Dispensation of Shareholders & Creditors Meetings in Amalgamation Scheme under Companies Act

The National Company Law Tribunal allowed the application under Sections 230 to 232 of the Companies Act, 2013, seeking dispensation of meetings of shareholders and creditors for approval of a Scheme of Amalgamation involving multiple companies. The Tribunal dispensed with the need for convening meetings of Unsecured Creditors for all Transferor Companies as more than 90% in value of unsecured creditors had given their no objection to the Scheme. The Application was allowed in the specified terms.

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Issues: Application under Sections 230 to 232 of the Companies Act, 2013 seeking dispensation of meetings of shareholders and creditors for approval of a Scheme of Amalgamation involving multiple companies.

In this judgment by the National Company Law Tribunal, the Application No. C.A.(CAA)79/ND/2021 was filed under Sections 230 to 232 of the Companies Act, 2013. The application sought to dispense with the meetings of shareholders and creditors concerning the Transferor and Transferee Companies in relation to the proposed Scheme of Amalgamation. The Scheme was intended to be effective from the Appointed Date of 01.01.2021. The Applicant Companies included Howzat Games Private Limited, Pepperpotts Developers Private Limited, Jeu Electronique Software Private Limited as Transferor Companies, and Junglee Games India Private Limited as the Transferee Company. The Board of Directors of the Applicant Companies had approved the Scheme in meetings held on 31.05.2021. The Scheme aimed at various advantages, including designing and developing software, managing online gaming platforms, and providing consultancy services in the field of computer games programming. The Applicant Companies confirmed that they were not under any prosecution/investigation/inquiry under the Companies Act, 2013, and their Accounting Standards were in conformity with the Act. They had also submitted their Memorandum of Association, Articles of Association, and latest Balance Sheets.

Regarding the consent of shareholders and creditors, all shareholders of the Applicant Companies had given their no objection to the Scheme through respective affidavits, eliminating the need for convening shareholder meetings. However, the consent of Unsecured Creditors of the Transferee Company had not been obtained. Therefore, a separate meeting of the Unsecured Creditors of the Transferor Companies was to be convened through Video Conferencing. The details of the quorum, time, and date of the meeting were specified, along with the appointment of a Chairman and a scrutinizer for the meeting. The notice of the meetings was to be sent well in advance, and advertisements were to be published in newspapers. Voting on the proposed Scheme was to be allowed in person, with the Chairman responsible for reporting the results within 7 days. The Transferor Company was directed to serve notices to relevant authorities, and objections were to be raised within a stipulated timeframe. The Chairman's Report was to be filed with the Tribunal within 7 days of the meeting's conclusion. As there were no Secured Creditors in any of the Applicant Companies, their meeting requirement was deemed unnecessary. Additionally, since more than 90% in value of unsecured creditors had given their no objection to the Scheme, the need for convening meetings of Unsecured Creditors for all Transferor Companies was dispensed with. Ultimately, the Tribunal allowed the Application in the specified terms.

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