ABC Ltd. is planning for merger with RST Ltd. As a Company Secretary you have advised your management that all shareholders of transferor and transferee can give consent for the merger and thereby the shareholders meetin

As per Section 230(9) of the Companies Act, 2013, the National Company Law Tribunal (NCLT) may dispense with calling of a meeting of creditor or class of creditors where such creditors or class of creditors, having at least ninety per cent value, agree and confirm, by way of affidavit, to the scheme of compromise or arrangement. In the matter of Scheme of Amalgamation between Jupiter Alloys & Steel (India) Limited vs. Jupiter Wagon Limited , the question of 'whether tribunal can grant dispensation of shareholders meeting regarding proposed scheme of amalgamation in case where all the shareholders have given consent and Companies Act provides only for dispensation of meetings of creditors having 90% value agreed and confirmed by way of affidavit?', was laid before the Court. The two member Hon'ble NCLT Kolkata Bench held that the word "may" as provided in section 230(9) of the Companies Act, 2013 introduces an element or essence of discretion, and thus vests in the NCLT an inherent power to dispense with the meeting of the member and/or creditors. Finally, the bench, noting that NCLT has inherent power under Rule 11 of National Company Law Tribunal Rules, 2016 read with Rule 24(2) of Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (CAA Rules) allowed dispensation of the meeting of the shareholders, whilst observing the following: "It cannot be ignored that almost all the High Courts have exercised this discretion since long and dispensed with the calling of the meetings in appropriate situations. The precedents created by the High Courts to dispense with the requirement of convening the meetings are worth and continuation of such precedents are virtue in the era of ease of doing businesses as well as future course of corporate actions. A settled issue should not be unsettled without proper reasons. Thus, the notion that calling of meetings is mandatory does not stand. Based on the above-mentioned case law where all shareholders have given their consent and post-merger there shall be positive net worth and the creditors are not compromised, it is advised to the management to get the written consent of all shareholders of transferor and transferee so that the requirement of shareholders meeting can be dispensed with.