JUDGMENT Gita Mittal, J. (Oral)- This joint application has been filed under Section 391 of the Companies Act, 1956 by the applicant companies seeking directions of this Court to dispense with the requirement of convening the meetings of the promoter/majority equity shareholder of the transferor company and secured and unsecured creditors of the transferor and transferee companies and for convening, holding and conducting of separate meetings of the minority equity shareholders of the transferor company and equity, shareholders of the transferee company to consider and approve, with or without modification, the proposed Scheme of Amalgamation of M/s. GE Capital Transportation Financial Services Limited (hereinafter referred to as transferor company) with M/s. GE Capital Services India (hereinafter referred to as the transferee company). 2. The registered offices of the transferor and transferee companies are situated at New Delhi, within the jurisdiction of this Court. 3. The transferor company was originally incorporated on 26th June, 1985 with the Registrar of Companies, NCT of Delhi and Haryana at New Delhi under the name and style of Shriram Fibres Finance Limited after passing necessary resolution to this effect and obtained the fresh certificate of incorporation on 13th November, 1991. The company again changed its name to GE Capital Transportation Financial Services Limited and obtained the fresh certificate of incorporation on 22nd October, 1997. 4. The transferee company was originally incorporated on 22nd October, 1993 with the Registrar of Companies, NCT of Delhi and Haryana at New Delhi under the name and style of GE Capital Services India Private Limited. The company changed its name to GE Capital Services India (a deemed public company with unlimited liability) after passing necessary resolution to this effect and obtained the fresh certificate of incorporation on 22nd January, 1996. The company again changed its name to GE Capital Services India (a public company with unlimited liability) and obtained the fresh certificate of incorporation on 2nd January, 2002. 5. The authorized share capital of the transferor company is Rs. 1,49,00,00,000/- divided into 14,90,00,000 equity shares of Rs. 10/- each. The issued, subscribed and paid up capital of the company is Rs. 20,26,37,400/divided into 2,02,63,740 equity shares of Rs. 10/- each. 6. The authorized share capital of the transferee company is Rs. 10,00,00,00,000/-divided into 1,00,00,00,000 equity shares of Rs.10/-each. The issued, subscribed and paidup capital of the company is Rs. 3,80,84,27,860/divided into 38,08,42,786 equity shares of Rs. 10/ - each. 7. 20,26,37,400/divided into 2,02,63,740 equity shares of Rs. 10/- each. 6. The authorized share capital of the transferee company is Rs. 10,00,00,00,000/-divided into 1,00,00,00,000 equity shares of Rs.10/-each. The issued, subscribed and paidup capital of the company is Rs. 3,80,84,27,860/divided into 38,08,42,786 equity shares of Rs. 10/ - each. 7. Copies of Memorandum and Articles of Association of the transferor and transferee companies have been filed on record. The annual reports of the transferor and transferee companies for the financial year 2007-08 containing the audited balance sheets as on 31st March, 2008 of the transferor and the transferor companies along with the report of the auditors have also been placed on record. 8. A copy of the Scheme of Amalgamation has been filed on record and the salient features of the Scheme have been incorporated and detailed in the application and the accompanying affidavits. It is submitted that the operations and business of the transferor and transferee companies are very similar. It is claimed that the amalgamation as proposed in the Scheme will streamline operations, enhance operational efficiency and combine, managerial and technical distribution and marketing resources of both the applicant companies in one combined entity. It is further claimed that the amalgamation as proposed will accordingly maximize shareholder value and create benefits from synergies of operations for both the entities and their employees and shareholders. 9. So far as the share exchange ratio is concerned, the Scheme provides that upon the Scheme becoming effective, the members of the transferor company shall receive equity shares of the transferee company or cash, as the case may be, in the following manner: "in view of the good corporate governance practices of the transferor company and the transferee company and in view of the ongoing delisting offer by GECMIC [under the SEBI (Delisting of Securities) Guidelines, 2003], to the minority shareholders at Rs. 110/- per fully paid up share of transferor company until April, 22, 2009, a cash consideration of Rs. 110/- for everyone fully paidup equity share of the transferor company held by the minority shareholders be paid by the transferee company as minority compensation." In view of the GECMIC being the promoter of the transferor company holding 92.74% fully paidup equity share capital as on January 30, 2009 and in order to ensure the continuity of the shareholding of GECMIC in the transferee company, 5 fully paid equity shares of Rs. 10/ - each of the transferee company be issued to GECMIC. 10. It is claimed by the applicants that no investigation proceedings under Sections 235 to 250A of the Companies Act, 1956 are pending against the applicant companies. 