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TMI Blog2020 (12) TMI 1312X X X X Extracts X X X X X X X X Extracts X X X X ..... verments made in the application as well as the documents annexed hereto. 3. 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 is a natural consequence of the First Scheme (defined under Part II of the said Scheme) that SEFL has proposed with its creditors who are banks and financial institutions, which is pending as of now before this Hon'ble Tribunal. The present Scheme together with the First Scheme will help SEFL to protect the interests of both the creditors covered under the First Scheme and the Creditors covered under the said Scheme in order to achieve the required harmony and synergy among those creditors for maintaining SEFL as a going concern. ii. The said Scheme will create an opportunity for SEFL and its creditors covered under the said Scheme to efficiently deal with asset liability mismatch of SEFL caused due to the economic downturn on account of the pandemic created by COVID 19 and the RBI August Circulars (as defined in Part II of the said Scheme) on mutually agreed terms. iii. The said Scheme will enable SEFL to, inter alia, focus on oper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2020, to inter alia extend the period of moratorium to 31 August, 2020. 5. The issuance of the abovementioned circulars granting moratorium by RBI was to ameliorate the severe effects of the COVID-19 on the borrowers. However, 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 6 August, 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 Rs. 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. 6. The Learned Senior Counsel further submits that on the same day, i.e., 6 August, 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 one-time restructuring of their borrowings with banks and NBFCs ("Second 6 August Circular" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore this Hon'ble Tribunal for implementation of the said Scheme. 11. The 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. 12. 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. 13. The Scheme embodies arrangement between SEFL, and its Creditors covered under Part III of the said Scheme and as specifically provided under Schedules I, II, III, IV, V and VI therein and also annexed to the Application. 14. The Scheme proposes arrangement with 6 (six) types of creditors of the Applicant Company i.e. (i) the Secured Debenture Holders; (ii) the Unsecured Debenture Holders; (iii) the Secured ECB Lenders; (iv) Unsecured ECB Lenders; (v) PDI Holders; and (vi) Individual Debenture Holders more fully dealt under Part II and Part III of the Scheme and hence separate meetings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng on a pan India basis, it is facing operational issues and also the collections from the borrowers have been impacted. The Company, therefore, needs an orderly cash flow management and collections to take care of the interests of the Creditors. 19. Pursuant to the powers conferred under Section 230 of the Companies Act, 2013 read with Rule 11 of the National Company Law Tribunal Rules, 2016 and considering the overall plight of the NBFC Sector and further considering that the Applicant Company is a significant player in the non- banking financial sector and on whom several borrowers are dependent for their business and also considering that any coercive action by any lender on the Applicant Company may further prejudice the 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. The Learned Counsel relies on order dated 15 October 2018 of Hon'ble National Appellate Company Law Tribunal in Union of India vs. Infrastructure Leasing and Financial Services Limited & Ors; Order of the Hon'ble Supreme Court of India in The Income Tax Officer, Cannanore Vs. M.K. Mohammed Kunhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Debenture Holders and/or the Individual Debenture Holders themselves (only in the absence of a representative debenture trustee) of the Applicant Company be held at "The Westin", International Financial Hub, CBD/II Action Area II, New Town, Kolkata 700156 on Saturday, 24th July, 2021 at 2:30 PM for the purpose of their considering, and if thought fit, approving, with or without modification, the said Scheme of Arrangement. 7. No meeting of the Equity Shareholders of the Applicant Company is required to be held. 8. That at least 30 (thirty) clear days before the said meetings to be held as aforesaid, an advertisement convening the same indicating the day, date, time and the venue of the said meetings and stating that copies of the said Scheme of Arrangement along with the statement required to be furnished pursuant to Section 230(3) of the Companies Act, 2013 disclosing necessary details and a prescribed form of proxy can be obtained free of charge at the registered office of the Applicant be inserted once each in the "Financial Express" in English and "Aajkal" in Bengali as per the requirements of Section 230 of the Companies Act, 2013 in Form No. CAA2 of the Companies (Compro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 with necessary variations, incorporating the directions herein. 11. That the quorum for each of the said meetings of the concerned Creditors of the Applicant Company covered under the Scheme shall be fixed in accordance with Section 103 of the Companies Act, 2013 present either in person or by proxy. 12. It is however provided that in case the quorum of the meeting is not available on the scheduled time and date or in the event of apparent absence of consensus or unanimity between the participating Creditors which may render a meeting futile or upon the request of the majority of the participating Creditors, the concerned Chairperson may adjourn such meeting to any date/time and take a decision on the quorum for the adjourned meeting. 13. Mr. Shaunak Mitra, Advocate, is appointed as the Chairperson of the said meeting of Secured Debenture Holders including the representative Debenture Trustees, as aforesaid, wherever applicable, as the case may be of the Applicant Company to be held as aforesaid in terms of this order. The Chairperson shall be paid a consolidated sum of Rs. 75,000/-( Rupees Seventy Five Thousand Only) for conducting the aforesaid meeting as Chairperson. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resolution for approval of the Scheme by casting their votes personally or by proxy at the venue of the meeting. 22. Parallelly along with physical meetings, the Company shall have the option to provide a virtual meeting and online polling/e-voting platform to its concerned Creditors via video conferencing or other audio visual mode (VC/OAVM), on the same day, date and time as directed for the respective physical meetings for the purpose of considering and if thought fit, approving, with or without modification, the said Scheme of Arrangement. 23. If such option of virtual meeting is provided by SEFL to its concerned Creditors, the presence of those Creditors of SEFL attending such meeting virtually shall be permitted to be recorded by the Chairperson in the minutes of the meetings and shall be considered for the purposes of quorum and the votes cast by those Creditors through online polling/e-voting shall be counted along with those votes cast at the physical meeting for the purpose of declaration of results of the meeting. 24. Proxies shall be allowed only in case of physical meeting. No proxies shall be allowed for those Creditor attending the meeting virtually in case su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciding procedural questions that may arise at the meeting or at any adjournment thereof or any other matter, including an amendment to the Scheme, if any proposed by any person(s). 31. The votes cast at the said respective meetings shall be scrutinized by the Scrutinizer. The Scrutinizer 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 Scrutinizer to him. 32. The value of each Creditor under the Scheme shall be in accordance with the respective books of the Applicant and, where entries in the books are disputed, the Chairperson shall determine the value for the purpose of the meeting. The value of the creditors shall be considered as per the respective Schedules I, II, III, IV, V and VI provided in the Scheme for the said purpose. 33. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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