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TMI Blog2020 (9) TMI 1003X X X X Extracts X X X X X X X X Extracts X X X X ..... t meetings of its Operational Creditors. 2. IA 904/MB.IV/2020 2.1. This IA is an application filed by the Applicant/ICICI Bank Limited seeking to intervene in CA (CAA) No.401/MB.IV/2020, and to reject the said CA. It is the case of the Applicants herein that the Company Application - (a) Is not in conformity with the statutory requirements of section 230(2)(a) and (c), inasmuch as the proposed Scheme has not been consented to by 75% of the Secured Creditors; (b) The Creditors Responsibility Statement is not attached to the CA; (c) There is no statement made in the CA with regard to safeguards for protection of other secured and unsecured creditors; (d) The report by the auditor that the fund requirements of the company after the Corporate Debt Restructuring (CDR) as approved shall conform to the liquidity test based upon the estimates provided to them by the Board of Directors of the company, is not attached; (e) The requisite statement that the company proposes to adopt the CDR guidelines specified by the Reserve Bank of India (RBI); (f) Valuation report in respect of the shares and the property by a registered valuer is not attached; and (g) The terms of the Schem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and also circulate a revised Scheme removing all references to the applicability of the Scheme to the Financial Creditors. This was agreed to by Mr Santosh Paul. 2.7. Accordingly, an affidavit was filed by the Respondent Company wherein it has inter alia been stated that the Scheme filed by the Respondent Company is meant only for arrangement with the operational creditors so that the Respondent Company can pay off its debts to them, and the same will not affect the financial creditors. The revised affidavit has also been served on the Applicant Bank, which has accepted the same. 2.8. Considering the submissions made by both sides, and upon perusal of the revised affidavit dated 23.07.2020 filed by the Respondent Company, it is hereby ordered as follows: - (a) The Scheme filed by the Respondent Company shall apply only to the Operational Creditors (as defined under the Insolvency and Bankruptcy Code, 2016) and not to its Financial Creditors. (b) The Respondent Company shall identify clauses in the existing Scheme that casts a shadow on the Financial Creditors of the Company, and remove the same. Therefore, the revised Scheme shall be circulated to all stakeholders to enable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny Secretary, requesting him to bring to the attention of this Tribunal the pendency of IA No.904/MB.IV/2020. Copy of the said email is placed on record as Exhibit 'C' to the IA. (c) Mr Vijay Tiwari, Practising Company Secretary and Authorised Representative of the Respondent Company, sent a reply to the said email on the same day, i.e., 13.05.2020 at 9.33 AM, "I called you sir." To this, there is a response from Mr Bimal Rajasekhar, learned Counsel for the Applicant Bank, thanking Mr Vijay Tiwari for the call. He once again requested Mr Vijay Tiwari to inform the Bench of the pending MA (sic IA). However, Mr Vijay Tiwari failed to inform the Bench about the pending IA. On 13.05.2020, the Bench posted the matter for hearing to 02.07.2020. (d) The Respondent Company filed IA No.994/MB.IV/2020 for urgent hearing of CA (CAA) No.401/MB.IV/2020. Therefore, the matter was posted for hearing on 12.06.2020. (e) On 12.06.2020, this Bench allowed IA No.994/2020, and took on board the CA (CAA) No.401/MB.IV/2020 for hearing. Even on that date, no notice of hearing was given to the Applicant Bank, nor did the learned authorised representative bring to the attention of the Bench the factum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the hearing. He has also sought to pin the blame on the Respondent Company and his arguing counsel for the error on his part. 3.7. The actions on the part of Mr Vijay Tiwari amount to obtaining orders of the Bench behind the back of the Applicant Bank. This cannot be encouraged. Further, as a professional, it does not behove Mr Vijay Tiwari to blame others for his mistake, when he is the professional on record representing the Respondent Company. However, considering that the authorised representative is young and that he has a long way to go in his career, we restrain ourselves from imposing any costs.We, however, advise him to be more careful in future. 3.8. IA No.1002/MB.IV/2020 is disposed of accordingly. Interim Orders shall stand vacated. 4. Further directions 4.1. Considering all factors, the following further directions are hereby given: (a) The meetings referred to in this Tribunal's order dated 12.06.2020 shall be confined to that of Operational Creditors alone, and shall not include the Financial Creditors, who are outside the purview of the proposed Scheme. (b) The sixty-day time limit to conduct the meetings shall now be counted from 27.07.2020 instead of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of meeting etc. shall be published. This Notice shall be accompanied by an explanatory statement disclosing the details of the Scheme, the effect of the Scheme on the Operational Creditors, and the effect of the arrangement on any material interests of the directors of the Company and other requisite particulars in terms of rule 6 of the Companies (Compromises, Arrangements & Amalgamations) Rules, 2016. 4.6. The Notice of the Meeting as aforesaid shall also be published in two newspapers, viz., Business Standard in English and Navshakti in Marathi, both having circulation in the State of Maharashtra, not less than thirty days before the date fixed for the meeting, and in terms of rule 7 ibid. 4.7. The provisions of section 103 of the Companies Act, 2013, shall apply to the meeting of the Operational Creditors of the Company, and any reference to "members" in the said section shall be read as reference to "Operational Creditors." In other words, the provisions of section 103 ibid shall apply mutatis mutandis to the meeting of the Operational Creditors. 4.8. Voting by proxy or by authorised representative in case of bodies corporate shall be permitted, provided that the proxy i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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