11. The Board of Directors of the transferor and transferee companies in their separate meetings held on 3rd March, 2009 have unanimously approved the proposed Scheme of Amalgamation. A copy of the Resolution passed at each of the meeting of the Board of Directors of the transferor and transferee companies has been placed on record. 12. The transferor company has no secured creditor and has 13 unsecured creditors, whereas the transferee company has 5 secured creditors and 39 unsecured creditors. A direction is sought to dispense with the requirement of convening the meetings of the secured and unsecured creditors of the transferor and transferee companies to seek their approval to the proposed Scheme of Amalgamation. 13. Learned Senior Counsel for the petitioners submits that the Scheme of Amalgamation of the transferor into the transferee company does not contemplate any compromise or arrangement with the secured and unsecured creditors of the transferor and transferee companies and the Scheme also does not provide for any variation in the amounts owed or payable to the secured and unsecured creditors of the companies nor does the Scheme create any variation in the rights of the secured and unsecured creditors. The Scheme is one between the companies and their shareholders and accordingly, it is submitted that the Scheme does not adversely affect the rights of the creditors and the arrangement embodied in the Scheme does not contemplate any extinction or reduction of liability to any secured or unsecured creditors nor are the terms of the credit proposed to be altered. The petitioner companies undertake that upon notice being issued by this Court on the confirmation petition to be filed for sanction of the Scheme, it shall issue notice to the secured and unsecured creditors of the petitioner companies inviting objections, if any, to the Scheme. 14. It would be useful to consider some of the provisions in the proposed Scheme in this behalf. 14. It would be useful to consider some of the provisions in the proposed Scheme in this behalf. In the chapter titled Vesting in Clause 3.1.1, it is proposed that: With effect from the appointed date and upon the Scheme becoming effective, the amalgamating company, together with all the properties, assets, rights, benefits and interests of the amalgamating company, shall be vested in and/ or be deemed to have been vested in and managed by the amalgamated company, as a going concern, without any further deed or act, subject to the provisions of this Scheme and in accordance with Sections 391-394 of the Act and all other applicable provisions of law, if any. Clause 3.1.2 (a) All assets, tangible or intangible, of the amalgamating company, as are movable or imcorporeal in nature or are otherwise capable of transfer, by manual or constructive delivery and/ or by endorsement and delivery or by vesting and recordal pursuant to the Scheme, shall stand vested in the amalgamated company and shall become the property and an integral part of the amalgamated company. The vesting pursuant to this paragraph shall be deemed to have occurred by manual or constructive delivery or by endorsement; and delivery, as appropriate to the property being vested and titled to the property shall be deemed to have been transferred accordingly. All other movable properties of the amalgamating company, including sundry debtors, deferred tax assets, service tax input credits, CENVAT credits, VAT/sales tax credits outstanding loans and advances, if any, recoverable in cash or in kind or for value to be received, bank balances and deposits, if any, with the Government, quasi-Government local and other authorities and bodies, customers and other persons, shall without any further act, instrument or deed, become the property of the amalgamated company, and the same shall also be deemed to have been transferred by way of assignment or delivery of possession of the respective documents, as may be appropriate in this regard. No stamp duty or taxes are payable on the transfer of such movable properties being vested in the amalgamated company. No stamp duty or taxes are payable on the transfer of such movable properties being vested in the amalgamated company. (b) All immovable properties, including land together with the buildings and structures standing thereon of the amalgamating company, whether freehold or leasehold and all documents of title, rights and easements in relation thereto shall stand transferred to and be vested in and transferred to and/ or be deemed to have been transferred to and vested in the amalgamated company, without any further act or deed done or being required to be done by the amalgamating company or the amalgamated company. The amalgamated company shall be entitled to exercise all rights and privileges attached to the immovable properties and shall be liable to pay the ground rent and taxes and fulfil all obligations in relation to or applicable to such immovable properties. The mutation or substitution of the title to the immovable properties shall, upon the Scheme becoming effective, be made and duly recorded in the name of the amalgamated company be the appropriate authorities pursuant to the sanction of the Scheme by the High Court in accordance with the terms thereof. (c) All debts, liabilities, contingent liabilities, duties and obligations, secured or unsecured, whether provided for or not in the books of account or disclosed in the balance sheets of the amalgamating company shall be deemed to be the debts, liabilities, contingent liabilities, duties and obligations of the amalgamated company, and the amalgamated company shall, and undertakes to, meet, discharge