Amalgamation scheme meetings may be dispensed with when shareholder and creditor consents are verified and no secured creditors exist.

A scheme of amalgamation under Sections 391 to 394 of the Companies Act, 1956 may proceed without convening meetings where the companies have jurisdictional nexus, their boards have unanimously approved the scheme, and verified written consents or no-objections are on record from the relevant equity shareholders, preference shareholders and unsecured creditors. Where no secured creditors exist and no proceedings under Sections 235 to 251 are pending, the court may dispense with the meetings of those stakeholder classes. On those facts, the convening requirement was dispensed with and the application was allowed.

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Issues: Whether the requirement of convening meetings of the equity shareholders, preference shareholders, secured creditors and unsecured creditors of the applicant companies for approval of the proposed Scheme of Amalgamation should be dispensed with.

Analysis: The application was moved under Sections 391 to 394 of the Companies Act, 1956. The registered offices of both companies were within the jurisdiction of the Court, the Boards of Directors had unanimously approved the scheme, and the relevant shareholding and creditor positions were placed on record. The equity shareholders, preference shareholders and unsecured creditor of each company had furnished written consents or no objections, which were verified and found to be in order. There were no secured creditors of either company on the relevant date, and no proceedings under Sections 235 to 251 of the Companies Act, 1956 were pending against the companies.

Conclusion: The requirement of convening the meetings of the equity shareholders, preference shareholders and unsecured creditors of both companies was dispensed with, and the application was allowed.

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