TMI Blog2021 (12) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... itors of the Transferee Company - when the Transferor and Transferee Company involve a parent Company and a Wholly Owned Subsidiary the meeting of Equity Shareholders, Secured Creditors and Unsecured Creditors can be dispensed with as the facts of this case substantiate that the rights of the Equity Shareholders of the Transferee Company are not being affected. Therefore, obtaining 90% consent Affidavits from its unsecured Creditors is not required keeping in view the facts of the attendant case. Appeal allowed. - COMPANY APPEAL (AT) No. 137 of 2021 - - - Dated:- 22-12-2021 - [Justice Anant Bijay Singh] Member (Judicial) And [Ms. Shreesha Merla] Member (Technical) For the Appellants : Mr. Krishnendu Datta, Sr. Advocate along with Mr. Shikher Upadhay, Ms. Prachi Golechha, Ms. Ranjana Roy Gawai, Mr. Hemant Sethi and Ms. Vasudha Sen, Advocates. JUDGEMENT [Per; Shreesha Merla, Member (T)] 1. Aggrieved by the Order dated 15.11.2021, passed by the NCLT (National Company Law Tribunal, Mumbai Bench-IV) in C.A. (CAA)/37/MB-IV/2021, M/s. Patel Hydro Power Private Limited and Ors. preferred this Appeal under Section 421 of the Companies Act, 2013 (hereinafter ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Post and e-mail to the Equity Shareholders of the Transferee Company whose email addresses are duly registered with the Transferee Company, addressed to each of the shareholders, at their last known e-mail addresses as per the records of the Transferee Company. 23. At least 30 (thirty) days before the aforesaid meeting of the Equity Shareholders of the Transferee Company to be held as aforesaid, an advertisement of notice convening the said meeting, indicating the day, date and time aforesaid be published once each in 'Business Standard' in English and 'Navshakti' in Marathi, both circulated at Mumbai, and stating that copies of the Scheme and the statement required to be furnished pursuant to Section 230 (3) of the Companies Act, 2013 can be obtained free of charge by emailing the Transferee Company. 24. Keeping in view of the fact and circumstances of the case, as 14 Transferor Companies are transferring into the Transferee Company and in the interest of the creditors of the Applicant Companies, this Bench directs the Transferee Company to issue Notice of Scheme to all its Unsecured Creditors by Registered Post-AD/Speed Post and by E-mail whose Email IDs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel further contended that since the Transferee Company would continue to be in existence post amalgamation, any pending Legal Proceedings by or against the Transferee Appellant Company would continue, in the same manner and in the same extent and there would be no diminution of obligations of the Transferee Appellant Company. It is also their case that direction of NCLT to hold Physical Meeting for Shareholder is contrary to Ministry of Corporate Affairs ( MCA ) clarification dated 08.04.2021, on manner and mode of issuance of Notice for conducting General Meetings which allows the listed Companies to conduct Meetings through VC or OAVM facilities and allows issuance of Notice to the Members for such Meetings by using only electronic means including registered email addresses of Members. The Learned Counsel placed reliance on the Judgement of this Tribunal in DLF Phase IV, Commercial Developers Limited and Ors. in Company Appeal (AT) No. 180 of 2019 and also in Ambuja Cements Limited Vs. --- (2021) SCC OnLine NCLAT 117. 6. For better understanding of the case, it is relevant to reproduce the Sections 230 and 232 of the Companies Act, 2013 and also the relevant Companie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be called in pursuance of an order of the Tribunal under sub-section (1), a notice of such meeting shall be sent to all the creditors or class of creditors and to all the members or class of members and the debenture-holders of the company, individually at the address registered with the company which shall be accompanied by a statement disclosing the details of the compromise or arrangement, a copy of the valuation report, if any, and explaining their effect on creditors, key managerial personnel, promoters and non-promoter members, and the debenture-holders and the effect of the compromise or arrangement on any material interests of the directors of the company or the debenture trustees, and such other matters as may be prescribed: Provided that such notice and other documents shall also be placed on the website of the company, if any, and in case of a listed company, these documents shall be sent to the Securities and Exchange board and stock exchange where the securities of the companies are listed, for