2016 (4) TMI 1276 - HC - Companies Law

Dispensation granted for Scheme of Arrangement, no shareholder meetings needed.

The court granted dispensation from convening meetings of Equity Shareholders and Unsecured Creditors in a Scheme of Arrangement for Amalgamation and ... Scheme of Arrangement in the nature of Amalgamation - Held that:- As submitted that all the Equity Shareholders and Unsecured Creditors of the Applicant Company as on date have approved the Scheme in the form of written consent letters. All these consent letters are annexed with the Application as Exhibit‘ D’ and ‘E’ respectively. There are no Secured Creditors of the Applicant Company. The certificates confirming the status of the Shareholders and Creditors as well as the receipt of the consent letters from all the Shareholders and Unsecured Creditors are annexed collectively as Exhibit‘ F’. In view of the same, dispensation is sought from convening the meetings of the Equity Shareholders and Unsecured Creditors of the Applicant Company and considering the facts, circumstances and the submissions advanced, the same is hereby granted. Issues:1. Scheme of Arrangement for Amalgamation and Share Capital Restructure under Companies Act, 1956.2. Dispensation of meeting of Equity Shareholders and Unsecured Creditors.Analysis:1. The judgment pertains to a Scheme of Arrangement involving the Amalgamation of a company with another and the Restructure of Share Capital, as per Sections 391 to 394 read with Sections 100 to 103 of the Companies Act, 1956. The application for this Scheme is filed by the Transferor Company, seeking dispensation of the meeting of Equity Shareholders and Unsecured Creditors. The Applicant Company has obtained written consent letters from all Equity Shareholders and Unsecured Creditors, which are annexed with the application. It is highlighted that there are no Secured Creditors of the Applicant Company. The certificates confirming the status of Shareholders and Creditors, along with the consent letters, are collectively annexed. Based on the submissions and the fact that all concerned parties have approved the Scheme, the court grants dispensation from convening the meetings of Equity Shareholders and Unsecured Creditors.2. The judgment concludes by disposing of the application after considering the submissions made by the Applicant Company's advocate. The court's decision to grant dispensation from holding meetings of Equity Shareholders and Unsecured Creditors is based on the approval received from all relevant parties and the absence of Secured Creditors in the case. The detailed documentation provided, including consent letters and certificates, supports the decision to approve the Scheme without the need for physical meetings, ensuring compliance with the legal requirements under the Companies Act, 1956.