Unanimous Stakeholder Approval Facilitates Dispensation of Meetings in Amalgamation Schemes

The court disposed of the application for the Scheme of Amalgamation under Section 391(2) of the Companies Act, 1956, as the proposed scheme between two companies under the same management group received unanimous approval from equity shareholders, creditors, and directors. Due to the requisite consents obtained, the court dispensed with the need for meetings of equity shareholders and creditors. The judgment underscores the importance of securing unanimous consent from stakeholders in amalgamation schemes, facilitating the dispensation of mandatory meetings as mandated by law.

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Issues involved: Application for Scheme of Amalgamation u/s 391(2) of the Companies Act, 1956.

Details of the Judgment:

Issue 1: Approval for the Scheme of Amalgamation
The present applicant, M.S. Khurana Infrastructure and Toll Road Private Limited, seeks to enter into a Scheme of Amalgamation with M.S. Khurana Engineering Limited. Both companies are under the same management group, and the Board of Directors of both companies have approved the proposed scheme. All equity shareholders, including the Holding Company and its nominee, have given written consent for the scheme. Additionally, the sole secured creditor and all unsecured creditors of the Transferor company have also approved the scheme in writing. Certificates from a Chartered Accountant confirm the status of shareholders and creditors, along with the receipt of consent letters from all concerned parties.

Issue 2: Dispensation of Meetings
Due to the unanimous approval received from equity shareholders and creditors, as required under Section 391(2) of the Companies Act, 1956, the court rules that the meetings of equity shareholders and creditors of the applicant company are not necessary and are hereby dispensed with.

Conclusion
The application for the Scheme of Amalgamation is disposed of by the court.

This judgment highlights the importance of obtaining necessary approvals and consents for a Scheme of Amalgamation under the Companies Act, 1956. It emphasizes the significance of unanimous consent from shareholders and creditors in such arrangements, leading to the dispensation of mandatory meetings as per the legal provisions.

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