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TMI Blog2020 (2) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... f course, the court has to see to the bona fides of the scheme and to ensure that what is put forward is not a ruse to dispose of the assets of the company in liquidation. In the present case, the Scheme as a whole is just, fair and reasonable. There is no violation of any statutory provisions. It is in the interest of justice that the Scheme is approved subject to supervision of this court through a retired Judge of this Court. The scheme is approved - application allowed. - Co. A. No. 509/2018 in CO.PET. 885/2015 - - - Dated:- 27-1-2020 - MR. JAYANT NATH J. Present: Mr.Shailendra Singh, Adv. for Vigneshwara Victim Welfare Association. Mr. Shashwat Jain and Mr. Sandeep Phogat, Advs. in CP 885/2015. Mr. Arunav Patnaik and Mr. Shikhar Saha, Advs. for Objectors- Mr. S.M. Puri. Ms. Anju Jain Advocate for Vingeshwara Barter Investors Association. Mr. Najimuddin Ahmed, Adv. for the applicant. Mr. R.K. Gupta, Adv. for the objector-Vipin Gupta HUF and Mr. Nitin Gupta, HUF. Mr. Abhishek Saket, Mr. Shahana Farah, Mr. Rahul Dubey and Mr. Chitral Gambhir, Advs. in CP 885/2015 Mr. Siddhant Tripathi, Mr. Abhinav Mishra, Ms. Nivedita Chauhan and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion with various proceedings said to have been initiated by unsecured creditors of the various companies. 3. It is pleaded that the two companies do not have any secured creditors. A copy of the certificate of the Chartered Accountant has been placed on record. Last audited balance-sheets of the two companies for the year 31.3.2013 have also been enclosed. The class of unsecured creditors to whom the revival scheme is applicable have also been enclosed as Annexure J. 4. I may only note that after judgment was reserved and delivery of the present judgment was pending, NCLT passed an order on 10.10.2019 appointing an Interim Resolution Professional and declared a moratorium under section 14 of the IBC. The propounders of the Scheme filed a Writ Petition before this court titled Sunil Kumar Dahiya vs. Union of India being W.P.(C)11706/2019. This Court disposed of the petition on 8.11.2019 noting that this court is seized of the revival of the company stayed the operation of the order dated 10.10.2019 of NCLT until pronouncement of the judgment of this court or until the matter is decided by NCLAT. NCLAT was requested to consider the matter including the orders passed by the Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to file his response. 8. I may first have a close look at the scheme filed. The scheme clarifies that there are two pending projects of the company. The first is iValley Business Project which is under the name and style of Darson Kisson iValley Business Park at Plot No.CP 02, Sector 8, Manesar, Gurgoan which has about 10 acres land and was launched in 2007 for development of a Technology Park on Campus Development Norms. It is stated that Vigneshwara Developers Pvt. Ltd. has free hold marketable interest for 38,212 sq. metres as per HSIIDC Norms. Construction in the project was commenced and construction of Tower-C (Venus Tower) and Tower B-I and Tower B-II to the extent of 75% and 65% are respectively complete. The remaining towers have been constructed up to the ground floor level. A three level basement parking for the entire 10 acres stands completed. The company still has approximately 6 lakhs sq. ft. of the unsold inventory in the said project which can further go up to another 4 lakhs sq. ft. with approval of HSIIDC on account of potential increase in FAR. Second Project is Aquarius Project through the promoters of Vighneshwara Develop Well Pvt. Ltd. who controls the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wers B-I and B-II and the area as agreed in Tower-A in accordance with applicable laws. The promoters will obtain necessary approvals with regard to construction at their own cost. The promoters shall at their own cost and expense obtain water, sewerage and electricity permission and connections. 12. Similarly, the Vighneshwara Victims Welfare Association Allottees have elected their settlement amount to be determined as per Formula Category-2. As full and final settlement of the said allottees, the promoters have agreed to hand over tower marked as Media Max in Aquarius project to be developed in the proposed drawings of Aquarius Cyber Park I as described in the scheme. The promoters will get the drawings of the tower of G+22 approved from the competent authorities. The tower once completed will comprise 5,99,000 sq. ft. The cost of construction will be borne by the allottees. They may enter into a collaboration with any developer for the purpose of developing Media Max Tower. Promoters will apply for renewal of the license and will make best endeavour to get the approval within 90 days of the sanction of the scheme. The promoters shall also pay stamp duty and get the