Alpha Ltd., a parent company, owns 100% of the equity shares of Beta Ltd., its wholly owned subsidiary. The companies have proposed a scheme of merger/amalgamation under Section 232 of the Companies Act, 2013, whereby Be

Section 232(1) of the Companies Act 2013, states that when an application is made to the Tribunal under section 230 of the Companies Act, 2013 for the sanctioning of a compromise or an arrangement proposed between a company and any such persons as are mentioned in that section, and it is shown to the Tribunal - that the compromise or arrangement has been proposed for the purposes of, or in connection with, a scheme for the reconstruction of the company or companies involving merger or the amalgamation of any two or more companies; and that under the scheme, the whole or any part of the undertaking, property or liabilities of any company (hereinafter referred to as the transferor company) is required to be transferred to another company (hereinafter referred to as the transferee company), or is proposed to be divided among and transferred to two or more companies, the Tribunal may on such application, order a meeting of the creditors or class of creditors or the members or class of members, as the case may be, to be called, held and conducted in such manner as the Tribunal may direct and the provisions of sub-sections (3) to (6) of section 230 shall apply mutatis mutandis. Case Law: In the matter of Mohit Agro Commodities & Ors. NCLAT, dated June 28, 2021 When the "Transferor and Transferee Company" involve a Parent Company and a Wholly Owned Subsidiary the meeting of Equity Shareholders, Secured and Unsecured Creditors can be dispensed with as the rights of the Equity Shareholders of the "Transferee Company" are not being affected. Analysis and Answer: Based on the statutory provisions and the judicial interpretation in Mohit Agro Commodities & Ors., it is evident that the Tribunal has the jurisdiction to dispense with the meeting of equity shareholders, secured creditors, and unsecured creditors under Section 232 of the Companies Act, 2013. The Tribunal will evaluate: whether the proposed scheme alters stakeholders' rights, whether there is any internal impact on the creditors/members, and whether dispensing with meetings would violate any provisions of the Act. If satisfied that the rights and liabilities of stakeholders are unaffected and the scheme is fair and reasonable, the Tribunal may exercise its discretion to sanction the merger without requiring these meetings.