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2022 (10) TMI 744 - AT - Companies LawScheme of arrangement - Direction to Appellant Company to convene its Shareholders meeting in the matter of scheme of arrangement - Sections 230 to 232 of the Companies Act, 2013. Whether in a case where there is a scheme of arrangement between the wholly owned subsidiary and the holding company, and whether the meeting of the shareholders / creditors of the holding company or Transferee Company can be dispensed with, since in case there is no dilution in the shareholding of the shareholders of the Transferee Company and even post amalgamation the net-worth of the Transferee Company remain highly positive? HELD THAT:- It is an admitted fact that the Appellant is a Transferee Company and the Transferor Companies are wholly-owned subsidiary of the Appellant Company. The total shareholding i.e. (100% shares) of Transferor Companies are held by the Transferee Company. In the affidavit, the Appellant categorically mentioned that post amalgamation the net-worth of the Transferee Company will remain highly positive and the proposed scheme of arrangement will not result in any dilution in the shareholding of the shareholders of the Transferee Company. The rights of the shareholders of the Transferee Company are not affected as the proposed scheme does not involve any reorganisation in either the shareholding or debt position of the Transferee Company. This Tribunal considering the submissions of the Appellant that the Appellant Company is a holding company and no new shares are being issued, the rights of the shareholders of the Appellant Company are not affected, the scheme does not involve reorganisation of the share capital and the net-worth of the Appellant Company post amalgamation would remain highly positive - this Tribunal is of the view that the NCLT erred in not considering the decisions of this Tribunal which forms judicial precedents. We are of the view that rejecting the prayer of the of the Appellant is non-est and without application of mind. Appeal allowed.
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