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TMI Blog2024 (11) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... ors of the Appellant under a Scheme of Arrangement with Respondent No.2 where the appellant is the Original Transferee Company and Respondent No.2 is the Original Transferor Company, to take the employees of the ATM and Cash Management Division of Respondent No.2 as the appellant's employees. 2. Respondent No.2 has its registered office in Delhi and is the wholly owned subsidiary of the Appellant having its registered office in Mumbai. It is alleged the transferor entered into a Scheme of Arrangement with the Appellant for demerger of ATM and Cash Management Division of the Transferor Company to the Transferee Company for the purposes of operational synergy and facilitating sharing of financial resources. The scheme was approved by the High Court of Judicature at Bombay on 25th October, 2010 in Company Scheme Petition No.306/2010, and thereafter also approved by the High Court of Delhi by way of order dated 17th January, 2011 in Company Scheme Petition No.311 of 2010. 3. As per the terms of the Scheme, the appointed date was 1st April, 2009 and the Effective Date was 1st April, 2011. 4. The Respondent No.1 filed MA No.560/2016 in CP (CAA) No.306/MB/2010 alleging the Respondent N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transferred to an vested in CMS Info Systems as a going concern, so as to become as and from the Appointed Date, the estate, assets, rights title, interest and authorities of CMS Info Systems, pursuant to Section 394(2) of the Act and any other relevant provision of the Act and order of the Hon'ble High Courts sanctioning the Scheme, subject, however, to subsisting charges, if any. 6. Any and all existing contracts, (including customer contracts)' deeds' bonds' insurance policies, agreement, vehicle registrations, Iicenses' permissions' certification, lease arrangements, lease & license agreements, engagements and other instruments. if any, of *whatsoever nature relating to the ATM and Cash Management Division and to which'. CMS Securitas is party or to the benefit of which CMS Securitas may be eligible and subsisting or having effect on 'the Effective Date, shall remain in full force and effect against or in favour of CMS Info Systems, as the case may be, and may be enforced by or against CMS Info Systems as fully and effectually as if, instead of CMS Securitas, CMS Info Systems had been a party or beneficiary or oblige thereto, without any further a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent No.1 was informed of demerger that had taken place in accordance with the Scheme. Pursuant to the meetings, the concerns of the members of Respondent No.1 were duly addressed to and thereafter no further communications was ever received from Respondent No.1 in this regard. It was argued pursuant to several meetings held between July 2011 to August, 2011, specifically in a meeting held on 4th August, 2011 with the representatives of Respondent No.1, complete details of the demerger Scheme were provided. Further on 05.08.2011 a notice was issued to Respondent No.1 by Respondent No.2, duly acknowledged by Respondent No.1 on 18.08.2011, qua the implementation of the Scheme and transfer of some of the employees of Respondent No.2 to the Appellant. (See Page 19, Annexure 1 to the Rejoinder). Admittedly the appellant made a disclosure of the Scheme in its Annual Report dated 29th September, 2011 for the year ending 31.03.2011. 10. The records would show the Respondent No.1 had expressly accepted and acquiesced to the implementation of the Scheme and transfer of 45 employees of Respondent No.2 as identified and the Respondent No.1 had signed and executed number of agreements/settlem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such as increment as per the slabs mentioned under the agreement, one-time ex-gratia amount of INR 18,000/-, additional increment of INR 3,600/- per month, among other benefits. Similarly, under the Memorandum of Understanding dated 17 April 2015, the employees who were part of the Respondent No.1 Union interalia derived benefits such as onetime ex-gratia amount of INR 18,000/- paid in the month of April 2015 by the Respondent No. 2, Slab-wise 4 increment as provided under the agreement, ad-hoc increment of INR 4,500/- per month, increase of additional non-financial allowances as mentioned in the agreement, one-time payment of INR 6,000/- per workman. 13. At all relevant times, the Respondent No. 1 Union was fully aware of the Scheme, its implementation and who were the employees who had been taken on by the Appellant under and pursuant to the Scheme. 14. Further it is relevant to note Clause 7.1 of the Scheme which provide all such staff, employees and workmen of the Transferor company as identified by its Board of Directors and who are in service on the effective date shall be deemed to have become staff, workmen and employees of the transferee company with effect from the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MA, the Respondent No.1 itself challenged the Closure Notice before the Industrial Tribunal and sought reinstatement of their employees into the Transferor company with full back wages. It is imperative to mention in a complaint filed by the Respondent No.1 Union before the Industrial Court Mumbai on 1.1.2016 against Respondent No.2, the members of the Respondent No.1 had acknowledged the transferor company is their employer (See Page 1749 at Volume VIII). 19. The conduct of the Respondent No.1 union thus show it was aware of the demerger and after its letter dated 13.4.2011, various meetings were held with its office bearers and it never challenged the demerger at any stage and rather went for implementation of the scheme by moving an application. It is interesting to note all these communications and MOUs were signed by Bhai Jagtap on behalf of Respondent No.1 and hence right from beginning R1 Union were involved at every stage and now cannot allege it was not aware what was going on in the company. 20. Thus to say Clause 7.1 of the Scheme contemplate the transfer of all the workmen of ATM and Cash Management Division of the transferor company to the transferee company is enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons with the transferor company. 24. The facts reveal under the garb of interpreting the Scheme the Respondent No.1 is seeking a modification of the Scheme which in fact is impermissible. By way of the impugned order, the Ld. NCLT had rather modified the express terms of the Scheme and had erroneously directed the Board of Directors to take the employees of ATM and Cash Management Division of Respondent No.2 as on appointed date provided such employees also continue to remain in employment on the effective date. Clause 7.1 of the Scheme only talks of the employees who were in service as on effective date, i.e. 1.4.2011, were to be covered under the Scheme whereas the import of para 8.5 of the impugned order requires an employee to be in the service on appointed Date i.e. 1.4.2009 and remain in service as of Effective Date. 25. The Respondent No. 1 Union's misplaced reliance and self-serving interpretation of the affidavit of the Regional Director, Western Region, Ministry of Corporate Affairs after about 5 years of implementation of scheme is nothing but a speculative counter blast to the closure notice by the Respondent No. 2 company. Without prejudice to the same, the affidavit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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