Approval of Amalgamation Scheme without Meetings for Shareholders and Creditors

The Tribunal dispensed with the requirement of convening meetings for equity shareholders, secured creditors, and unsecured creditors of the Transferor Companies as all necessary consents were obtained. Meetings for equity shareholders and unsecured creditors of the Transferee Company were also dispensed with, except for secured creditors, for whom a meeting was ordered to consider and approve the Scheme of Amalgamation. The Tribunal confirmed its territorial jurisdiction and approved the Scheme of Amalgamation, ensuring procedural compliance and safeguarding stakeholders' interests.

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Issues Involved:

1. Dispensation of meetings for equity shareholders, secured creditors, and unsecured creditors of Transferor Companies.
2. Dispensation of meetings for equity shareholders and unsecured creditors of the Transferee Company.
3. Requirement of meeting for secured creditors of the Transferee Company.
4. Territorial jurisdiction of the Tribunal.
5. Approval and procedural compliance of the Scheme of Amalgamation.

Issue-wise Detailed Analysis:

1. Dispensation of Meetings for Equity Shareholders, Secured Creditors, and Unsecured Creditors of Transferor Companies:

The applicant companies, Four Seasons Restaurant Private Limited (Transferor Company No. 1) and Four Seasons Trails Private Limited (Transferor Company No. 2), sought directions to dispense with the requirement of convening meetings of their equity shareholders, secured creditors, and unsecured creditors. The Tribunal noted that all equity shareholders of both Transferor Companies had given their consent via affidavits, which were placed on record. Additionally, it was represented that there were no secured or unsecured creditors in both Transferor Companies. Therefore, the necessity of convening and holding meetings for equity shareholders, secured creditors, and unsecured creditors of the Transferor Companies was dispensed with.

2. Dispensation of Meetings for Equity Shareholders and Unsecured Creditors of the Transferee Company:

The Transferee Company, Pinky Forex Tours and Travels Private Limited, also sought directions to dispense with the requirement of convening meetings of its equity shareholders and unsecured creditors. The Tribunal noted that all equity shareholders of the Transferee Company had given their consent via affidavits, which were placed on record. Regarding unsecured creditors, it was represented that there were three unsecured creditors, holding 79.26% in value terms, who had given their consent via affidavits. The remaining 20.74% in value terms comprised bonus payable to employees, which the Transferee Company undertook to pay after the approval of the Scheme. Therefore, the necessity of convening and holding a meeting of equity shareholders and unsecured creditors of the Transferee Company was dispensed with.

3. Requirement of Meeting for Secured Creditors of the Transferee Company:

The Tribunal noted that the Transferee Company had three secured creditors whose consent had not been placed on record. Consequently, the Tribunal directed that a meeting of the secured creditors of the Transferee Company be held to consider and approve the Scheme of Amalgamation. The meeting was scheduled for 10:00 A.M. on 03.02.2020 at the registered office of the Transferee Company. The quorum for the meeting was set at 25% in both value terms and number-wise. Provisions were made for adjournment and proxy voting in case of insufficient quorum. The Tribunal appointed a Chairperson and a Scrutinizer for the meeting and specified the honorarium for both.

4. Territorial Jurisdiction of the Tribunal:

The learned counsel for the Applicant Companies submitted that the registered offices of all the applicant companies were situated within the territorial jurisdiction of the Jaipur Bench of the Tribunal and fell within the purview of the Registrar of Companies, Jaipur. The Tribunal confirmed its territorial jurisdiction to entertain the joint application based on this representation.

5. Approval and Procedural Compliance of the Scheme of Amalgamation:

The Tribunal perused the joint application and connected documents, including the Scheme of Arrangement by way of Amalgamation. The Scheme was unanimously approved by the Board of Directors of the Transferor and Transferee Companies in their respective meetings held on 14.09.2019. The appointed date for the Scheme was stated to be 01.04.2019. The Tribunal reviewed the details of the capital structure, Memorandum and Articles of Association, and the absence of any pending investigation proceedings against the applicant companies. The Tribunal issued comprehensive directions for the conduct of the meeting of secured creditors of the Transferee Company, including the issuance of individual notices, publication of advertisements, and compliance with applicable laws and rules.

The application was allowed on the aforesaid terms, ensuring thorough procedural compliance and safeguarding the interests of all stakeholders involved.

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