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TMI Blog2021 (9) TMI 861X X X X Extracts X X X X X X X X Extracts X X X X ..... med that the Scheme of Arrangement and Amalgamation inter se the Respondent Companies is illegal and bad in law. This Tribunal considered the grievances of the Appellant as well as Intervenors and inter alia this Tribunal referred to the Valuation Report - It is clear that even the Regional Director looked at the scheme as a composite scheme of arrangement/ merger/ amalgamation filed with the applications and thus we do not find that the argument that the scheme should be segregated in the context of Private Limited vis- -vis Public Limited Companies. It is quite clear that the Section applies if order has been made under Section 230 sanctioning compromise or arrangement, modification can be done if it is necessary for proper working of the scheme. In the present matter even if NCLT had passed order under Section 230, said order was reversed by this Tribunal. When the scheme has been rejected, Section 231 cannot be relied upon to seek a modification. The Application is rejected. - I. A. No. 2440 of 2020 in Company Appeal (AT) No. 238 of 2018 (Disposed off matter) - - - Dated:- 17-9-2021 - [Justice A.I.S. Cheema] The Officiating Chairperson And [V. P. Singh] Member (Techni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms and it is argued that the Respondents No. 3 to 6 and Respondent No. 9 are Private Limited Companies. Respondent No. 3 and 4 fell within the jurisdiction of NCLT Chennai Bench. NCLT Chennai Bench approved scheme of their amalgamation with Respondent No. 9 by the impugned order dated 12th April, 2018. However, Respondent No. 5 and 6 had registered offices in Mumbai and NCLT Mumbai had been pleased allow their petition and approved the Scheme with respect to Respondent No 5 and 6 vide judgment and order dated 6th December, 2017 (Annexure D at page 108). The Application claims that the said judgment dated 6th December, 2017 of NCLT Mumbai was never challenged before this Tribunal. The Applicant then refers to the case which was put up before this Tribunal by the Appellant Ankit Mittal with regard to shares held by him in Respondent No. 1. Reference is also made to the objections which were raised to the scheme by Intervenor Maya Devi, Ved Prakash and Prem Prakash and seven others who claimed to be having shareholding. The claims were made for shares held in Respondent No. 1 and Respondent No. 2. The Application has referred to steps which have been taken by the Companies before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant claimed to be representative of a shareholder in Respondent Nos. 1 and 2 Companies and had filed the Appeal only in respect of merger of Public Companies Respondent Nos. 1 and 2 and only against the judgment passed by NCLT Chennai. The Applicant is thus claiming that this Tribunal has inadvertently set aside the merger/demerger of all companies, both private and public and it should be clarified that the concerned judgment of this Tribunal is confined only to the Public Companies and not to the Private Companies. The reasoning in support given by the Applicant is that the Appellant Ankit Mittal has no locus to challenge the merger of Private Companies. It is claimed that there was no challenge to the order passed by NCLT Mumbai Bench; that the Respondent No. 3 to 6 did not have any Secured Creditors and they are closely held by the Promoter Group with whom the Appellant has no concern and that those companies do not affect any public shareholding. It is claimed that the discussion of this Tribunal was limited to Respondent No. 1 and 2 Companies. 8. It is argued for Applicant that in judgment in the matter of Mahavir Weaves Pvt. Ltd. , (1194) SCC OnLine Guj 201, Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has now became time barred and thus in the grab of modification/ clarification such reliefs as are being sought which cannot be granted. It is argued that after rejection of scheme as a whole opportunistically it cannot be bifurcated/subdivided to suit the present purpose of the Applicant. It is also argued that at the time of Appeal no such arguments were raised so as to bifurcate and approach the scheme one from the aspect of Public Company and second from the aspect of Private Company. That consents obtained from the individual companies for a composite Scheme for Group of Companies cannot be held valid, if the Scheme is not going through as a composite one. The Counsel for the Respondent referred to paragraphs 11 to 13 of the Application filed by the Applicant to submit that in the said paragraphs of the Application the Applicant is trying to claim that as there was no stay to the impugned order of NCLT Chennai dated 12th April, 2018, before orders passed by this Tribunal the Respondents had done various statutory compliances and had already taken steps under the scheme and thus the clarification is being sought. The Counsel for Original Appellant submitted that difficulty in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Clause 21 of the scheme needs to be reproduced. The same reads as under: 21. EFFECT OF NON-RECEIPT OF APPROVALS In the event of any of the said sanctions and approvals referred to in the preceding clause not being obtained and /or the Scheme not being sanctioned by the NCLT or such other competent authority and / or the Order not being passed as aforesaid before March 31st, 2018 or within such further period or periods as may be mutually agreed upon between the Transferee Company, the Demerged Companies and the Transferor Companies, by their respective Board of Directors (and which the Board of Directors of the companies are hereby empowered and authorised to agree to and extend the Scheme from time to time without any limitation), this Scheme shall stand revoked, cancelled and be of no effect, save and except in respect of any act or deed done prior thereto as is contemplated hereunder or as to any rights and/ or liabilities which might have arisen or accrued pursuant thereto and which shall be governed and be preserved or worked out as is specifically provided in the Scheme or as may otherwise arise in law. 13. Thus, in the given contingency of scheme not getting s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly on 12th April, 2018 as can be seen from Annexure C. It is because of such statement NCLT Mumbai appears to have accorded approval of the scheme for Respondent No. 5 and 6 and mentioned in Para 15 of the judgment as under: 15. Since all the requisite statutory compliances have been fulfilled, Company Scheme Petition No. 516 of 2017 filed by the Transferor Company 5 is made absolute in terms of prayer clause (a) of the Petition and Company Scheme Petition 517 of 2017 filed by the Transferor Company 6 is made absolute in terms of prayer clause (a) of the Petition. 17. Thus, the arguments being raised by the Applicant that the orders of the NCLT Mumbai were not challenged are not good reasons for this Tribunal to take cognizance firstly because the orders were passed in view of a statement made which on record does not appear to be correct and secondly the scheme being composite unless it is approved by all concerned authorities it cannot be implemented or acted upon. It is for such reasons only all these Respondents including Respondent Nos. 5 and 6 also stood before NCLT Chennai for approval of the same scheme which was approved by the impugned order by NCLT Chennai, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omposite scheme of arrangement/ merger/ amalgamation filed with the applications have been examined in view of the observations/objections raised in the affidavit regarding lack of clarity/lack of furnishing of crucial information/details on many aspects of the scheme which has been pointed out in para (9) and (11) (Page 704 to 711 of appeal) and prayed that the Bench may dispose of the matter on merits and pass such order/orders as deemed fit and proper. 20. It is clear that even the Regional Director looked at the scheme as a composite scheme of arrangement/ merger/ amalgamation filed with the applications and thus we do not find that the argument that the scheme should be segregated in the context of Private Limited vis- -vis Public Limited Companies. 21. Section 11 of NCLAT Rules gives Inherent Powers to pass such orders as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Tribunal. What the Applicant, in effect, is seeking from this Tribunal is to reopen the whole Appeal and consider if the scheme can be partly enforced with regard to the Private Companies. This cannot be done relying on powers under Rule 11. Under Sub-section ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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