2020 (10) TMI 229 - Tri - Companies Law

Tribunal Orders Meetings for Shareholders & Creditors: Companies Act Compliance Required

Fibcom India Limited Versus Prima Telecom Limited

The Tribunal did not grant dispensation from holding meetings of Equity Shareholders, Preference Shareholders, and Unsecured Creditors based on consents. ... Sanction of Scheme of Amalgamation - Section 230-232 of Companies Act, 2013 and other applicable provisions of the Companies Act, 2013 read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 - HELD THAT:- Directions are issued with respect to calling, convening and holding of the meetings of the shareholders, secured and unsecured creditors or dispensing with the same as well as issue of notices including by way of paper publications - application allowed. Issues Involved:1. Dispensation of meetings of Equity Shareholders, Preference Shareholders, and Unsecured Creditors of Transferor and Transferee Companies.2. Convening of meetings of Secured Creditors of Transferor and Transferee Companies.3. Issuance of notices to regulatory authorities.4. Compliance with statutory provisions under Section 230-232 of the Companies Act, 2013.5. Directions for the conduct of meetings and voting procedures.Detailed Analysis:1. Dispensation of Meetings:The applicants sought dispensation from holding meetings of Equity Shareholders, Preference Shareholders, and Unsecured Creditors based on written consents. The Transferor Company has 7 Equity Shareholders and 1 Preference Shareholder, all of whom have given their consent. Similarly, 92% of the Unsecured Creditors by value have consented. For the Transferee Company, all 9 Equity Shareholders consented. However, the Tribunal noted that under Section 230 of the Companies Act, 2013, there is no provision to dispense with the meetings of shareholders/members unless 90% of creditors consent by affidavit. Therefore, the Tribunal could not dispense with these meetings.2. Convening of Meetings:The Tribunal directed the convening of meetings for Equity Shareholders, Preference Shareholders, and Secured Creditors for both companies. Specific dates, times, and venues were provided:- Transferor Company:- Equity Shareholders: August 8, 2020, at 12:00 PM.- Preference Shareholders: August 8, 2020, at 01:00 PM.- Secured Creditors: August 8, 2020, at 02:00 PM.- Unsecured Creditors: No meeting required as 92% consented.- Transferee Company:- Equity Shareholders: August 8, 2020, at 3:00 PM.- Secured Creditors: August 8, 2020, at 04:00 PM.- Unsecured Creditors: August 8, 2020, at 05:00 PM.3. Issuance of Notices:The Tribunal directed the applicant companies to issue individual notices to regulatory authorities including the Regional Director, Registrar of Companies, Official Liquidator, and Jurisdictional Assessing Officer. Notices should be sent 30 days in advance through registered post, speed post, courier, or email. Additionally, advertisements should be published in 'Business Standard' in both English and Hindi.4. Compliance with Statutory Provisions:The Tribunal emphasized compliance with Sections 230-232 of the Companies Act, 2013, and the Companies (Compromises, Arrangements, and Amalgamations) Rules, 2016. The applicants were required to file affidavits of service and publication compliance at least a week before the meetings.5. Directions for Conduct of Meetings:The Tribunal appointed a Chairperson, Alternate Chairperson, and Scrutinizer for the meetings. It specified the quorum for each meeting and outlined procedures if the quorum was not met. Voting was allowed in person, by proxy, postal ballot, or electronic means. The Tribunal also set fees for the appointed officials and directed the filing of reports post-meetings.Conclusion:The application was allowed with specific directions for convening meetings, issuing notices, and ensuring compliance with statutory requirements. The Tribunal's orders were to be strictly adhered to, ensuring the process aligns with the Companies Act, 2013, and related rules.