NOTICE FOR THE MEETING OF CREDITORS UNDER IN A COMPROMISE OR ARRANGEMENT

Notice of meeting

The National Company Law Tribunal (‘Tribunal’ for short) shall order for the conduct of meeting of any class of creditors or classes of creditors or members to be convened.  On receipt of the said order a notice, in the Form CAA – 2 shall be issued to each individual creditor or member at the address registered with the company.  The notice shall be sent by the Chairperson appointed for the meeting, or, if the Tribunal so directs, by the company (or its liquidator), or any other person as the Tribunal may direct.  The notice shall be sent to the creditors or members by registered post or speed post or by courier or by e-mail or by hand delivery or any other mode as directed by the Tribunal to their last known address at least one month before the date fixed for the meeting.  The service of notice of meeting shall be deemed to have been effected in case of delivery by post, at the expiration of 48 hours after the letter containing the same is posted. 

Contents of the notice

The notice of the meeting to the creditors and members shall be accompanied by a copy of the scheme of compromise or arrangement.  A statement disclosing the following details, if the same are not already included in the said scheme shall also be accompanied-

• Details of the order, date, time and venue of the meeting;
• Details of company including-

• Corporate Identification Number (CIN) or Global Location Number (GLN) of the company;
• Permanent Account Number;
• Name of the company;
• Dated of incorporation;
• Type of company [Public/Private/OPC];
• Registered office address of email address of the company;
• Main objects of the company and business of the company;
• details of change or name, registered office and objects of the company during the last 5 years;
• name or the stock exchange (s) where securities of the company are listed, if any;
• capital structure of the company;
• Details of promoters and directors.

• If the scheme relates to more than one company the details of any relationship subsisting between such companies who are parties to such scheme of compromise or arrangement, including holding, subsidiary or of associate companies;
• The date of the board meeting at which the scheme was approved by the board of directors including the name of the directors who voted in favor of the resolution, who voted against the resolution and who did not vote or participate on such resolution;
• Explanatory statement disclosing details of the scheme of compromise or arrangement including: -

• parties involved in such scheme;
• in case of amalgamation or merger, appointed date, effective date, share exchange ratio (if applicable) and other considerations, if any;
• details of valuation report, if required;
• details of capital or debt restructuring, if any;  
• rationale for the compromise or arrangement;
•  benefits of the compromise or arrangement as perceived by the Board of directors to the company, members, creditors and others (as applicable);
• amount due to unsecured creditors;

• Disclosure about the effect of scheme on key managerial personnel; directors; promoters, other members, depositors, creditors, debenture holders, deposit trustee and debenture trustee and employees of the company;
• Disclosure about effect of scheme on material interests of directors, Key Managerial Personnel (KMP) and debenture trustee;
• Investigation or proceedings, if any, pending against the company under the Act.
• Details of the availability of the following documents for members or creditors-

• latest audited financial statements including consolidated financial statement;
• copy of the order of Tribunal, if the Tribunal orders for the dispensation of such meeting;
• Copy of the scheme;

• Contracts and agreements material to the scheme;
• The certificate issued by Auditor of the Company to the effect that the accounting treatment, if any, proposed in the scheme of compromise or arrangement is in conformity with the Accounting Standards prescribed under Section 133 of the Companies Act, 2013;
• Details of approvals, sanctions or no-objection(s), if any, from regulatory or any other governmental authorities required, received or pending for the proposed scheme of compromise or arrangement;
• A statement to the effect that the persons to whom the notice is sent may vote in the meeting either in person or by proxies, or where applicable, by voting through electronic means.

The notice shall provide that the persons to whom the notice is sent may vote in the meeting either themselves or through proxies or by postal ballot to the adoption of the compromise or arrangement within one month from the date of receipt of such notice:

Advertisement

The notice of the meeting shall be advertised in Form CAA – 2in at least one English newspaper and in at least one vernacular newspaper having wide circulation in the State in which the registered office of the company is situated, or such newspapers as may be directed by the Tribunal.   The said notice shall be uploaded on the website of company not less than 30 days before the date fixed for the meeting.  If the company is a listed company, then the notice shall also be uploaded on the website of SEBI and stock exchanges.  If separate meetings of classes of creditors or members are to be held, a joint advertisement for such meetings may be given.

Notice to statutory authorities

The notice of meeting in Form CAA – 3, accompanying the copy of the scheme and the explanatory statement, shall be sent –

• Central Government, the Registrar of Companies, Income Tax Department in all cases;
• The Reserve Bank of India, Securities and Exchange Board of India, the Competition Commission of India and the Stock Exchange of India, as may be applicable;
• Other sectoral regulators or authorities, as required by Tribunal.

This notice shall be sent to the authorities concerned, after the notice is sent to all creditors and members of the company.  The said notice shall be sent by registered post or by speed post or by courier or by hand delivery at the office of the authority.

Objections by the Authorities

If the above said authorities are having objections in the scheme the same shall be sent to the Tribunal within a period of 30 days from the date of receipt of the said notice.  The copy of such representation forwarded to the Tribunal shall be sent to the company.  If no representation is received from the authorities concerned it will be presumed that the authorities have no representation to make on the proposed scheme of compromise or arrangement.

Objections by members

Any objection to the compromise or arrangement shall be made only by persons holding not less than 10% of the shareholding or having outstanding debt amounting to not less than 5% of the total outstanding debt as per the latest audited financial statement.