property/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised. (c) There are various miscellaneous permissions which are also required for the purpose of revival of the project like charges to be paid to the authorities of which there are no details. (d) It is stated that as per the settlement, one acre of land was agreed to be given to the objecting association. However, it is stated that this has no relevance if the applicant companies do not complete the project as the power given to the association has a major percentage of area which can be built as a part of the entire project and not on a stand alone basis. (e) It is further stated that the Ex.Directors have purchased assets in the name of other group companies by using investors fund. The OL should take over all the assets of the said companies and utilise them to fulfil the commitments as per agreements. The list of 19 such companies has been filed alongwith the objections. (f) It is stated that false calculations of the projects have been given in paragraph D of the scheme. (g) It is further stated that the aforesaid companies have promoters/Ex.Directors who have failed to disclose any concrete and reliable source of funds till date on the basis of whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, pursuant to which there is grave risk that they will abscond. (e) It is stated that the scheme contemplates disposal of the bartered properties which are owned by entities affiliated with the promoters for financing the revival scheme. The objectors herein are pursuing the cases for cancellation of sale of the bartered properties. Hence, the Scheme is not bona fide. Their group companies constitute separate legal entities and their assets cannot be illegally brought within the purview of the winding up proceedings. (f) It is stated that the scheme assumes that all statutory authorities will grant the required clearances for the projects to be developed. It is pointed out that the license for the Aquarious projects issued by DTCP, Government of Haryana has expired. The Developers have been blacklisted by the Department. Similarly, in relation to ivalliy Project, over 10 years have elapsed and the project has not been completed. Hence, it may not be possible for the promoters to seek any further extension of time to execute the project. (g) It is further stated that the approvals from statutory/regulatory authorities will require prior sanction of such authorities as wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a class of creditors within section 391 of the Companies Act, 1956. This is so as they can be said to be a homogenous group with commonality of interest. The allottees are to be given space/unencumbered space in the semi-built/un-built areas. The construction is to be completed by one of the three named associations, namely, the Investors Sangharsh Samiti, Vighneshwara Victims Welfare Association and Vighneshwara Barter Investors Association. Those of the allottees who are not associated with any of the associations have the option of joining any of these associations. These associations have been given a right to enter into collaboration agreements and complete the construction. 25. The majority of objections centre around three facets. Firstly, mobilisation of funds, namely, as to whether the promoters would be in a position to mobilise funds to be able to get necessary statutory permissions/permission from DTCP, HSIIDC, etc. The second lot of objections is that the Scheme is nothing but a fraud by the promoters to try and get released from their present detention in judicial custody on the plea that the court has approved a revival scheme. Thirdly, it was stressed that the Schem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roject and approximately 19.5 lac sq.ft. in Aquarius project. Some amount of cash is lying deposited in various accounts. Though it is probable that the full amount as claimed by the promoters of the Scheme may not be fully available to the promoters of the Scheme. However, in my opinion, once the Scheme is approved by the Court the propounders may be in a position to mobilise resources based on unsold inventory and to generate funds. I also cannot help noticing that out of 1437 allottees 1180 allottees have agreed to the Scheme voluntarily before the Delhi High Court Mediation and Conciliation Centre. As noted by the Supreme Court in Meghal Homes (P) Ltd. Vs. Shree Niwas Girni K.K.Samiti and Ors., (2007) 7 SCC 753 this court is not to sit in appeal over the commercial wisdom of the majority of class of persons who with their open eyes have given their approval to the Scheme. I hence reject the contention about the revival scheme being bereft of any chance of success in the absence of any proved financial capacity of the propounders of the Scheme. 