2022 (3) TMI 988 - Tri - Insolvency and Bankruptcy

Approval of scheme of amalgamation - Condonation of delay under Regulation 2B of Insolvency and Bankruptcy Board of India (Liquidation Process), Regulation, 2016 - time limit under this specified regulation of 90 days has already been expired - Seeking dispensation with convening separate meeting of the Creditors of the Corporate Debtor - approval of Scheme of Compromise or Arrangement for merger of the Corporate Debtor - dissolution of the Corporate Debtor under Section 54 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - On a bare perusal of the provisions of Section 54, it is clear that both the prayers (b) and (c) cannot be granted by way of filing one application and therefore the present application cannot be entertained under Section 54 of the Code. However, the applicant is at liberty to file separate applications for approval of the scheme of Compromise or arrangement for merger with the reasons for delay in filling the application and for Dispensing with convening separate meeting of the Creditors. If the scheme of Merger is approved by the Bench then another application may be filed for Dissolution of the Corporate Debtor complying the conditions laid down under the provisions of companies Act, 2013, stating therein that the assets of the Corporate Debtor has been completely liquidated. Application disposed off.

Summary

Issues:
Application under Section 54 of the Insolvency & Bankruptcy Code, 2016 seeking condonation of delay, approval of scheme of merger, dispensation of separate creditors' meeting, and dissolution of the corporate debtor.

Analysis:
The applicant filed an application under Section 54 of the Insolvency & Bankruptcy Code, 2016, seeking various reliefs. The prayers included approval of condonation of delay, dispensation of separate creditors' meeting, approval of scheme of compromise or arrangement for merger, and dissolution of the corporate debtor. However, the Tribunal noted that the prayers regarding the merger scheme and dispensation of creditors' meeting did not fall within the scope of Section 54 or Regulation 2B of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. Section 54 deals with the dissolution of the corporate debtor upon complete liquidation of assets, while Regulation 2B pertains to compromise or arrangement under the Companies Act, 2013.

The Tribunal highlighted that the prayers for merger scheme approval and creditors' meeting dispensation required separate applications. The applicant was advised to file distinct applications for each relief sought. If the merger scheme is approved, a separate application for dissolution of the corporate debtor can be filed, ensuring compliance with the Companies Act, 2013, by stating the complete liquidation of the corporate debtor's assets. Therefore, the Tribunal disposed of the present application, IA 1474/ND/2021, with these observations, allowing the applicant to pursue the appropriate course of action as per the legal provisions.

In conclusion, the Tribunal clarified that the applicant's prayers for merger scheme approval and dispensation of creditors' meeting could not be granted under Section 54 of the Code. Separate applications were deemed necessary for each relief sought, with the applicant directed to comply with the relevant legal requirements for the dissolution of the corporate debtor if the merger scheme is approved. The Tribunal's decision emphasized the importance of following the prescribed procedures and provisions of the law in insolvency and liquidation matters.