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2018 (8) TMI 1481 - AT - Companies LawScheme of amalgamation - dispensing on aspects mentioned and directions for convening of meetings of creditors of appellant no. 3 - Held that - We have seen the Scheme of Amalgamation. Only because while filing the first motion, the appellant submitted list of Secured Creditors, we are unable to agree that merely because some of the Secured Creditors of appellant no.3, an ongoing concern have later on been paid, the Scheme as such gets changed. We find that if the learned NCLT was of the view that there is no request in the application for amendment of pleading in the first motion application, it should have in the interest of Justice given opportunity to the applicants to amend the first motion application instead of rejecting the CA. No. 384/2017 on such technical grounds. The impugned order does not show that the various documents filed by the applicants/ appellants were considered. If the impugned order is maintained, the appellants/ original applicants will be put to grave inconvenience and costs as well as delays, which is avoidable in the present set of facts. Pass the following order (i) The impugned order is quashed and set aside. The matter is remitted back to the learned NCLT. CA no. 384(PB)/ 2017 and CA(CAA)50(PB)/2017 are restored to the file of NCLT, New Delhi. (ii) The learned NCLT should give opportunity to the appellants/ applicants to include pleadings and alternative prayer in the first motion application CA(CAA) no. 50 (PB)/ 2017 requesting for dispensing with calling of meeting of Secured Creditors. (iii) The learned NCLT should give opportunity to the appellants/applicants to include pleadings and alternative prayer in CA no. 384 (PB)/2017 to request for reconvening of meeting of Secured Creditors. (iv) After the appellants/applicants are allowed to amend their pleadings, the learned NCLT should give the appellants/original applicants another opportunity of hearing and may then pass any suitable orders deemed fit.
Issues Involved:
1. Approval of Scheme of Amalgamation by Secured Creditors. 2. Validity of proxies and authorization in the meeting of Secured Creditors. 3. Dispensing with the convening of the meeting of Secured Creditors. 4. Technicality in the amendment of pleadings in the first motion application. 5. Reconvening the meeting of Secured Creditors. Detailed Analysis: 1. Approval of Scheme of Amalgamation by Secured Creditors: The appellants filed CA(CAA)50(PB)/2017 under Sections 230-232 of the Companies Act, 2013, seeking approval for a Scheme of Amalgamation. The NCLT directed meetings for Secured and Unsecured Creditors. The Unsecured Creditors approved the Scheme, but the Secured Creditors' meeting was inconclusive due to invalid proxies. The appellants later obtained consents from Secured Creditors representing over 90% of the debt value and requested the NCLT to dispense with the meeting. The NCLT dismissed this request, leading to the appeal. 2. Validity of Proxies and Authorization in the Meeting of Secured Creditors: In the meeting of Secured Creditors, 11 out of 18 were present but their proxies were deemed invalid for lack of proper authorization. The Chairperson rejected the authority letter of HDFC Bank Ltd. despite it being supported by a power of attorney. The appellants argued that this rejection was arbitrary and that the NCLT erred in not considering the affidavits and satisfaction letters provided by the Secured Creditors. 3. Dispensing with the Convening of the Meeting of Secured Creditors: The appellants filed CA no. 384(PB)/2017 to modify the order dated 01.06.2017, seeking to dispense with the meeting of Secured Creditors based on the consents obtained. The NCLT dismissed this application without considering the affidavits and satisfaction letters indicating that over 90% of the Secured Creditors approved the Scheme. The appellants argued that the NCLT should have allowed the application to avoid undue delay and hardship. 4. Technicality in the Amendment of Pleadings in the First Motion Application: The NCLT dismissed the application on the grounds that there was no request to amend the pleadings in the first motion application. The appellants contended that this was a technical approach and that the NCLT should have provided an opportunity to amend the application. The appellate tribunal agreed, stating that the appellants should not be sent back to square one for such a technicality. 5. Reconvening the Meeting of Secured Creditors: The appellants requested either to dispense with the meeting or to reconvene it. The NCLT's refusal to consider the consents and satisfaction letters led to the appeal. The appellate tribunal noted that another NCLT bench had reconvened a meeting in a similar case and that the NCLT should have considered this option. Conclusion and Order: The appellate tribunal quashed the impugned order and remitted the matter back to the NCLT, directing it to: (i) Restore CA no. 384(PB)/2017 and CA(CAA)50(PB)/2017 to its file. (ii) Allow the appellants to amend their pleadings in the first motion application to request dispensing with the meeting of Secured Creditors. (iii) Permit the appellants to include an alternative prayer in CA no. 384(PB)/2017 for reconvening the meeting of Secured Creditors. (iv) Provide the appellants another opportunity for a hearing and pass suitable orders thereafter.
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