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TMI Blog2021 (9) TMI 1357X X X X Extracts X X X X X X X X Extracts X X X X ..... ated at 4th Floor, Dhaka House, 18/17 WEA, Karol Bagh, New Delhi-110005. 3. That M/s. Ericsson India Global Services Private Limited (hereinafter referred to as the "Transferee Company No. 2") having CIN no. U72200DL2010PTC204192 is a Private Limited company incorporated under the Erstwhile Companies Act, 1956 on 16.06.2010. The registered office of the Transferee Company No. 2 is situated at 4th Floor, Dhaka House, 18/17 WEA, Karol Bagh, New Delhi - 110005. 4. That the present Petition has been jointly filed by the Transferor and Transferee Company. Both the Transferor' and Transferee' Company together are called 'Applicant Company' hereinafter. That the Registered offices of the Companies are in Delhi and therefore, the jurisdiction lies with this Bench. 5. It is averred by the Applicant Companies that the Transferor Company is a wholly owned subsidiary of the Transferee Company. 6. It is seen from the record that the Board of Directors of Transferor Company vide have approved the proposed 'Scheme' on 14.06.2021. The Board of Directors of Transferee Company approved the scheme on 25.06.2021. 7. It is stated by the Applicant Companies that the proposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant Companies, the Applicant Companies have sought dispensation of the meeting Unsecured Creditors on the grounds mentioned in their averment as reproduced below: "28. It is the Applicant Company 1's prayer that this Hon'ble Tribunal may be pleased to pass directions for dispensing with the requirement of holding and convening a meeting of the unsecured creditors of the Applicant Company 1 to consider the Scheme, for the following reasons: (i) The unsecured creditors referred hereinabove are in the nature of sundry creditors of the Applicant Company in its day to day business, and they would be paid off in the ordinary course of business; (ii) The Scheme is in no manner prejudicial to the interests of the said unsecured creditors; (iii) In terms of the Scheme, no liability of any of the unsecured creditors of the Applicant Company 1 is proposed to be reduced or extinguished; (iv) The net-worth of the Applicant Company 1 as on January 31, 2021 Rs. 23.227 Million (Rupees Twenty Three Thousand Two Hundred Twenty Two Million Only), and the pre-amalgamation and post-amalgamation net-worth of the Applicant Company 2 as on January 31, 2021 is Rs. 33,044 Million (Rupees T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon'ble National Company Law Tribunal, Mumbai Bench, in the matter of Ness Software Services Private Limited in CA(CAA) No. 2629/MB/2019. (e) Order dated February 7, 2020 delivered by the Hon'ble National Company Law Tribunal, Mumbai Bench, in the matter of Wonder Space Properties Private Limited in CA(CAA)/4149/MB/2019. 16. That the Applicant Companies have stated that Post-amalgamation, the net worth of the Transferee Company will be more than its pre-amalgamation net-worth and, therefore, the interest of the creditors of the Transferee Company will not be adversely affected. To support its contention, the Transferee Company has annexed a copy of the Net-Worth Certificate issued by M/s. Shiv & Associates Chartered Accountants, indicating the pre-amalgamation and post-amalgamation Net Worth of the Transferee Company. The scanned copy of the said certificate is reproduced below: 17. Before adjudicating this Application on merits, we feel it necessary to visit the contents of the Additional Affidavits dated 09.08.2021 filed under Section 230(2)(a) of Companies Act, 2013 in compliance of our Order dated 09.08.2021. The scanned copy of one of the said Affidavits (the one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been considered material." Basing on the aforesaid criteria, the Applicant Companies, have declared investigations pending in the category of (a) Non-Tax Outstanding Investigations or Proceedings, and (b) Tax Outstanding Investigations or Proceedings. 22. Here, we would like to visit the contents of the Section 230(2)(a) of the Companies Act., 2013, which is reproduced below: "230. Power to compromise or make arrangements with Creditors and Members- (1)............. (2) The company or any other person, by whom an application is made under Sub-Section (1) disclose to the Tribunal by Affidavit- (a) All material facts relating to the Company, such as the latest financial position of the company, the latest auditor's report on the accounts of the company and the pendency of any investigation or proceeding against the company;" 23. From the plain reading of the contents of Section 230(2)(a), it is clear that no criteria for considering a particular event or information as material for declaration under this provision, as the one assumed by the Applicant Companies, has been prescribed under the Companies Act. Hence, we observe that despite getting an opportunity vide our o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of both the Applicant Companies is needed and cannot be evaded. Hence, it would be wrong to say that no prejudice can ever be caused to any of the creditors if the Scheme is approved without obtaining their explicit consent. 29. That the legislature under Section 230(9) of the Companies Act, 2013 has not made any exception in case of an amalgamation between a holding and a subsidiary company from filing the consent Affidavits of Creditors, nor has it given any explicit power to this Tribunal to dispense with the meeting of the creditors in absence of their consent affidavits in any circumstance. The contents of Section 230(9) of Companies Act, 2013 are reproduced below: "9) The Tribunal may dispense with calling of a meeting of creditor or class of creditors where such creditors or class of creditors, having at least ninety per cent. Value, agree and confirm, by way of affidavit, to the scheme of compromise or arrangement." 30. Here, it is worthwhile to refer to the Judgment in the matter of Nathi Devi v. Rahda Devi Gupta in Case No. Appeal (Civil) 5027 of 1999, dated 17.12.2014, wherein the Hon'ble Supreme Court observed that: "It is equally well settled that in inter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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