Court approves Amalgamation Scheme under Companies Act, 1956

The Court approved the Scheme of Amalgamation and Arrangement under Sections 391 to 394 of the Companies Act, 1956, dispensing with meetings of Shareholders and Secured Creditors of the Transferor/Petitioner Company. A meeting of Un-Secured Creditors was ordered, with appointed individuals overseeing the process. The meeting's results must be reported to the Court within seven days, following proper legal procedures for notification and voting requirements. Approval of the scheme by Unsecured Creditors necessitates a minimum of 75% in value of those present and voting.

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Issues:
Company petition under Sections 391 to 394 read with Sections 100-103 of the Companies Act, 1956 and Rule 9 of the Companies (Court) Rules, 1959 for sanctioning the Scheme of Amalgamation and Arrangement, dispensation of meetings of Shareholders and Secured Creditors, and holding a meeting of Un-Secured Creditors.

Analysis:
The Company Petition filed under Sections 391 to 394 read with Sections 100-103 of the Companies Act, 1956 and Rule 9 of the Companies (Court) Rules, 1959 seeks the sanctioning of the Scheme of Amalgamation and Arrangement on behalf of the Transferor/Petitioner Company. The petition is supported by an affidavit and requests the dispensation of meetings of Shareholders and Secured Creditors of the Transferor/Petitioner Company while seeking the holding of a meeting of Un-Secured Creditors of the company. The registered offices of the Transferor/Petitioner Company and the Transferee Company are located in Haryana and West Bengal, respectively.

The Scheme of Amalgamation and Arrangement has been approved by the Board of Directors of both the Transferor and Transferee Companies in meetings held on 11.02.2015. The petition mentions the existence of two Equity Shareholders of the Transferor/Petitioner Company who have given their consent to the Scheme, as evidenced by their 'No Objection Certificates' appended to the petition. A Certificate by a Chartered Accountant confirms the absence of Secured Creditors for the Transferor/Petitioner Company.

The petition states the presence of 271 Un-Secured Creditors of the Transferor/Petitioner Company, and a list has been prepared from the company's books of accounts as of 31.12.2014. The Court, considering the consents of Equity Shareholders and the absence of Secured Creditors, dispenses with the meeting of Equity Shareholders. However, it orders the convening of a meeting for Un-Secured Creditors on a specified date and venue, appointing individuals as Chairman and Co-Chairman for the meeting.

The appointed Chairman and Co-Chairman are directed to report the meeting's results to the Court within seven days of its conclusion, with the report to be verified by affidavit. The meeting is to be conducted in compliance with the law, with due notice to all concerned parties through newspapers and the Official Gazette of the Government of Haryana. The notice of the meeting must be published at least 21 days before the proposed meeting date, with individual notices sent to Unsecured Creditors via registered/speed post. Approval/decision on the scheme in the meeting of Unsecured Creditors requires a minimum of 75% in value of the Unsecured Creditors present and voting either in person or through proxy.

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