placing on their website and shall also be published in newspapers in such manner as may be prescribed: Provided further that where the notice for the meeting is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall provide for all or any of the following matters, namely:-- (a) where the compromise or arrangement provides for conversion of preference shares into equity shares, such preference shareholders shall be given an option to either obtain arrears of dividend in cash or accept equity shares equal to the value of the dividend payable; (b) the protection of any class of creditors; (c) if the compromise or arrangement results in the variation of the shareholders rights, it shall be given effect to under the provisions section 48; (d) if the compromise or arrangement is agreed to by the creditors under sub-section (6), any proceedings pending before the Board for Industrial and Financial Reconstruction established under section 4 of the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) shall abate; (e) such other matters including exit offer to dissenting shareholders, if any, as are in the opinion of the Tribunal necessary to effectively implement the terms of the compromise or arrangement: Provided that no compromise or arrangement shall be sanctioned by the tribunal unless a certificate by the company s auditor has been filed with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. (2) Where an order has been made by the Tribunal under sub-section (1), merging companies or the companies in respect of which a division is proposed, shall also be required to circulate the following for the meeting so ordered by the Tribunal, namely:-- (a) the draft of the proposed terms of the scheme drawn up and adopted by the directors of the merging company: (b) confirmation that a copy of the draft scheme has been filed with the Registrar; (c) a report adopted by the directors of the merging companies explaining effect of compromise on each class of shareholders, key managerial personnel, promoters and non-promoter shareholders laying out in particular the share exchange ratio, specifying any special valuation difficulties; (d) the report of the expert with regard to valuation, if any: (e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication made to the Tribunal for compromise or arrangement.- Creditors Responsibility Statement. For purposes of sub-clause (c) of sub-section (2) of section 230 of the Act, the creditor s responsibility statement in Form No. CAA. I shall be included in the scheme of corporate debt restructuring. Explanation:- For the purpose of this rule, it is clarified that a scheme of corporate debt restructuring as referred to in clause (c) of sub-section (2) of section 230 of the Act shall mean a scheme that restructures or varies the debt obligations of a company towards its creditors. 5. Directions at hearing of the application.- Upon hearing the application under sub-section (1) of section 230 of the Act, the Tribunal shall, unless it thinks fit for any reason to dismiss the application, give such directions as it may think necessary in respect of the following matters:- (a) Determining the class or classes of creditors or of members whose meeting or meetings have to be held for considering the proposed compromise or arrangement; or dispensing with the meeting or meetings for any class or classes of creditors in terms of sub-section (9) of section 230; (b) fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 508 lakhs whereas in the case of the transferee company, there is an excess of assets over liabilities to the extent of ₹ 6,900 lakhs. 6. In the circumstances, the office objection is accordingly disposed of with the clarification that filing of a separate petition by the transferee company is not necessary, in the facts and circumstances of the present case. 9. In Eurokids India Pvt. Ltd. (C.S.D. No. 911 of 2014) dated 19.12.2014, the Hon ble High Court of Bombay observed as hereunder:- The Applicant Company is Wholly Owned Subsidiary of the Transferee Company and there is no re-organization of share capital of the Transferee Company and no new shares are being issued by the Transferee Company as all shares will be cancelled as per Clause 5 of the Scheme and rights of creditors of Transferee Company are not affected as mention in para 19 of the Affidavit in support of Summons for Direction and also in view of observations made by this court in Mahaamba Investment Ltd vs. IDI Ltd. (2001) 105 Co cases page 16 to 18, the filing of separate Company Summons for Direction and Company Scheme Petition under Section 391 and 394 of the Companies Act, 1956 by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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