Dispensing with shareholders' and creditors' meetings in amalgamation is permitted where the court finds them unnecessary.

Where the court is satisfied on the material placed in an amalgamation proceeding that convening meetings would serve no useful purpose, it may dispense with meetings of the equity shareholders and unsecured creditors of the transferee company under the Companies Act, 1956 and the Companies (Court) Rules, 1956. On the record and additional affidavit, the High Court treated the case as fit for such exemption and granted the procedural dispensation. The order preserved the right of shareholders and creditors to raise objections when the scheme later came up for sanction, and the application for directions was accordingly allowed and disposed of.

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Issues: Whether the meeting of the equity shareholders and unsecured creditors of the applicant-transferee company could be dispensed with in proceedings for amalgamation.

Analysis: The application was made under sections 391(1) and 393 of the Companies Act, 1956 read with rule 9 of the Companies (Court) Rules, 1956. On consideration of the record and the additional affidavit, the Court found the case fit for dispensing with the meetings of the equity shareholders and unsecured creditors of the transferee company. The order also kept open the right of the shareholders and creditors to raise objections when the scheme came up for sanction.

Conclusion: The meetings of the equity shareholders and unsecured creditors were dispensed with in favour of the applicant.

Final Conclusion: The application for procedural directions in the amalgamation matter was allowed and stood disposed of after granting the requested exemption from convening the meetings.

Ratio Decidendi: Where the Court is satisfied on the material before it that convening meetings would serve no useful purpose in an amalgamation proceeding, it may dispense with such meetings under the Companies Act and the Companies (Court) Rules.

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