Dispensing with amalgamation meetings approved where verified consents from shareholders and creditors meet the requisite majority

Written consents or no-objections from all or the requisite majority of equity shareholders and creditors can justify dispensing with meetings for a proposed amalgamation scheme, provided the consents are verified and in order. Here, the transferor company's shareholders unanimously consented and there were no secured or unsecured creditors, while the transferee company's equity shareholders, sole secured creditor, and requisite majority of unsecured creditors also filed valid consents. As the boards of both companies had already unanimously approved the scheme, the HC dispensed with convening the meetings and allowed the amalgamation process to proceed without them.

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Issues: Whether the meetings of the equity shareholders, secured creditors and unsecured creditors of the applicant companies should be dispensed with for consideration of the proposed scheme of amalgamation.

Analysis: The application was moved under Sections 391(1) and 394 of the Companies Act, 1956 read with Rule 9 of the Companies (Court) Rules, 1959. The transferor company had four equity shareholders, all of whom filed written consents or no-objections to the scheme, and there were no secured or unsecured creditors. The transferee company had three equity shareholders, one secured creditor and sixty-five unsecured creditors. All equity shareholders, the sole secured creditor and twenty-six unsecured creditors, representing the requisite majority in number and value, filed written consents or no-objections. The consents were verified and found to be in order, and the Board of Directors of both companies had already approved the scheme unanimously.

Conclusion: The requirement of convening meetings of the equity shareholders, secured creditors and unsecured creditors of the applicant companies was dispensed with.

Final Conclusion: The application for directions in aid of the proposed amalgamation was granted and the scheme was permitted to proceed without convening the stated meetings.

Ratio Decidendi: Where all or the requisite majority of shareholders and creditors of the concerned companies have given written consents or no-objections and the consents are found to be in order, the court may dispense with convening meetings for consideration of the proposed amalgamation scheme.

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