2022 (8) TMI 233 - AT - Insolvency and Bankruptcy

Seeking to convene meeting of unsecured creditors - Section 421 of the Companies Act, 2013 - HELD THAT - The Learned PCS with the permission of this Tribunal filed Notes on Submission dated 16.06.2022, which was received on 17.06.2022 by the registry of NCLAT, Chennai. At para 18 of Page 3, it is stated that all the unsecured creditors (49) have been fully paid. From the list as enclosed and from the Notes of Submission, it is unequivocal that the unsecured creditors have been paid fully. Since the unsecured creditors have been fully paid and no other issue involved in this Appeal, therefore, this Tribunal comes to a resultant conclusion that no meeting of unsecured creditors is warranted. The direction passed by the NCLT dated 01.06.2022 with regard to convening the meeting of unsecured creditors of Appellant No.1 (Demerged Company) is dispensed with - Appeal allowed.

Summary

Issues:
- Appeal filed under Section 421 of the Companies Act, 2013 against NCLT order directing convening of unsecured creditors' meeting.
- Dispensing with meetings of equity shareholders, secured and unsecured creditors in a scheme of demerger.
- Appellant's contention of being financially sound and solvent without compromising stakeholders.
- Settlement of outstanding dues of unsecured creditors after the NCLT order.
- Tribunal's decision based on full payment to unsecured creditors and dispensing with the meeting.

Analysis:

Issue 1: The appeal challenged the NCLT order directing the convening of a meeting of unsecured creditors of the Appellant No.1 Company. The Appellant argued that the company was financially sound, solvent, and the scheme did not compromise any stakeholders. The NCLT had directed the meeting despite the company's positive net worth and solvency.

Issue 2: The Appellant cited a previous judgment and argued for dispensing with meetings of equity shareholders, secured, and unsecured creditors. The Appellant emphasized that the company had 49 unsecured creditors with a total value of Rs.1,09,49,683, and no compromise was made with any creditors.

Issue 3: The Appellant presented evidence of settling outstanding dues of unsecured creditors after the NCLT order was passed. The list of unsecured creditors showed that all 49 creditors had been fully paid, indicating the company's commitment to meeting its obligations.

Issue 4: After considering the submissions and evidence, the Tribunal found that all unsecured creditors had been fully paid. As a result, the Tribunal concluded that no meeting of unsecured creditors was necessary. The Tribunal dispensed with the direction to convene the meeting, set aside the impugned order, and allowed the Appellants to proceed with filing a petition for sanctioning the scheme.

In conclusion, the Tribunal allowed the appeal, dispensed with the meeting of unsecured creditors, set aside the NCLT order, and granted liberty to the Appellants to proceed with the scheme sanctioning process.