and satisfy the same. It is hereby clarified that it shall not be necessary to obtain the consent of any third party or other person who is a party to any contract or arrangement by virtue of which such debts, liabilities, duties and obligations have arisen in order to give effect to the provisions of this paragraph. Where any of the liabilities and obligations attributed to the amalgamating company on the appointed date have been discharged by the amalgamating company after the appointed date and prior to the effective date, such discharge shall be deemed to have been for and on behalf of the amalgamated company. Where any of the liabilities and obligations attributed to the amalgamating company on the appointed date have been discharged by the amalgamating company after the appointed date and prior to the effective date, such discharge shall be deemed to have been for and on behalf of the amalgamated company. (1) The secured creditors of the amalgamating company shall continue to be entitled to security in respect of the properties, assets, rights, benefits and interest of the amalgamating company (to whom such creditors had advanced the facilities), as existing immediately prior to the amalgamation of the amalgamating company with the amalgamated company. However, it is hereby clarified that pursuant to the amalgamation of the amalgamating company with the amalgamated company, the secured creditors of the amalgamating company shall not be entitled to any further security over the properties, assets, rights, benefits and interest of the amalgamated company which do not form part of the properties, assets, rights, benefits and interest of the amalgamating company which have been vested in the amalgamated company and hence such assets which are not currently encumbered shall remain free and available for creation of any security thereon in future in relation to any new indebtedness that may be incurred by the amalgamated company pursuant to sanction of the Scheme. For this purpose, no consent from the existing secured creditors is required for the sanction of the Scheme. Clause 3.4 The amalgamated company unconditionally and irrevocably agrees and undertakes to pay, discharge and satisfy all liabilities and obligations of the amalgamating company, with effect from the appointed date, in order to give effect to the foregoing provisions. 15. In support of the aforesaid submissions, learned Senior Counsel for the petitioners has placed reliance on the decision of the Division Bench of Calcutta High Court in Bengal Tea Industries Ltd. & Ors. v. Union of India & Anr., 93 CWN 542. In this pronouncement while dealing with a similar position with regard to the Scheme and an objection by one of the creditors, the Honble Division Bench has held that the assets of the transferor company which have been secured to meet the claim of respondent No.2 (creditor) will reach the transferee company subject to the same liabilities and will be available to the respondent No.2 (creditor) for beings proceeded against. On the other hand, the assets of the transferee company would also become available to meet the claims of the respondent No.2. The Court, therefore, concluded that the objections of the creditor cannot stand in the way of the sanction of the Scheme. 16. Learned Senior Counsel also drawn my attention to the decision of the Bombay High Court in Re: ICICI Ltd. (2002) 36 SCL 682 (Bom) where also the Court, in similar circumstances, dispensed with the requirement of convening the meeting of the creditors on the ground that the creditors of the transferor company were not, prima facie, likely to be adversely affected and also in view of the undertaking given by the Counsel for the transferor company that if any objection is raised by any creditor at the time of hearing of the petition for sanction of the Scheme under Section 391 the applicant would not raise any objection for granting hearing to the creditor or creditors on the grounds that the creditors have no right of hearing. Reliance is also placed on an order dated 26th June, 2008 passed in CA No. 611/2008 in Re: Mysore Cements Limited by the High Court of Karnataka granting dispensation in similar circumstances. 17. In view of the statutory provision and the principles laid down in the judicial pronouncements noticed above as well as the position of the accounts of the companies and the proposed Scheme, I find merit in the prayer for dispensation of the meeting of the creditors. 18. The undertaking given on behalf of the petitioner companies is accepted. It is directed that upon notice being issued by this Court on the confirmation petition to be filed for sanction of the Scheme, it shall issue notice to the secured and unsecured creditors of the petitioner companies inviting objections, if any, to the Scheme, the requirement of convening the meetings of the secured and unsecured creditors of the transferor and transferee companies to consider and, if thought fit, approving, with or without modification, the proposed Scheme of Amalgamation is dispensed with. This undertaking of the petitioners and the direction by this Court shall be brought to the notice of the Court considering the confirmation petition. Compliance thereof shall be placed therewith by way of affidavit. 19. The transferor company has approximately 7,143 equity shareholders. This undertaking of the petitioners and the direction by this Court shall be brought to the notice of the Court considering the confirmation petition. Compliance thereof shall be placed therewith by way of affidavit. 