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2023 (1) TMI 748 - AT - Companies LawSeeking sanction of scheme - seeking a direction to dispense a Meeting of the Secured Creditors of the Appellant and for directions to convene the Meetings of the Equity Shareholders, Preference Shareholders and Unsecured Creditors of the Appellant, for the purpose of consideration of the Scheme - Section 421 of the Companies Act, 2013 - HELD THAT - This Tribunal do not find any irregularity or infirmity, in the directions passed by the Tribunal (National Company Law Tribunal). The Regional Director, is a Public Authority, looking after the interest of the Public/Shareholders/Investor at large, and if there are any observations, made by the Regional Director that there were irregularities and non-compliances that were present, it is imperative that the Company must comply with the provisions of Law, and not to violate, any Public Policy, failing which, the National Company Law Tribunal, is empowered to reject the Petition, seeking approval of the Scheme. Before the sanctioning of the Scheme, under Section 230 of the Companies Act, no action ought to be pending against the Company, by any Public Authority. The contention of the Learned Counsel for the Appellant that I.A. 2 / 2021, seeking change of date was kept pending, has also been addressed to by the Tribunal, in the impugned order and the same has not been approved or dealt with on account of the multiple objections, raised by the Regional Director and the Official Liquidator, which were not been complied with, to the subjective satisfaction of the respective Statutory Authorities. This Tribunal, does not find any ground(s), to interfere with the well-reasoned Order of the Tribunal (NCLT), especially, keeping in view that a Liberty was indeed granted to the Appellants herein, to file a Petition afresh rectifying the irregularities, pointed by the concerned Authorities - Appeal dismissed.
Issues Involved:
1. Appeal against NCLT Order dated 31.05.2022 in CP (CAA) No. 576/230/HDB/2019 connected with CA (CAA) No.986/230/HDB/2018 under Section 421 of the Companies Act, 2013. 2. Directions for convening meetings of stakeholders for consideration of the Scheme. 3. Compliance with statutory requirements for sanctioning the Scheme. 4. Observations and objections raised by Statutory Authorities - Regional Director, MCA, and Official Liquidator. 5. Liberty granted to the Appellants to rectify irregularities in the proposed Scheme. Analysis: 1. The Appeals were filed against the NCLT Order dated 31.05.2022 concerning CP (CAA) No. 576/230/HDB/2019 connected with CA (CAA) No.986/230/HDB/2018 under Section 421 of the Companies Act, 2013. The Appeals were disposed of by a common Order due to the common facts involved. 2. The Transferor Company filed petitions seeking directions for stakeholder meetings to consider the Scheme. NCLT allowed the prayers and directed the Appellant to convene meetings of Equity Shareholders and Preference Shareholders. Subsequent extensions and venue changes were also granted by NCLT. 3. After convening stakeholder meetings where the Scheme was unanimously approved, the Appellant filed for sanctioning the Scheme. However, various statutory authorities raised objections and sought clarifications. Reports were filed, and correspondence ensued. An Application was filed to modify the appointed date of the Scheme in line with NCLT Mumbai Bench's direction. 4. The Regional Director and Official Liquidator raised multiple objections regarding compliance with statutory provisions, financial statements, and valuation reports. The NCLT rejected the Scheme, granting liberty to the Appellants to rectify the deficiencies and approach afresh. 5. The Tribunal emphasized the importance of compliance with statutory requirements and public policy. It noted that no pending actions should be against the Company by any Public Authority before sanctioning the Scheme. The Appeals were dismissed at the Admission Stage, with the Appellants given liberty to file a fresh Petition rectifying the identified irregularities. This comprehensive analysis covers the issues involved in the legal judgment, detailing the proceedings, objections raised by statutory authorities, and the Tribunal's decision to dismiss the Appeals while granting liberty to rectify the deficiencies in the proposed Scheme.
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