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TMI Blog2020 (8) TMI 490X X X X Extracts X X X X X X X X Extracts X X X X ..... tor(s), the Liquidator on behalf of the company will move an application under Section 230 of the Companies Act, 2013 before the Adjudicating Authority i.e. National Company Law Tribunal, Chennai Bench. The present Appeal is disposed off in terms of the directions as noticed in the matter of Y. Shivram Prasad Vs. S. Dhanapal Ors. - Company Appeal (AT) (Insolvency) No. 947 of 2019 - - - Dated:- 6-2-2020 - [Justice A.I.S. Cheema] Member (Judicial) , [Justice Anant Bijay Singh] Member (Judicial) And (Kanthi Narahari) Member(Technical) For the Appellant : Mr. V. Dcosta, Advocate For the Respondents : Mr. P.B.A. Srinivasan, Mr. Avinash Mohapatra and Ms. Ichchha, Advocates ORDER This Appeal has been filed by the Promotor/Executive Director of the Corporate Debtor M/s SSMP Industries Ltd. The Appeal was filed against the order of liquidation passed by the Adjudicating Authority (National Company Law Tribunal, Bench-III, New Delhi on 31.07.2019. 2. Learned Counsel for the Appellant submits that the liquidation value of the Company is ₹ 1.5 Crores but the Corporate Debtor, being Micro, Small and Medium Enterprises (in short MSME ), the Appellant m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lorMittal (supra) at paragraph 83, footnote 3]. (Emphasis added) 12. It can thus be seen that the primary focus of the legislation is to ensure revival and continuation of the corporate debtor by protecting the corporate debtor from its own management and from a corporate death by liquidation. The Code is thus a beneficial legislation which puts the corporate debtor back on its feet, not being a mere recovery legislation for creditors. The interests of the corporate debtor have, therefore, been bifurcated and separated from that of its promoters /those who are in management. Thus, the resolution process is not adversarial to the corporate debtor but, in fact, protective of its interests. The moratorium imposed by Section 14 is in the interest of the corporate debtor itself, thereby preserving the assets of the corporate debtor during the resolution process. The timelines within which the resolution process is to take place again protects the corporate debtor s assets from further dilution, and also protects all its creditors and workers by seeing that the resolution process goes through as fast as possible so that another management can, through its entrepreneurial skills, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the company or of any creditor or member of the company, or in the case of a company which is being wound up, of the liquidator appointed under this Act or under the Insolvency and Bankruptcy Code, 2016 as the case may be, order a meeting of the creditors or class of creditors, or of the members or class of members, as the case may be, to be called, held and conducted in such manner as the Tribunal directs. Explanation.- For the purposes of this sub-section, arrangement includes a reorganisation of the company s share capital by the consolidation of shares of different classes or by the division of shares into shares of different classes, or by both of those methods. (2) The company or any other person, by whom an application is made under subsection (1), shall disclose to the by affidavit- (a) all material facts relating to the company, such as the latest financial position of the company, the latest auditor s report on the accounts of the company and the pendency of any investigation or proceedings against the company; (b) reduction of share capital of the company, if any, included in the compromise or arrangement; (c) any scheme of corporate debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons to whom the notice is sent may vote in the meeting either themselves or through proxies or by postal ballot to the adoption of the compromise or arrangement within one month from the date of receipt of such notice: Provided that any objection to the compromise or arrangement shall be made only by persons holding not less than ten per cent. of the shareholding or having outstanding debt amounting to not less than five per cent. of the total outstanding debt as per the latest audited financial statement. (5) A notice under sub-section (3) along with all the documents in such form as may be prescribed shall also be sent to the Central Government, the income-tax authorities, the Reserve Bank of India, the Securities and Exchange Board, the Registrar, the respective stock exchanges, the Official Liquidator, the Competition Commission of India established under sub-section (1)of section 7 of the Competition Act, 2002, if necessary, and such other sectoral regulators or authorities which are likely to be affected by the compromise or arrangement and shall require that representations, if any, to be made by them shall be made within a period of thirty days from the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... days of the receipt of the order. (9) The Tribunal may dispense with calling of a meeting of creditor or class of creditors where such creditors or class of creditors, having at least ninety per cent. value, agree and confirm, by way of affidavit, to the scheme of compromise or arrangement. (10) No compromise or arrangement in respect of any buy-back of securities under this section shall be sanctioned by the Tribunal unless such buy-back is in accordance with the provisions of section 68. (11) Any compromise or arrangement may include takeover offer made in such manner as may be prescribed: Provided that in case of listed companies, takeover offer shall be as per the regulations framed by the Securities and Exchange Board. (12) An aggrieved party may make an application to the Tribunal in the event of any grievances with respect to the takeover offer of companies other than listed companies in such manner as may be prescribed and the Tribunal may, on application, pass such order as it may deem fit. Explanation.-For the removal of doubts, it is hereby declared that the provisions of section 66 shall not apply to the reduction of share capital effected in pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Companies Act, 2013. 17. Normally, the total period for liquidation is to be completed preferably within two years. Therefore, in S.C. Sekaran v. Amit Gupta Ors. (Supra), this Appellate Tribunal allowed 90 days time to take steps under Section 230 of the Companies Act, 2013. In case, for any reason the liquidation process under Section 230 takes more time, it is open to the Adjudicating Authority (Tribunal) to extend the period if there is a chance of approval of arrangement of the scheme. 18. During proceeding under Section 230, if any, objection is raised, it is open to the Adjudicating Authority (National Company Law Tribunal) which has power to pass order under Section 230 to overrule the objections, if the arrangement and scheme is beneficial for revival of the Corporate Debtor (Company). While passing such order, the Adjudicating Authority is to play dual role, one as the Adjudicating Authority in the matter of liquidation and other as a Tribunal for passing order under Section 230 of the Companies Act, 2013. As the liquidation so taken up under the I B Code , the arrangement of scheme should be in consonance with the statement and object of the I B C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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