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TMI Blog2021 (12) TMI 1241X X X X Extracts X X X X X X X X Extracts X X X X ..... as prayed for dispensing with the meetings of the shareholders of all the applicant companies and that of the unsecured creditor of the Applicant No.1/Transferor Company and Applicant No.3/Resulting Company. They have also prayed for calling for the meeting of the Secured creditors of the Applicant No.1/Transferor Company and Applicant No.2/Transferee Company, and also the unsecured creditor of the Applicant No.2/Transferee Company. 2. The Applicant No.1/Transferor Company, Applicant No.2 /Transferee Company and Applicant No.3/Resulting Company are presently engaged in the business to manufacture, fabricate, process and to purchase, sell, import-export or otherwise deal in all types of component parts, accessories, spares and fittings of all kinds of or automotive, general engineering, petrochemicals, miscellaneous industries in allied fields of all types and description. 3. The rationale of the Scheme is given below:- i. Both the Transferor and Transferee Companies are family-owned closely held un-listed Group Companies under common shareholding, management and control. The proposed amalgamation of the Transferor Company with the Transferee Company would result in consolidatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cant Companies have authorized Mr. Jagdish Singh, Ms. Amardeep Kaur, Mr. Chandar Shekhar Shingari and Ms. Malti Ohri, to do all acts and deeds and things in relations to the Scheme. The affidavit of Mr. Chandar Shekhar Shingari, authorised signatory of the Applicant Companies has been filed in support of contents of the application for seeking appropriate orders/directions. 5. In the Scheme, there is a mention of two appointed dates i.e. Appointed Date-1 and Appointed Date-2. The "Appointed Date-1" is relevant for the purpose of amalgamation of Applicant No.1 with Applicant No.2 in terms of this Scheme, and "Appointed Date-2" is relevant for the purpose of the demerger of Real Estate and Ancillary Business of Applicant No.2 into Applicant No.3 in terms of this Scheme. 6. It is submitted that the registered office of the Applicant No.1/Transferor Company, Applicant No.2/Transferee Company and Applicant No.3/Resulting Company is situated in the State of Punjab and, therefore, the jurisdiction of all the applicant companies is under the territorial jurisdiction of this Bench. 7. The Applicant Companies have furnished the details of the Shareholders. Secured Creditors and Unsecured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribed and Paid-up Capital of the Company is Rs.65,87,800/- divided into 6,58,780 Equity Shares of Rs.10/- each. 12. The Applicant No.2/Transferee Company i.e. Guru Nanak Auto Enterprises Ltd CIN: U50404PB1974PLC003420 is a company as a public limited company under the Companies Act, 1956 on 5th March, 1981. The Master Data of the Company along with Memorandum and Articles of Association is attached as Annexure A-2/1 of the application. The Authorised Share Capital of the Applicant No.2/Transferee Company is Rs.40,00,00,000/- divided into 3,50,00,000 Equity Shares of Rs.10/- each and 50,00,000 Preference Shares of Rs.10/- each. The present Issued, Subscribed and Paid-up Capital of the Company is Rs.23,12,16,450/- divided into 2,31,21,645 Equity Shares of Rs.10/- each. 13. The Applicant No.3/Resulting Company i.e. ASKK Estates Pvt. Ltd. CIN: U70109PB2021PTC054162 is a company as a private limited company under the Companies Act, 2013 on 4th September, 2021. The Master Data of the Company along with Memorandum and Articles of Association is attached as Annexure A-3/1 of the application. The Authorised Share Capital of the Applicant No.3/Resulting Company is Rs.10,00,000/- divided in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity Shares of Rs. 10 each held I the Transferee Company - Guru Nanak Auto Enterprises Ltd. It is clarified that, for the purpose of Demerger, the Resulting Company will issue shares to such shareholders of the Transferee Company after giving effect to allotment of shares pursuant to amalgamation of the Transferor Company with the Transferee Company. C. Re-organisation/Reduction of Capital of Resulting Company: The Resulting Company will issue 1 (one) 9% Compulsorily Redeemable Preference Shares of Rs. 10 each, credited as fully paid-up, for every 1 (one) Equity Share of Rs. 10 each held in the Resulting Company and the pre-Scheme issued and paid-up share capital of the Resulting Company consisting of 10,000 Equity Shares of Rs. 10 each aggregating Rs. 1,00,000 will be cancelled." 19. It is submitted by the learned counsel that the Scheme (Annexure A-5) also takes care of the interests of the staff/workers and employees of the Applicant Companies. It is stated in Clause 3.7 of the Scheme that upon scheme becoming effective, all staff, workmen and employees of the Transferee Company, in relation to the Demerged Business, in service on the Effective Date, shall become and deem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss of creditors, or of the members or class of members, as the case may be, to be called, held and conducted in such manner as the Court directs." 21. In the course of the present proceedings, it is argued that a perusal of the above two extracts shows that Section 230 of the new Act is pari materia with Section 391 of the old Act. It is further submitted that the Hon'ble High Courts across the country have in many cases dispensed with the requirement of calling meetings of the shareholders of a company under the Companies Act, 1956. It has also been brought to our notice that even after the promulgation of the new Act, many High Courts have directed dispensation of equity shareholders' meetings in a proposed Scheme of Amalgamation. The decisions of the Hon'ble Delhi High Court in the case of Basera Realtech Private Ltd., Company Application (Main) No. 150/2015 decided on 02.11.2015 and the decisions of the Hon'ble Calcutta High Court in the cases of Traita Properties Private Limited, CA No. 46/KB/2018 TP No. 75/2017 in CP No.763/2016, Decided on: 28.02.2018 and Dalmia Securities Private Ltd., TP No.53/2017 in CA No.1000/2016 decided on 01.03.2017, passed