TMI Blog2020 (10) TMI 1277X X X X Extracts X X X X X X X X Extracts X X X X ..... m required majority of the creditors (as defined in Part III of the scheme) of SEFL to the completed acquisition by way of Slump Exchange (as defined in the scheme) of the transferred undertaking (as defined in the scheme) from SREI Infrastructure Finance Ltd. ( SIFL ) in terms of the business transfer agreement dated August 16, 2019 ( BTA ) (and as defined in the scheme) and consequential formal novation of the loans (and securities) already forming part of SEFL liabilities and outstanding to the creditors (as defined in Part III of the scheme) ; and (ii) issue of non-convertible debentures (as defined in Part IV of the scheme) to the secured creditors (as defined in Part IV of the scheme) of SEFL in the manner and on the terms and conditions stated in the said scheme annexed to the application and marked annexure A. 2. Learned senior counsel appearing for the applicant, took us through the averments made in the application as well as the documents annexed hereto. The circumstances which justify and/or have necessitated the said scheme of arrangement and the benefits of the same are, inter alia, as follows : (i) The said scheme will enable the creditors (defined in Part I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forming part of the transferred undertaking, as an inseparable whole, on a going concern basis for final exchange shares and the Slump Exchange, as such, stood completed and consummated on and from October 1, 2019. 4. For the purposes of consummation of the Slump Exchange, SEFL and SIFL had undertaken actions and obtained approvals, consents and permissions as recorded in Part III of the scheme. 5. SEFL has already issued and allotted equity shares to SIFL in terms of the BTA as part of the consideration on December 31, 2019. 6. Related agreements (as defined in the BTA) and the other documents have been executed between the relevant parties for the purposes of compliance with the provisions of applicable laws, for conveying and assigning the right, title and interest of SIFL in the immovable properties, liabilities, financial assets and transferring the intellectual property rights in relation to the transferred undertaking in favour of SEFL. 7. The creditors included in Part III of the scheme had accorded their implied consent to the Slump Exchange and accordingly the cash flows of SEFL are currently being used to service the creditors included in Part III of the sch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, the said circulars on moratorium by themselves could not achieve the desired results. In view of the continued need to support the viable MSME entities on account of the fallout of Covid-19, the RBI issued a circular dated August 6, 2020 (the First 6 August Circular ) to allow the MSME sector entities to restructure their advances whose aggregate exposure to banks and NBFCs do not exceed ₹ 25 crores. By the said First 6 August Circular, the RBI mandated the banks and NBFCs to restructure existing loans to MSMEs classified as standard without a downgrade in the asset classification. 10. Learned senior counsel continues that on the same day, i. e., August 6, 2020 RBI also issued another circular applicable generally to all borrowers (other than those MSMEs covered under the First 6 August Circular and others) allowing all such borrowers to avail onetime restructuring of their borrowings with banks and NBFCs ( Second 6 August Circular and along with First 6 August Circular collectively referred to as RBI August Circulars ). By this Second 6 August Circular the RBI mandated the banks and NBFCs to provide one-time restructuring facility to their borrowers who fulf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant-company confirms that the accounting treatment, if any, arising out of the said scheme will be in conformity with the accounting standards prescribed under section 133 of the Companies Act, 2013 (annexure G). 16. The scheme does not involve any arrangement with its shareholders. There shall be no issuance or allotment of shares/securities to any class of shareholders and their interests in the applicant-company shall remain unchanged. In view of the aforesaid, no meeting of shareholders is required to be held/convened. 17. The scheme embodies arrangement between SEFL and its creditors which are covered under Part III and Part IV of the said scheme and as specifically provided under Schedules I and II therein and separately in the application (annexures M1 and M2 respectively at pages 432 and 433). 18. The scheme proposes arrangement with two types of creditors of the applicant-company more fully defined in Part III and Part IV of the scheme and hence separate meetings of such Part III and Part IV creditors are required to be directed. The applicant prays that in the circumstances, this hon'ble Tribunal would be pleased to pass necessary directions and orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e current state of affairs, it is prayed that an interim order in terms of sub-clause (e) of paragraph 7 of the application (reliefs sought) should be granted. Learned counsel relies on order dated October 15, 2018 of the hon'ble National Company Law Appellate Tribunal in Union of India v. Infrastructure Leasing and Financial Services Ltd. ; order of the hon'ble Supreme Court of India in ITO, Cannanore v. M. K. Mohammed Kunhi [1969] 71 ITR 815 (SC) ; AIR 1969 SC 430 and order of the hon'ble Supreme Court of India in Savitri v. Govind Singh Rawat, AIR 1986 SC 984. 23. Heard submissions made on behalf of the applicant. Perused the documents annexed to the application. Upon hearing the submissions and relying upon the documents available in the records, I pass the following orders : (i) Meeting of creditors as defined in Part III of the scheme (Part III creditors) of the applicant-company be held at The Westin , International Financial Hub, CBD/II Action Area II, New Town, Kolkata-700 156 on Wednesday, December 16, 2020 at 11.30 a.m., for the purpose of their considering, and if thought fit, approving, with or without modification, the said scheme of arrangement. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same by hand delivery through special messenger or by post forthwith after the notices are sent to the creditors under the scheme in terms of rule 8(2) of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The notice shall specify that representation, if any, should be filed before this Tribunal within 30 days from the date of receipt of the notice with a copy of such representation being simultaneously sent to the advocates of the said applicant. If no such representation is received by the Tribunal within such period, it shall be presumed that such authorities have no representation to make on the said scheme of arrangement. Such notice shall be sent in form No. CAA3 of the Companies (Com promises, Arrangements and Amalgamations) Rules, 2016 with necessary variations, incorporating the directions herein. (vii) That the quorum for the said meetings of the Part III and Part IV creditors of the applicant-company shall be fixed in accordance with section 103 of the Companies Act, 2013 present either in person or by proxy. (viii) It is however provided that in case the quorum of the meeting is not available on the scheduled time and date, the chairperson ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistered office of the applicant- company not later than 48 (forty eight) hours before the time for holding such meeting. (xv) The votes cast at the said respective meetings shall be scrutinised by the scrutiniser. The scrutiniser shall prepare and submit the respective reports on the meetings along with all papers relating to the voting to the respective chairperson of the said meetings. The respective chairpersons shall declare the respective results of the meetings after submission of the respective reports of the scrutiniser to him. (xvi) The value of each creditor under Part III and Part IV of the scheme shall be in accordance with the respective books of the applicant and, where entries in the books are disputed, the chairperson shall deter mine the value for the purpose of the meeting. The value of the creditors shall be considered as on August 31, 2020 for the said purpose. (xvii) That the respective chairperson do report to this Tribunal the respective results of the said meetings within four weeks from the date of the conclusion of the said meetings. The report shall be in form No. CAA4 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, v ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
