THAT THE MERGER IS INVALID AND DOES NOT COMPLY WITH THE

PROVISIONS UNDER CHAPTER XV OF COMPANIES ACT, 2013.

It is humbly submitted before the Honble Supreme Court of India that the proposed merger
between shopkeepa.in and Mercado India is invalid on the grounds of non-compliance of
provisions of chapter XV of the Companies Act, 2013 which deals with mergers and
amalgamations. The same has been contented as there has been violation of various
provisions under Chapter XV of the Act. Sections under this chapter provide for an approval
of majority of creditors and shareholders in cases of mergers and amalgamations but no
majority has been achieved by the board of shopkeepa.in in approving the proposed merger.
Also the tribunal can dispense with the meetings of creditors only when the required majority
is accomplished, but in this case no majority of creditors has been achieved. Further it is
contended by the petitioners that the objections to the resolution as well as negotiation to
corporate debt restructuring (C.D.R.) also could not be finalised. The objective of a meeting
of shareholders and creditors is to ascertain their collective view either in favour of or against
a scheme of amalgamation or any other decision taken. Therefore it is a general rule under
company law that to arrive at a business decision there must be a meeting of shareholders and
creditors so that a collective decision may be arrived at. Also it is contended by the petitioner
that when such a scheme is proposed by a company, it is their duty to see that the scheme
does not go against the interest of the members of the company. Thus it is submitted that the
given scheme of merger is invalid and does not comply with the provisions of the Act.
THAT THE BOARD OF DIRECTORS ACTED BEYOND THEIR AUTHORITY AND
POWERS CONFERRED BY THE ACT AND THE BUY BACK SCHEME IS
AGAINST THE PROVISIONS OF THE ACT.
It is submitted by the petitioners that vast powers have been conferred by the Act to the Board
but while exercising such powers the board must not act beyond it or disregard the interests
of the members. A company owes a duty to its creditors to keep its property available for
repayment of debts. The management being vested in the directors, the directors owe a duty
to the company and the creditors to ensure that the affairs of the company are properly
conducted. It is submitted by the petitioners that in this case the board has not taken any steps
for safeguarding the interests of the creditors; rather they have flouted various provisions of
the Act while going through the proposed merger of the company. Moreover while
sanctioning the buy-back scheme; the company has neglected the provision involving

reduction of share capital which is one of the pre-requisites of the Act. Buy-back of securities
amount to reduction of capital of the company and in the interest of its creditors, it is
necessary to ensure that the company can meet its liabilities and subsisting obligations post
buy-back period. Therefore it is submitted by the petitioners that the board has acted beyond
its power and authority as conferred by the Act.