Scheme of Arrangement demerger under Companies Act approved, rendering the amended scheme binding on companies, shareholders and creditors.

Sanction of a Scheme of Arrangement in the nature of a demerger is approved after satisfaction of statutory requirements under the Companies Act; the amended Scheme is declared binding on the petitioner companies, their shareholders, creditors and all concerned, and the petition is allowed. The summary records that the Scheme met the procedural and substantive compliance requirements for arrangement and demerger, resulting in court-sanctioned effectiveness and enforceability of the reorganisation as between the companies and third-party stakeholders.

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Issues: Whether the amended Scheme of Arrangement in the nature of demerger between Oravel Stays Private Limited (Demerged Company) and Oyo Hotels and Homes Private Limited (Resulting Company) can be sanctioned under Sections 230 and 232 of the Companies Act, 2013.

Analysis: Requirements under Sections 230 and 232 of the Companies Act, 2013 were examined with reference to convening and holding of meetings of preference shareholders, equity shareholders, secured creditors and unsecured creditors, service and publication of statutory notices, filing of chairpersons' reports recording meeting results, consent affidavits from sole secured creditors and compliance undertakings in response to the Regional Director's representation concerning stamp duty, FEMA/RBI approvals, and other statutory compliances. The meetings of relevant classes recorded unanimous approval of the amended Scheme, secured creditors provided written consent leading to dispensation of their meetings, statutory notices were published and served, and no adverse representations were received from notified authorities. The petitioners gave undertakings to comply with applicable statutory requirements including stamp duty, Sections 14 and 61 of the Companies Act and Section 2(19AA) of the Income Tax Act, and to pay quantified legal fees to the Regional Director.

Conclusion: The amended Scheme of Arrangement in the nature of demerger is sanctioned under Sections 230 and 232 of the Companies Act, 2013 and is binding on the companies, their shareholders and creditors.

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