COMPANIES ACT, 2013

Section 421

Appeal from orders of Tribunal - Appeal against direction to convene meeting of shareholders - Scheme of arrangement not involved any re-organisation in either shareholding or debt - Allowability

Transferor companies and transferee company proposed a scheme of arrangement. They filed application for dispensation of meetings of shareholders, which was allowed by NCLT only in respect of the transferor companies. The transferee company filed an appeal against direction to convene the meetings of shareholders on the ground that the proposed scheme of arrangement would not result in any dilution in the shareholding of its shareholders. Held: The transferee company is a holding company and no new shares are being issued, the rights of the shareholders of the transferee company are not affected, the scheme does not involve reorganisation of the share capital and the net-worth of the transferee company post amalgamation would remain highly positive. Further, the transferee company having 6 shareholders in total and 5 shareholders have given their consent. The NCLT erred in not considering the decisions of this Tribunal which forms judicial precedents. Therefore, rejection of the prayer of the transferee company is non-est and without application of mind. Thus, the order was set aside and the prayer of dispensation of the meeting of the shareholders was allowed.

REFERRED : Gammon India Ltd. v. Commissioner of Customs Mumbai reported in (2011) 12 SCC 499 : 2011 TaxPub(EX) 945 (SC); Shilpi Cabletronics Ltd. & Ors. in Co. Appl. (M) No. 22/2012, dated 3-2-2012; Masterji Metalloys Pvt. Ltd. with Goodluck Steel Tubes Ltd. [Company Appeal (M) No. 9/2016, dated 18-1-2016]

FAVOUR : In favour of appellant

A.Y. :

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