2021 (9) TMI 634 - Tri - Companies Law

Equity Shareholders' Meeting for Scheme of Amalgamation Allowed with Specific Directions

The Tribunal allowed the application for convening Equity Shareholders' meetings regarding a Scheme of Amalgamation. Meetings were to be held physically ... Approval of the Scheme of Amalgamation - obtaining fresh orders/directions for convening meeting(s) of the Equity Shareholders of the Applicant Companies for consideration - HELD THAT:- Various directions with regard to holding, convening and dispensing with various meetings issued - directions with regard to issuance of various notices also issued. The scheme is approved - application allowed. Issues Involved:1. Convening of Equity Shareholders' Meetings2. Compliance with Government Restrictions Due to COVID-193. Dispensation of Sending Voluminous Documents Again4. Status of Secured and Unsecured Creditors5. Dispensation of Meeting for Preference Shareholder6. Directions for Fresh Meetings and NoticesIssue-wise Detailed Analysis:1. Convening of Equity Shareholders' Meetings:The application sought fresh orders for convening meetings of the Equity Shareholders of the Applicant Companies to consider and approve the Scheme of Amalgamation. The Tribunal had previously directed these meetings to be held physically on 21st May 2021. However, due to COVID-19 restrictions, the meetings could not take place as scheduled.2. Compliance with Government Restrictions Due to COVID-19:The Government of West Bengal imposed restrictive measures due to the COVID-19 pandemic, which led to the postponement of the scheduled meetings. The Applicant Companies published an advertisement on 20th May 2021 to inform shareholders of the postponement and that a new date would be notified later.3. Dispensation of Sending Voluminous Documents Again:The Applicant Companies requested that the requirement to resend bulky documents to shareholders be dispensed with, as these had already been sent earlier and there were no material changes in the information provided.4. Status of Secured and Unsecured Creditors:The position regarding the secured and unsecured creditors of Applicant Company Nos. 1 to 4 remained unchanged, i.e., NIL, as certified by a chartered accountant. Therefore, meetings for these creditors were deemed unnecessary. For Applicant Company No. 5, the requirement to convene a meeting of unsecured creditors was previously dispensed with, as the majority had already been notified and their debts were to be paid in the ordinary course of business.5. Dispensation of Meeting for Preference Shareholder:The sole preference shareholder of Applicant Company No. 5 had already given consent to the scheme, and there was no change in this position. Therefore, the requirement to convene a meeting for the preference shareholder was dispensed with.6. Directions for Fresh Meetings and Notices:The Tribunal directed that the meetings of the Equity Shareholders be held physically on 16th September 2021 at Trinity Plaza, Kolkata, subject to government restrictions. If physical meetings were not possible, they would be held virtually in accordance with the Ministry of Corporate Affairs' guidelines. Notices for the fresh meetings were to be sent at least 30 days prior, and advertisements were to be published in 'Financial Express' and 'Aajkaal'. The cut-off date for determining voting eligibility was fixed for 9th September 2021.Judgment:The Tribunal allowed the application and issued detailed directions for convening the meetings, including the mode of meetings (physical or virtual), the procedure for sending notices, and the requirements for quorum and voting. All previous directions from the order dated 22nd February 2021 remained in force. The Applicants were required to file an affidavit proving compliance with these directions at least one week before the meetings.The application COMP.APPL/100(KB)2021 was disposed of accordingly, and an urgent certified copy of the order was to be issued upon compliance with requisite formalities.