companies Act 2013 and other applicable provisions of the Companies Act 2013 read with Companies (Compromises Arrangements and Amalgamations) Rules 2016 - HELD THAT - Various directions with regard to holding convening and dispensing with various meetings issued - directions with regard to issuance of various notices also issued. The scheme is approved - application allowed.

Summary

Issues:
Application for Scheme of Arrangement (Demerger) under Companies Act, 2013 - Dispensing meetings of Equity Shareholders, Unsecured Creditors, and Secured Creditors - Compliance with Companies Act provisions.

Analysis:
The judgment pertains to an application by two companies, a Transferor Company and a Transferee Company, along with their shareholders and creditors, under sections 230-232 of the Companies Act, 2013, for a Scheme of Arrangement (Demerger). The Applicant Companies sought relief in dispensing with the meetings of Equity Shareholders, Unsecured Creditors, and Secured Creditors. The application included detailed information about the companies, their shareholders, and creditors, along with the proposed Scheme annexed to the application.

The Transferor Company had 15 Equity Shareholders, 1 Secured Creditor, and 219 Unsecured Creditors. All necessary consents and affidavits were obtained and filed with the application to dispense with the meetings. Similarly, the Transferee Company had 2 Equity Shareholders, 1 Secured Creditor, and 15 Unsecured Creditors, with consents obtained from all relevant parties to dispense with the meetings.

The Tribunal examined the application, connected documents, and the Scheme proposed by the Applicant Companies. It verified the incorporation details, capital structure, Memorandum and Articles of Association, Audited Annual Accounts, and resolutions of the Board of Directors approving the Scheme. The Appointed date for the Scheme was specified as 01.04.2020, and the Statutory Auditors certified the Accounting Treatment's conformity with the prescribed standards.

Based on the representations made by the Applicant Companies and the documents filed, the Tribunal issued directions for dispensing with the meetings as follows: for the Transferor Company, meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors were dispensed with due to obtained consents and affidavits. Similarly, for the Transferee Company, meetings of Equity Shareholders, Secured Creditors, and Unsecured Creditors were dispensed with based on the consents obtained. The Application was allowed, and the Applicant Company was directed to file the second motion application within 14 days from the date of the order for further proceedings.