Composite demerger scheme approved for procedural steps, with meetings partly convened and partly dispensed based on consent and creditor positions.

A composite demerger scheme was approved for procedural progression under the Companies Act, 2013 and the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The Tribunal noted board approval, supporting valuation and fairness materials, and regulatory observations, then directed convening of the demerging company's equity shareholders' and unsecured creditors' meetings. It dispensed with the secured creditors' meeting on the basis of full consent, and dispensed with the resulting company's equity shareholders' meeting because consent was unanimous. It also treated the absence of secured and unsecured creditors in the resulting company as removing the need for creditor meetings, and issued consequential directions on notice, publication, e-voting, chairperson, scrutiniser, quorum and service on statutory authorities.

---

---

Issues: Whether the joint application for approval of the proposed composite scheme of demerger should be allowed with directions for convening certain meetings, dispensing with other meetings, and issuing consequential notices, publications and procedural directions.

Analysis: The application was moved under the scheme provisions of the Companies Act, 2013 and the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The record showed that the proposed scheme had been approved by the boards, supported by valuation and fairness materials, and had received the requisite regulatory observations. The Tribunal also noted the shareholding and creditor positions of the demerging and resulting companies, including full consent from secured creditors and the absence of secured and unsecured creditors in the resulting company. On that basis, it issued directions for convening the meetings of the demerging company's equity shareholders and unsecured creditors, dispensed with the meeting of its secured creditors, dispensed with the resulting company's equity shareholders' meeting on the basis of unanimous consent, and treated the absence of creditors in the resulting company as obviating those meetings. It further directed notices, newspaper publication, e-voting, appointment of chairperson and scrutiniser, quorum requirements and service of notices on statutory authorities.

Conclusion: The application was allowed and the scheme was permitted to proceed subject to the procedural directions issued by the Tribunal.

---