2015 (12) TMI 1724 - HC - Companies Law

Court omits physical meeting of secured creditors in Company Application due to unanimous written consent for Scheme of Arrangement.

The Court disposed of the application seeking review and modification of directions regarding the meeting of Secured Creditors in Company Application ... Review and modification of court order - Omission of directions to convene meeting - Dispensing with meeting of secured creditors on written consent - Validity of written consent of secured creditors to a Scheme of ArrangementDispensing with meeting of secured creditors on written consent - Omission of directions to convene meeting - Directions in the earlier order to convene and hold the meeting of the secured creditors are omitted and the meeting is dispensed with because all secured creditors have given their written consent to the Scheme of Arrangement. - HELD THAT: - The Court examined the application for review and modification of its oral order directing convening of creditors' meetings and noted that, although the unsecured creditors' meeting was convened, the secured creditors did not attend because they had each given written consent approving the Scheme of Arrangement. The applicant produced the consent letters and a certificate from a chartered accountant confirming that both secured creditors had given written consent and waived the right to call the meeting. On these facts the Court found the requirement to hold the secured creditors' meeting redundant and directed that the relevant directions in the earlier order be omitted and the meeting dispensed with. [Paras 2, 3]Order dated 27.10.2015 is modified by omitting the directions to convene the secured creditors' meeting and the meeting is dispensed with in view of their written consent to the Scheme.Final Conclusion: The review application is allowed to the limited extent of deleting the directions to hold the meeting of secured creditors; since all secured creditors have given written consent to the Scheme of Arrangement, the meeting is dispensed with and the application is disposed of. Issues: Review and modification of directions pertaining to the meeting of Secured Creditors in Company Application No.319 of 2015.Analysis:1. The applicant sought a review and modification of the oral order dated 27.10.2015 passed by the Court in Company Application No.319 of 2015 regarding the meeting of Secured Creditors.2. The applicant's advocate highlighted that the initial application requested direction to convene meetings of both secured and unsecured creditors. The Court had directed the applicant company to hold these meetings on 10.12.2015. While the meeting of unsecured creditors took place as scheduled, the secured creditors provided written consent approving the Scheme of Arrangement instead of attending the meeting. A certificate from a Chartered Accountant confirmed this consent.3. After hearing the applicant's counsel and reviewing the previous order, the Court noted that the meeting of secured creditors did not occur as they all consented in writing to the Scheme of Arrangement. Consequently, the Court decided to omit the directions related to holding the meeting of secured creditors and dispensed with the need for such a meeting due to all secured creditors providing written consent for the Scheme.4. Based on the above considerations, the Court disposed of the present application, thereby resolving the issue of review and modification of directions concerning the meeting of Secured Creditors in Company Application No.319 of 2015.