2022 (5) TMI 534 - Tri - Companies Law

Sanction of Scheme of Arrangement - section 230-232 of Companies Act - HELD THAT - Various directions with regard to holding, convening and dispensing with various meetings issued - directions with regard to issuance of SCN also issued The scheme is approved - application allowed.

Summary

Issues:
1. Scheme of Arrangement between two companies and their shareholders.
2. Approval of the proposed Scheme by the Board of Directors.
3. Details of the Applicant Companies' business activities.
4. Share capital structure of the Applicant Companies.
5. Rationale for the Scheme of Arrangement.
6. Allotment of shares to equity shareholders post-Demerger.
7. Consent of Equity Shareholders for the proposed Scheme.
8. Rights of Secured Creditors and Unsecured Creditors.
9. Notice requirements to regulatory authorities and creditors.

Analysis:
1. The judgment pertains to a Scheme of Arrangement between two companies, S.H. Pitkar Orthotools Private Limited (Demerged Company) and Precima Technologies Private Limited (Resulting Company), along with their respective shareholders. The Scheme aims to separate the DIMF Business Division from the Surgical and Orthotools Division to meet investor objectives and manage distinct business risks effectively.

2. The Board of Directors of the Applicant Companies approved the proposed Scheme with an Appointed Date of April 1, 2021. The rationale behind the Scheme includes the growth trajectory of S.H. Pitkar Orthotools Private Limited (SHPOPL) seeking investor participation specifically for the Surgical and Orthotools Business, leading to the separation of the DIMF Business Division.

3. The Applicant Companies' business activities include manufacturing and selling surgical instruments, tools, laboratory appliances, medical appliances, orthopaedic & dental implants, and other related healthcare equipment. The share capital structure of the companies is detailed, with the Authorized, Issued, Subscribed, and Paid-up Share Capital provided for both companies.

4. Post-Demerger, the Resulting Company will issue shares to the shareholders of SHPOPL on a proportionate basis. The judgment outlines the specific share allotment ratio for the equity shareholders, ensuring a fair distribution of shares in Precima Technologies Private Limited (PTPL).

5. The judgment emphasizes the importance of obtaining consent from all Equity Shareholders of the Applicant Companies for the proposed Scheme. The consent affidavits provided by the shareholders dispense with the need for shareholder meetings to approve the Scheme with or without modifications.

6. Regarding the rights of Secured and Unsecured Creditors, the judgment clarifies that the proposed Scheme will not affect their rights post-arrangement. Specific details about the Secured and Unsecured Creditors, along with the procedure for notifying and addressing their representations, are outlined to ensure compliance with legal requirements.

7. The judgment also highlights the notice requirements to regulatory authorities and creditors, directing the Applicant Companies to serve notices upon relevant government bodies and file Affidavits of Service with the Tribunal to demonstrate compliance with the notification process as mandated by the Companies Act, 2013 and related rules.