Delhi HC Allows Dispensation of Shareholder Meetings in Amalgamation Scheme

The Delhi High Court granted the application under Section 391 of the Companies Act, 1956, allowing the dispensation of shareholder and creditor meetings for a Scheme of Amalgamation involving multiple transferor companies merging with a transferee company. The court approved the Scheme as all companies' Boards of Directors had unanimously endorsed it, and consents were obtained from equity shareholders and creditors. The judgment highlighted the cancellation of equity capital of transferor companies upon sanction of the Scheme and approved the application, dispensing with meetings for certain companies involved in the Amalgamation.

---

---

Issues:
Application under Section 391 of the Companies Act, 1956 seeking dispensation of shareholder and creditor meetings for Scheme of Amalgamation.

Analysis:
The judgment involves a joint application under Section 391 of the Companies Act, 1956 by multiple applicant companies to dispense with the requirement of convening meetings of their equity shareholders and secured/unsecured creditors to consider and approve a proposed Scheme of Amalgamation. The applicant companies sought directions from the court for the Scheme involving multiple transferor companies merging with a transferee company. The registered offices of all companies were within the jurisdiction of the Delhi High Court. Each transferor company was incorporated under the Companies Act, 1956 on different dates, with details of their authorized share capital and issued capital provided in the judgment.

The judgment detailed the consents and no objections received from equity shareholders and creditors of each transferor and transferee company regarding the proposed Scheme of Amalgamation. It highlighted that the Boards of Directors of all companies had unanimously approved the Scheme, and no pending proceedings under relevant sections of the Companies Act, 1956 existed against the applicant companies. The judgment emphasized that the share exchange ratio in the Scheme would result in the cancellation of equity capital of transferor companies upon sanction of the Scheme.

Furthermore, the judgment outlined the consents received from equity shareholders and creditors of each company, confirming their approval of the Scheme and the dispensation of meetings for certain companies based on these consents. The judgment noted the absence of secured creditors for some transferor companies and the transferee company. It concluded by allowing the application in the terms mentioned, indicating the dispensation of meetings for the concerned companies and the approval of the Scheme of Amalgamation.

---