2020 (12) TMI 39 - Tri - Companies Law

Merger application approved under Companies Act: Shriram Bioseed Ventures & Bioseeds Limited

The application for merger under Sections 230-232 and 234 of the Companies Act, 2013, involving Shriram Bioseed Ventures Limited as the Transferee Company ... Scheme of Amalgamation - dispensing with convening of meetings - consent affidavits - no secured creditors - no meeting required - appointed date - service on statutory authoritiesScheme of Amalgamation - dispensing with convening of meetings - consent affidavits - Dispensing with convening and holding of the meeting of equity shareholders of the Transferee Company. - HELD THAT: - The Tribunal examined the affidavits of consent placed on record and the certificate from the Chartered Accountant certifying the list of equity shareholders showing 100% of voting share in favour. On that basis, and having regard to the requirements for convening meetings under the Scheme of Amalgamation, the Tribunal found it appropriate to dispense with the convening and holding of a meeting of the equity shareholders of the Transferee Company.Meeting of equity shareholders of the Transferee Company is dispensed with in view of filed consent affidavits constituting 100% voting share.No secured creditors - no meeting required - Whether a meeting of secured creditors of the Transferee Company was required to be convened. - HELD THAT: - The record, including the certificate from the Chartered Accountant, established that the Transferee Company has no secured creditors. In the absence of any secured creditors, the statutory requirement to convene a meeting of secured creditors does not arise and no further action in that regard was necessary.No meeting of secured creditors required as there are no secured creditors.Dispensing with convening of meetings - consent affidavits - Dispensing with convening and holding of the meeting of unsecured creditors of the Transferee Company. - HELD THAT: - The Tribunal considered the certificate from the Chartered Accountant and the affidavit filed by the lone unsecured creditor, which represented 100% of the total value of debt and gave consent to the Scheme. Given the unanimous consent evidenced on the record, the Tribunal concluded that convening a meeting of unsecured creditors was unnecessary and dispensed with holding such a meeting.Meeting of unsecured creditors is dispensed with in view of the consent affidavit representing 100% of the debt.Service on statutory authorities - appointed date - Directions regarding service of notice to statutory authorities and related disclosure requirements. - HELD THAT: - The Tribunal directed that notice of the application be served on specified statutory authorities including the Regional Director, Registrar of Companies, Official Liquidator and Income Tax Department, and any other sectoral regulators as required. The Tribunal specifically required that notices to the Income Tax Authorities disclose sufficient details such as PAN, ward numbers and assessing officers so that timely and proper replies may be filed. The appointed date in the Scheme was recorded as 23rd August 2019 subject to directions of the Tribunal.Application to be notified to the listed statutory authorities with the required disclosure; appointed date recorded subject to Tribunal's directions.Final Conclusion: The application for sanction of the Scheme of Amalgamation is allowed on the terms recorded: meetings of the Transferee Company's equity shareholders and unsecured creditor are dispensed with on account of consent affidavits; no meeting of secured creditors is required; and the specified statutory authorities are to be served with notice including the prescribed disclosures. Issues:Application for merger under Sections 230-232 and 234 of Companies Act, 2013 - Scheme of Arrangement by way of Amalgamation - Approval by Board of Directors - Shareholders' and Creditors' meetings dispensation - Directions for convening meetings - Notice to Statutory Authorities.Analysis:The judgment pertains to an application by a company, referred to as the Transferee Company, for the merger with another company, the Transferor Company, under the provisions of Sections 230-232 and 234 of the Companies Act, 2013. The application is made in relation to a Scheme of Arrangement by way of Amalgamation proposed between the two companies. The Transferee Company, Shriram Bioseed Ventures Limited, and the Transferor Company, Bioseeds Limited, have filed necessary documents, including Memoranda, Articles of Association, and balance sheets, to support the merger. Both companies have obtained approval for the proposed Scheme of Amalgamation through board resolutions passed on specific dates.Regarding the Transferee Company, it is highlighted that the company has equity shareholders, preference shares in the Transferor Company, and an unsecured creditor. The company has obtained consent from all equity shareholders and the unsecured creditor through affidavits, dispensing with the need to convene meetings for their approval. As there are no secured creditors, the requirement for a meeting with them is deemed unnecessary. The appointed date for the merger is specified in the Scheme, subject to the Tribunal's directions.The judgment provides directions for convening or dispensing with meetings of shareholders and creditors. For the Transferee Company, it is decided that due to the consent affidavits from all equity shareholders and the unsecured creditor, the meetings of shareholders and unsecured creditors are dispensed with. Since there are no secured creditors, the need for convening a meeting with them is eliminated. Additionally, the judgment mandates serving notices of the application to various Statutory Authorities, including the Regional Director of the Ministry of Corporate Affairs, Registrar of Companies, Official Liquidator, Income Tax Department, and other sectoral regulators as required.In conclusion, the application for the merger is allowed on the specified terms, and the case is disposed of accordingly. The judgment emphasizes compliance with the Companies Act, 2013, and the Rules governing Compromises, Arrangements, and Amalgamations, ensuring transparency and adherence to legal procedures throughout the merger process.