2020 (2) TMI 1646 - Tri - Companies Law

Condonation of delay of 201 days in filing the Company Petition - unavoidable causes or not - seeking for approval of the Scheme of Amalgamation - HELD THAT - Perusal of the Application shows in paragraph '4', which is the cause / reason as pointed out by the Counsel for the Applicant for the delay in filing the Petition. However, perusal of the circumstances resulting in the delay in filing the Company Petition has failed to clearly explain the delay caused in filing of the Company Petition - the reasons given cannot be considered as unavoidable causes in filing the Company Petition. Petition dismissed.

Summary

Issues: Condonation of delay in filing Company Petition seeking approval of Scheme of Amalgamation

Analysis:
The Tribunal was approached with an Application seeking condonation of a 201-day delay in filing a Company Petition for approval of a Scheme of Amalgamation. The delay occurred despite the meetings of equity shareholders and unsecured creditors of both the Transferor and Transferee Companies being duly held, as directed, and the Chairman's reports being filed accordingly. The Application highlighted unavoidable causes for the delay, but upon review, the Tribunal found the reasons provided insufficient to justify the delay. The Tribunal noted that the reasons presented did not meet the criteria of unavoidable causes as directed by the Tribunal. Consequently, the Tribunal dismissed the Petition without imposing any costs on the Applicants.

This case primarily revolves around the issue of condonation of delay in filing a Company Petition for approval of a Scheme of Amalgamation. The key focus was on whether the reasons cited for the delay were valid and met the standard of unavoidable causes as directed by the Tribunal. The Tribunal emphasized the importance of adhering to timelines in such matters and found the reasons provided by the Applicants lacking in merit to justify the delay. Despite the meetings and reports being conducted and filed in accordance with the Tribunal's directions, the delay in filing the Company Petition was not satisfactorily explained, leading to the dismissal of the Petition.

In assessing the Application for condonation of delay, the Tribunal scrutinized the circumstances surrounding the delay in filing the Company Petition. While the meetings and reports were completed as required, the delay of 201 days was attributed to unavoidable causes. However, upon closer examination, the Tribunal determined that the reasons provided did not meet the threshold of unavoidable causes set by the Tribunal. The Tribunal's decision to dismiss the Petition without imposing costs reflects the strict adherence to procedural requirements and the expectation of timely compliance in matters of this nature.

Overall, the judgment underscores the significance of timely compliance and adherence to procedural directives in matters concerning the filing of Company Petitions for approval of amalgamation schemes. The Tribunal's decision to dismiss the Petition due to insufficient justification for the delay serves as a reminder of the importance of meeting prescribed timelines in corporate legal proceedings. By upholding the standards set by the Tribunal, the judgment reinforces the need for parties to diligently follow procedural requirements to avoid delays and ensure the efficient processing of legal matters before the Tribunal.