29. The next plea raised is that the Scheme is nothing but a facade by the promoters to try and get themselves released from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent company before the Delhi High Court Mediation and Conciliation Centre. Now, having entered into a settlement, at this stage, in my opinion, the said Association cannot be allowed to resile from their settlement agreement especially as nothing has changed since signing of the Settlement Agreement. The members of the Associations cannot be permitted walk out from the settlements entered into before the Delhi High Court Mediation and Conciliation Centre without any rhyme or reason. 34. Another objection has been filed by Wellone Wash and Clean Services Private Limited. It is their case that they are creditors of the company Vigneshwara Developwell Private Limited. However, they do not find any place in the Scheme of Settlement. A perusal of the Scheme would show that it is dealing with the allottees. As noted above, under section 391 of the Companies Act, allottees can constitute a class of creditors in terms of Section 391 of the Companies Act. As the said objectors, named, do not find place in the Scheme it is manifest that the Scheme does not cover the said objector and the settlement of their dues would take place in the normal course as per law after revival of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 91 of the Act is placed before the Court by the applicant concerned seeking sanction for such a scheme and the Court gets satisfied about the same. 6. That the proposed scheme of compromise and arrangement is not found to be violative of any provision of law and is not contrary to public policy. For ascertaining the real purpose underlying the scheme with a view to be satisfied on this aspect, the Court, if necessary, can pierce the veil of apparent corporate purpose underlying the scheme and can judiciously x-ray the same. 7. That the Company Court has also to satisfy itself that members or class of members or creditors or class of creditors, as the case may be, were acting bona fide and in good faith and were not coercing the minority in order to promote any interest adverse to that of the latter comprising the same class whom they purported to represent. 8. That the scheme as a whole is also found to be just, fair and reasonable from the point of view of prudent men of business taking a commercial decision beneficial to the class represented by them for whom the scheme is meant. 9. Once the aforesaid broad parameters about the requirements of a scheme for get ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 529A of the Act. Of course, the court has to see to the bona fides of the scheme and to ensure that what is put forward is not a ruse to dispose of the assets of the company in liquidation. 37. Similarly, in Modiluft Limited vs. S.K.Modi, 2005 (123) DLT 413 , a co-ordinate Bench of this court held as follows:- 40. I do not find that the scheme is inherently incapable of performance and unworkable. I would take note of some of the case law cited at the Bar, which would throw light on the approach to be adopted in such cases. 41. Dealing with such aspects, the Gujarat High Court (speaking through D.A. Desai, J. as His Lordship then was) and considering the matter in all its length and breadth in re. Maneckchowk and Ahmedabad Manufacturing Co. Ltd. reported (1970) 40 Comp. Cas. 819 made the following observations which would equally apply to the present fact situation: Even at the cost of repetition, it must be mentioned that the scheme is opposed by a very few creditors and an infinitesimally small number of shareholders. The fact that the scheme has been approved by a requisite majority of shareholders is undoubtedly a strong argument in its favour, unless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dealing in re. Hoare Co., Ltd, I think that the scheme must be obviously unfair, patently unfair, unfair to the meanest intelligence. I do not think that merely finding items in the scheme or details of the scheme which are open to valid criticism is enough. A scheme can be effective to bind a dissenting shareholder without complying to the extent of one hundred per cent, with the highest possible standards of fairness, equity and reason. After all, a man may have an offer made to him and, although he likes something better, may be prepared to accept it, because it is good enough in all the circumstances. It may well be that the grounds for criticizing the present scheme are not grounds of such a nature as to render the whole thing unfair in the sense intended by MAUGHAM, J., in re. Hoare Co. Ltd. Where the statutory majority has accepted the offer the onus must rest on the applicant to satisfy the Court that the price offered is unfair. I have some information about the present share values. I have no information about what the present value of Sussex Brick Co. Ltd.'s shares is because they are no longer quoted, but there is no doubt that three shares in that company w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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