19. The transferor company has approximately 7,143 equity shareholders. It is submitted by the applicant that GE Capital (Mauritius) Investment Company Limited (GECMIC) currently holds 92.74% of the paidup equity share capital of the transferor company and being the promoter/majority shareholder has given its consent and approval to the Scheme, which is placed on record. The balance 7.26% of the equity share capital of the transferor company is held by approximately 7,142 equity shareholders as on 30.1.2009. The transferor company has, therefore, sought directions to dispense with the requirement of convening the meeting of the promoter / majority shareholders of the company and a direction is sought to convene and hold the meeting of the minority equity shareholders to seek their approval to the proposed Scheme of Amalgamation. In view of the consent received from GE Capital (Mauritius) Investment Company Limited (GECMIC), the meeting of the promoter / majority shareholder of the transferor company is dispensed with and the meeting of the minority 7,142 equity shareholders holding 7.26% of the equity share capital of the transferor company is directed to be held on 2nd May, 2009 at 10.00 a.m. at Air Force Auditorium, Subroto Park, New Delhi-110010. Ms. Purnima Sethi, Advocate (Mobile No. 9811037767) is appointed as the Chairperson and Mr. Ravinder Dutt Sharma, Delhi High Court, New Delhi (Mobile No. 9717394812) is appointed as the Alternate Chairperson to conduct the said meeting. The applicant further prayed that the quorum for the meeting shall be fixed in terms of Article 56 of the Articles of Association of the transferor company. As per Article 56, five members present in person shall be a quorum. In view of the above, the quorum of the meeting of the minority equity shareholders of the transferor company shall be 5 in number. 20. The transferee company has 7 equity shareholders and a direction is sought to convene and hold their meeting to seek their approval to the proposed Scheme of Amalgamation. Considering the facts and circumstances aforesaid, the meeting of the equity shareholders of the transferee company; is directed to be held on 2nd May, 2009 at 12.30 p.m. at Air Force Auditorium, Subroto Park, New Delhi-110010. Considering the facts and circumstances aforesaid, the meeting of the equity shareholders of the transferee company; is directed to be held on 2nd May, 2009 at 12.30 p.m. at Air Force Auditorium, Subroto Park, New Delhi-110010. Mr.A.K. Mahajan, Registrar, Delhi High Court (Mobile No. 9910390918) is appointed as the Chairperson and Ms. Madhu Singhal, Delhi High Court (Mobile No. 9871708041) is appointed as the Alternate Chairperson to conduct the said meeting. The applicant further prayed that the quorum for the meeting shall be fixed in terms of Article 79 of the Articles of Association of the transferee company. As per Article 79, three members present in person shall be a quorum. In view of the above, the quorum of the meeting of the equity shareholders of the transferee company shall be 3 in number. 21. In case the quorum as noted above for the above meetings is not present at the meetings, then the meetings would be adjourned by half an hour and thereafter the persons present and voting shall be deemed to constitute the quorum. For the purpose of computing the quorum the valid proxies shall also be considered, if the proxy in the prescribed form duly signed by the person entitled to attend and vote at the meetings is filed with the registered office of the applicant companies at least 48 hours before the meetings. The Chairpersons and Alternate Chairpersons shall ensure that the proxy registers are properly maintained. 22. The Chairpersons and Alternate Chairpersons shall ensure that notices for convening the aforesaid meetings of the minority equity shareholders of the transferor company and equity shareholders of the transferee company along with copies of the Scheme and statement under Section 393 of the Companies Act, 1956 shall be sent to the minority equity shareholders of the transferor company and equity shareholders of the transferee company by UPC at their registered or last known addresses at least 21 days before the date appointed for the meetings, in their presence or in the presence of their authorized representatives. Notice of the meetings shall also be published in the newspaper "Statesman" (English Edition) and "Veer Arjun" (Hindi Edition) in terms of the Companies (Court) Rules, 1959 at least 21 days before the date appointed for the meetings. 23. Notice of the meetings shall also be published in the newspaper "Statesman" (English Edition) and "Veer Arjun" (Hindi Edition) in terms of the Companies (Court) Rules, 1959 at least 21 days before the date appointed for the meetings. 23. The Chairpersons and Alternate Chairpersons will be at liberty to issue suitable directions to the management of the applicant companies so that the aforesaid meetings of the minority equity shareholders of the transferor company and equity shareholders of the transferee company are conducted in a just, free and fair manner. 24. The fee of the Chairpersons for the aforesaid meetings shall be Rs. 50,000/- each and the fee of the Alternate Chairpersons shall be Rs. 45,000/each, in addition to meeting their incidental expenses. The Chairpersons will file their reports within two weeks from the date of holding of the above said meetings. 25. The application stands allowed in the aforesaid terms. Dasti Application allowed.