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TMI Blog2019 (1) TMI 1253X X X X Extracts X X X X X X X X Extracts X X X X ..... (CAA) 98/PB/2018 - - - Dated:- 17-1-2019 - MR (Rtd.) SHRI M.M. KUMAR, PRESIDENT AND MR. S.K. MOHAPATRA, MEMBER (TECHNICAL) For The Applicants : Mr. Sanjeev Puri, Senior Advocate, Mr Kamal Shankar, Mr Gyanendra Kumar, Ms Pallavi Rao, MS Nivedita Rao, Mr Pradyumna Sharma, Ms Aditi Singhvi, Ms Darshna Vyas, Mr. Tanmay Sharma, Advocates For The Respondent : : Mr Puneet Kumar (Assistant Director, DOT), Ms. Easha Kadian, Advocate for IT Dept, Ms Sonam Sharma, CP (for RD) ORDER M.M. KUMAR, PRESIDENT 1.This Joint application has been filed by the Petitioner Companies under Sections 230 to 232 or the Companies Act, 2013 read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and the National Company Law Tribunal Rules, 2016, for the purpose of the approval of the Scheme of Arrangement. The copy of the Scheme has been placed on record. The Scheme provides for: (i) the transfer by way of a demerger of the Demerged Undertaking I (as defined in the Scheme) of the Transferor Company to the Transferee Company 1, and the consequent issue of a fixed number of BAL RPS (i.e. fully paid up redeemable, non-participating, non-cumulativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red creditor namely, S2 Infotech International Limited ('Creditor Objector') raising certain disputed claims against the Transferee Company No. 1. The creditor objector has an outstanding debt of ₹ 24,67,253 out of total outstanding debt of the Transferee Company 1 amounting to ₹ 29,764.13 crores. It was submitted that the creditor objector constitutes much less than 5% of the total outstanding debt of Transferee Company No. 1 as on 31.03.2018 and as such, in terms of proviso to Section 230(4) ofthe Companies Act, 2013, he does not have the requisite locus to object to the Scheme. According to the proviso any objection could be made by persons having outstanding debt amounting to not less than 5% of total outstanding debt as per the latest audited financial statement. 5. The Regional Director has filed its representation dated 14.11.2018 and raised no objection to the approval of the Scheme. The department of Income Tax has also filed two letters dated 19.11.2018 and 05.12.2018 wherein they have given their no-objection to the Scheme as well. 6. The Department of Telecommunication (herein referred to as 'DOT') in its letter dated August 21, 2018 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usion of the judicial Proceedings in the Petition No. 10617 of 2013, pending before the Hon'ble High Court of Calcutta, if the administratively allocated spectrum beyond 2.5MHz held by M/S TTSL, in the pre-merger period, which is transferred to M/S BAL and M/S BHL, remains administratively allocated (i.e. the market determined price for such spectrum is not realized by the Department), M/S BAL and M/S BHL shall pay to the Department, the market determined price of such spectrum in respective LSAs from the date of approval of the Scheme by the Hon'ble NCLT on a pro-rata basis for the remaining period of validity of the licenses. Further, M/S BAL and M/S BHL are required to ensure that the right to use of administratively allotted access spectrum beyond 2.5MHz held by M/S TTSL, in the pre-merger period which is transferred to M/S BAL M/S BHL, shall be governed by the restricted use of Technology provisioned in the erstwhile Licenses of M/s TTSL. (f) In the event of judicial intervention in respect of the demands raised for one-time spectrum charges towards the spectrum holdings beyond 4.4MHz (GSM/2.5MHz (CDMA) of M/S BAL and M/S BHL before merger of the demerged under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he returns filed by the company notwithstanding any pending legal cases or disputes. Further, an undertaking shall be submitted by both M/S BAL and ws BHI to the effect that any demand for the pre-merger period, raised upon the merging entities (viz. ws BAL, ws BHL and M/S TTSL) shall be paid by them. However, the demands except for one-time spectrum charges of transferor and transferee companies, stayed by the Court of Law shall be subject to outcome of decision of such litigation. The OTSC shall be payable as per provisions in 3(e) 3(t) above. (k) If consequent to transfer/merger of the demerged undertakings of M/S TTSL in a service area, any of the resultant entities (viz. M/S BAL and M/S BHL) becomes Significant Market Power (SMP), then the extant rules regulations applicable to SMPs would also apply to the resultant entities. SMP in respect of access services is as defined in TRAI 's the Telecommunications Interconnect (Reference Interconnect Offer) Regulations, 2002 (2 of 2002) as amended from time to time. (l) The resultant entities (viz. M/S BAL and M/S BHL) shall submit Bank Guarantees for the deferred payment towards instalment amount of auctioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fectiveness of the Scheme of Arrangement: a) shall be transferred to BAL as a part of the Scheme of Arrangement, if such demands, liabilities or proceedings are associated with any UL/ Access Service Authorisation in Mumbai and Maharashtra circles issued to ITML; or b) shall remain the demands, liabilities or proceedings of TTML and shall not be transferred to BAL as a pat of the Scheme of Arrangement, if such liability is associated with UV ISP licenses which were previously held by TTML. At the time of oral arguments on 11.12.2018 the Assistant Director for Department of Telecommunication submitted that only mobile business is involved in the Scheme and no license transfer exercise is involved and accorded his no objection. The same fact is also recorded in the order dated 11.12.2018 passed by this Bench. 9. In the joint petition it has also been affirmed that no proceeding for inspection, inquiry or investigation under the provisions of the Companies Act, 2013 or under provisions of Companies Act, 1956 are pending against the Petitioner Companies. 10.Certificates of respective Statutory auditors of both the petitioner companies have been placed on rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c) No proceedings are pending by or against the Transferor Company in respect of Demerged Undertaking No.1 be continued by or against the Transferee Company no. 1; and ( B) WITH RESPECT TO TRANSFEROR COMPANY AND TRANSFEREE COMPANY NO. 2 a) All property, rights and powers of Demerged Undertaking no. 2 be transferred without further act or deed, to the Transferee Company no.2 and accordingly the same shall pursuant to Section 232 of the Act, be transferred to and vested in the Transferee Company no.2 for all intents, purpose and interest of the Demerged Undertaking no.2 subject never the less to all changes now affecting the same and; b) All the liabilities (if any) and duties of Demerged Undertaking no.2 be transferred without further act or deed, to the Transferee Company No. 2 and accordingly the same shall pursuant to Section 232 of the Act, be transferred to and become the liabilities and duties of the Transferee Company No. 2; and c) No proceedings are pending by or against the transferor company in respect of Demerged Undertaking No.2 be continued by or against the Transferee Company no. 2. 14. The Petitioner Companies shall within thirty Days of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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