Scheme of arrangement meetings dispensed with for consenting classes, while transferee company creditor meetings were ordered to proceed.

Where equity shareholders and identified creditors had given written consent, or no such creditor class existed, the Tribunal dispensed with their meetings for consideration of the proposed scheme of arrangement. The applicant companies supported the scheme with board approvals, valuation reports, financial statements and regulatory clearances, and the record showed consent from the sole secured creditor of one demerged company, with no secured or unsecured creditors in the relevant resulting and demerged entities. As the transferee company had substantial secured and unsecured creditors, their meetings were directed to be convened with notices, advertisement, quorum, proxy, voting, chairmanship, scrutiny, statutory intimation and reporting requirements under the Companies Act, 2013 and the 2016 Rules.

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Issues: Whether the meetings of equity shareholders and certain creditors of the applicant companies could be dispensed with, and whether meetings of the secured and unsecured creditors of the transferee company were to be convened with consequential procedural directions for consideration of the proposed scheme of arrangement.

Analysis: The applicant companies supported the scheme with board approvals, valuation reports, financial statements, and the requisite regulatory clearances. The equity shareholders of all the companies had given written consent by affidavit, and the record showed that one demerged company had only one secured creditor who had also consented. The resulting companies had no secured creditors, and the demerged and resulting companies had no unsecured creditors. The transferee company, however, had substantial secured and unsecured creditor bases, requiring creditor meetings for approval of the scheme. In light of the consents and the absence of creditors where shown, the Tribunal dispensed with the relevant shareholder and creditor meetings, while directing convening of the transferee company's secured and unsecured creditors' meetings along with notices, advertisement, quorum, proxy, voting, chairmanship, scrutiny, statutory intimation, and reporting requirements under the Companies Act, 2013 and the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.

Conclusion: The dispensation sought for the shareholders' meeting and the specified creditor meetings was granted, and the transferee company's creditor meetings were ordered to be convened with the prescribed directions.

Final Conclusion: The application was allowed and the scheme was permitted to proceed subject to the directed convening and compliance steps.

Ratio Decidendi: Where the affected shareholders and creditors have given consent or do not exist, meetings under a scheme of arrangement may be dispensed with, while meetings remain necessary for classes of creditors whose approval is required for consideration of the scheme.

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