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TMI Blog2021 (9) TMI 411X X X X Extracts X X X X X X X X Extracts X X X X ..... ed order dated 21.10.2020 passed by the National Company Law Tribunal, Kolkata Bench ('Tribunal') in CP(CAA) No. 1106/KB/2020. Both the appeals seek primarily the relief to set aside the order dated 21.10.2020 as stated above. Both the appeals arising out of the same impugned order were clubbed and heard together for disposal of the case. 2. This is a case of amalgamation of 'SREI Infrastructure Finance Limited' the "Transferor Company" being a holding company with 'SREI Equipment Finance Limited' being the "Transferee Company" which is 100% subsidiary of the holding company in terms of business transfer agreement dated 16.08.2019 by way of 'Slump Exchange' the definition of which is given hereunder: "Slump Exchange" shall means transfer of undertaking to the Transferee, on a going concern basis, without values being without values being assigned to the individual assets and liabilities in exchange of issuance and allotment of Shares by the Transferee to the Transferor." 3. The Tribunal has passed the order for convening meeting of 'Creditors' as defined in Part-III of the Scheme (Part-III Creditor) and also meeting of Creditors as defined in Part-IV of the Scheme (Part -IV Cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors were held on 16.12.2020 and the proposed scheme has been rejected by the majority of the Secured Creditors, therefore, the proposed scheme has become infructuous as scheme now cannot be legally approved as per the provisions of the Act and related Regulations and subsequent events being cognizable, the Appellate Tribunal was requested to bring the proceedings to its logical conclusion. It was also submitted by the Appellant on a comparative analysis of Section 391 of the Companies Act, 1956 and Section 230 of the Act, there is no power to grant any stay of proceedings under the Act as was available under Section 391(6) of the Companies Act, 1956. Any order restraining statutory authority for performing their duties as provided under the specific statute cannot be granted while considering an application for approval of the Scheme. It is not in dispute that if final relief cannot be granted, no interim relief can be granted. There is an overriding effect of the 'Recovery of Debts and Bankruptcy Act, 1993', the 'Securitization and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002' and 'the Insolvency and Bankruptcy Code, 2016'. There are no prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appellant has been vested with broad powers and directions as are available to it under the RBI Act and BR Act and have statutory force Banks and financial institutions are bound to follow and are not amenable to judicial review. It is also not in dispute that RBI Act is a 'Self-contained Code'. The Appellant under Section 35A of the RBI Act has to pass direction to the Respondent being NBFC and take action in the interest of depositors and the Banking Company. The Tribunal is a creature of the Act and has to be within the four walls of the Act and related Regulations. Section 230- 232 of the Act cast a limited obligation on the Tribunal to satisfy the scheme is not contrary to public policy and is not prejudicial to the creditors and members of the company. 6. While the Respondent No.1 - SREI Equipment Finance Limited has submitted that the Tribunal has passed the order for holding of meeting of creditors under the scheme and has only given the directions to the said creditors to maintain a status quo with respect to a respective contractual terms, claims and rights and estopped them from taking any coercive steps including reporting in any form. The Respondents have also alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Companies (Compromises, Arrangements and Amalgamations) Rules 2016 as amended from time to time. c. Generally, there are two motions. In the first motion in accordance with Section 230 of the Act, Meetings are called for all the creditors or class of creditors and to all the members or class of members and the debentures holders of the Company. The Creditors or class of creditors, or members, or class of members as the case may be, have to approve by a majority of persons representing three-fourth in value of creditors or class of creditors or members or class of members or in a case of a company being wound up then the Liquidator /Insolvency Professional and the contributories of the Company. d. The Tribunal is to issue notice under Section 230(5) of the Act to the Central Government, the Income Tax Authorities, the RBI, the Security and Exchange Board, the Registrar, the Stock exchanges, Official Liquidator, Competition Commission of India as applicable and such other regulator or authority which are likely to be affected by the Compromises or Arrangements and shall require their representation to be made. e. The Tribunal may dispense with calling of meeting of creditors ..... X X X X Extracts X X X X X X X X Extracts X X X X
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