under Section 391(1) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beyond the scope of a given Section continuing in some veil; ii. The Section 230(1) is, may... order meeting, meaning thereby the court may order or may not order meeting, but not to dispense with meeting. Discretion is either to order or not to order for calling meetings, not otherwise. The Tribunal cannot read dispensation of calling and holding shareholders' meetings into sub-Section 230(1) that is conspicuously absent in the Section. iii. He also made a reference to sub-Section (9) of Section 230 wherein a specific mention has been made for dispensation of creditors meeting and observed that if such is the discretion contemplated in sub-Section 230 (1), the legislature would not have carved out a standalone provision for dispensation of creditors meeting under sub- Section 230(9) of the Act. 25. In his order, the Third Member has also referred to the report of the Parliament Standing Committee on the Companies Bill, 2011 wherein the Ministry had rejected a proposal for dispensing with the meeting of shareholders of closely held companies with the observation that meetings of members are considered to be essential for such important matters to ensure corporate democrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the First Motion as a whole, to call Meeting of preferential shareholders, fault cannot be found. Even if the Affidavits are taken, it would still be discretion of NCLT looking to the nature of the litigation to take a decision and it am stilt direct calling for meeting to be held of a particular class of shareholders" 29. This Tribunal is conscious of the decision of the Hon'ble Apex Court in the case of Collector of Central Excise, Kanpur Vs. Matador Foam and Ors. (2005) 2 SCC 59 decided on 05.01.2005, excerpts from para 16 whereof are reproduced, observed:- ".... These being judgments of coordinate benches were binding on the Tribunal. Judicial discipline required that the Tribunal follow those judgments. If the Tribunal felt that those judgments were not correct, it should have referred the case to a larger bench." The Hon'ble Supreme Court in the case of S.I. Rooplal & another vs. Ltd. Governor & others, reported in (2000) 1 SCC 644 dated 14.12.1999 has also held that: "12. At the outset, we must express our serious dissatisfaction in regard to the manner in which a coordinate Bench of the tribunal has overruled, in effect, an earlier judgment of another coordinate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng in view the shareholding and ownership pattern of the company and the fact that the consent by way of affidavits has been received; ii. The meeting of the Secured Creditors is to be convened as prayed for on 05.03.2022 at 12.00 PM through Video Conferencing with facility of remote e-voting, subject to notice of meeting being issued. The quorum of the meeting of the secured creditors shall be 4 in number personally present or 40% in value of the secured creditors; iii. The meeting of the Unsecured Creditors is to be convened as prayed for on 05.03.2022 at 2.00 PM through Video Conferencing with facility of remote e-voting, subject to notice of meeting being issued. The quorum of the meeting of the unsecured creditors shall be 196 in number personally present or 40% in value of the unsecured creditors; C. In relation to Applicant No.3/Resulting Company : i. The meetings of the equity shareholders is dispensed with keeping in view the shareholding and ownership pattern of the company and the fact that the consents by way of affidavits have been received; ii. Since, there are no secured creditors, there is nothing to convene their meetings; iii. Since, there are no unsec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the effect of the scheme on the creditors, key managerial personnel, promoters and non-promoter members etc. along with effect of the arrangement for amalgamation on any material interests of the Directors of the Company or the debenture trustees, if any, as provided under sub-section 3 of Section 230 of the Act. K. It is also directed that the provisional accounting statement of Applicant Company No.1/Transferor Company and Applicant Company No.2/Transferee Company as on 30.09.2021 or as on a subsequent date be also circulated for the aforesaid meeting in terms of Section 232 (2) (e) of the Act. L. That the Applicant No.1/Transferor Company and Applicant No.2/Transferee Company shall publish advertisement with a gap of at least 30 clear days before the aforesaid meeting, indicating the day, date and place and the time of meeting as aforesaid, to be published in "Indian Express" (English, Chandigarh Edition) and "Jab Bani" (Punjabi, Jalandhar Edition); . It be stated in the advertisement that the copies of "Scheme", the Explanatory Statement required to be published pursuant to Section 230 to 232 of the Act. The Applicant No.1/Transferor Company and Applicant No.2/Transferee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any and Applicant No.2/Transferee Company shall furnish a copy of the Scheme free of charge within one day of any requisition for the Scheme made by any creditor or member/shareholder entitled to attend the meeting as aforesaid. R. The authorized representative of the Applicant No.1/Transferor Company and Applicant No.2/Transferee Company shall furnish an affidavit of service of notice of meeting and publication of advertisement and compliance of all directions contained herein at least a week before the proposed meeting. S. All the aforesaid directions are to be complied with strictly in accordance with the applicable laws including forms and formats contained in the Rules as well as the provisions of the Companies Act, 2013 by the Transferor Company. T. While moving the application for second motion in case the Scheme is approved in the respective meetings by the requisite majority, the applicantcompany at the time of second motion shall also file the affidavit with regard to the sectoral regulator of the applicant companies. 33. With the aforesaid directions, this First Motion Petition stands disposed of. A copy of this order be supplied to the learned counsel for the Applic ..... 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