High Court of Gujarat allows dispensation for shareholder and creditor meetings in Composite Scheme

The High Court of Gujarat allowed the application, dispensing with the meetings of Equity Shareholders, Preference Shareholders, Secured Creditors, and Unsecured Creditors for considering a Composite Scheme of Arrangement. The Court also granted dispensation of the separate procedure for reduction of capital and the publication of notice in the Official Gazette.

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Issues:
Dispensing with the meetings of Equity Shareholders, Preference Shareholders, Secured Creditors, and Unsecured Creditors for considering a Composite Scheme of Arrangement.

Analysis:

1. Equity Shareholders Meeting:
The Applicant sought dispensation of the Equity Shareholders meeting as 99.95% had consented to the proposed Scheme. The Court, after considering the consent letters and the Chartered Accountant's certificate, dispensed with the meeting.

2. Preference Shareholders Meeting:
Dispensation of the Preference Shareholders meeting was requested as 90.62% had consented to the Scheme. The Court, relying on the consent letters and the Chartered Accountant's certificate, dispensed with this meeting as well.

3. Secured Creditors Meeting:
All Secured Creditors had given their consent to the Scheme, leading the Applicant to seek dispensation of the meeting. The Court, after reviewing the consent letters and the Chartered Accountant's certificate, dispensed with the Secured Creditors meeting.

4. Unsecured Creditors Meeting:
The Applicant argued that the Unsecured Creditors meeting should be dispensed with as their rights and interests would not be affected by the proposed Scheme, and no compromise was offered to them. The Court, considering the submissions and the Chartered Accountant's certificate, dispensed with this meeting.

5. Reduction of Capital and Publication of Notice:
The Applicant requested dispensation of the separate procedure under Sections 100 to 103 of the Companies Act, 1956, as the reduction of capital was part of the Scheme. The Court granted this request and also dispensed with the publication of notice in the Official Gazette.

In conclusion, the High Court of Gujarat allowed the application, dispensing with the meetings of Equity Shareholders, Preference Shareholders, Secured Creditors, and Unsecured Creditors for considering the Composite Scheme of Arrangement, along with the separate procedure for reduction of capital and the publication of notice in the Official Gazette.

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