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TMI Blog2021 (9) TMI 411X X X X Extracts X X X X X X X X Extracts X X X X ..... - Even if the Company debt is under NPA and even if the Company is under Liquidation, it can always invoke Chapter-XV of the Act through Scheme of Arrangement to come out of the situation. There is no bar in merging unhealthy company with healthy company to come over the crisis. There was no need perhaps to pass this specific directions. Appeal disposed off. - Company Appeal(AT) No. 232 of 2020 Company Appeal(AT) No. 43 of 2021 & I.A. No. 641 of 2021 - - - Dated:- 7-9-2021 - [Justice Jarat Kumar Jain] Member (Judicial) And (Dr. Ashok Kumar Mishra) Member(Technical) For the Appellant : Mr. C.A. Sundaram, Sr. Advocate with Mr. P.C. Ghosh, Mr. Partha Sil and Mr. Tavish Bhushan Prasad Advocates. For the Respondents : Mr. Joy Saha, Sr. Advocate with Mr. Abhijeet Sinha, Mr. Dipen Chatterjee, Ms. Rusha Mitra, Mr. Saptrshi Mandal, Ms. Shreyas Edupuganti, Advocates for Respondent No. 1.Mr. Kumar Anurag Singh, Mr. Zain A. Khan and Mr. Saikat Sarkar, Advocates for Respondent No. 2. JUDGMENT DR. ASHOK KUMAR MISHRA, TECHNICAL MEMBER 1. These two appeals have been filed by the Appellants under Section 421 of the Companies Act, 2013 (for short Act ) against the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atus quo till further orders with respect to their respective contractual terms dues claims and rights and are estopped from taking any coercive steps including reporting in any form and /or changing the account status of the Applicant Company and its holding Company (SREI Infrastructure Finance Limited) from being a standard asset, which will prejudicially affect the implementation of the Scheme and render the said Scheme ineffective. 4. The Appellant in CA (AT) No. 232 of 2020 has raised the issue of jurisdictional error or material irregularity in exercising the jurisdiction by the Tribunal under Section 230 of the Act. Axis Bank letter dated 07.11.2019 page 59 volume I of the Appeal paper book and letter dated 04.04.2020 of the Appellant- UCO Bank available at page 60 of the Volume I of the Appeal paper book, which were in their individual capacity has been misconstrued as prior consent of 75% approval of the Secured Creditors. The Appellant has also submitted that the UCO Bank, representing the consortium of Bankers has filed this appeal against the impugned order after their internal concurrence and approval. It was also submitted by the Appellant that the meeting of P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orting in any form or changing the account status pending the consideration of the scheme by the creditors. They have observed and stated that the Tribunal is in the teeth of statutory scheme under the RBI Act and its related circulars including the master circular on prudential norms which has statutory force clearly set outs the parameters for classifications of the loan amount as NPA. This is the issue of grave importance and have significant public interest and hence the Appellant, RBI is critical of this. They have also stated that they were not party to the hearing and accordingly they could not present their submissions. However, they have filed an intervention application before the Tribunal. They have also stated that Section 230 of the Act, cannot be extended to Bank and financial institution which are discharging public functions by the impugned directions. The Appellants role as the prime regulator vested with wide powers under the BR Act and RBI Act to supervise, govern and regulate the Non-Banking Finance Company (NBFC). The Tribunal has failed to consider Chapter III-B of the RBI Act. The Tribunal has failed to appreciate as various courts have held in a catena of ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stakeholders themselves to decide the scheme of arrangement and such circumstances status quo is not against the law laid down. In the first stage motion under section 230 of the Act basically only the Appellant Company appears and present their scheme for convening the meeting of members or creditor and is not required to give notice thereof to creditors. Creditors as well as Regulators come at a later stage. They have even stated that Section 41 of the Specific Relief Act is not applicable to the order as it is not a permanent injunction. They have also raised that the Appeal is barred by Limitation and the same was disposed of on 25.08.2021 after hearing the concerned parties that the appeal is within limitation as per the order of the Hon ble Supreme Court in the case of Suo Motu Writ Petition (Civil) No. 03 of 2020 and the concerned I.A No. 642 of 2021 for condonation of delay was allowed. 7. We have gone through the submissions made by the parties and has carefully considered the pleadings and related regulations and are observing as follows: a. Chapter XV of the Act Compromises, Arrangements and Amalgamations are covered by Section 230 -240 of the Act. b. The r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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