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TMI Blog2022 (1) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... Scheme upon this implementation, all proceedings in the name of the Transferor Company shall be continued and enforced against the Transferee Company and such proceedings shall not be discontinued or prejudicially affect anyone by reason of the Scheme. Accordingly, the requirements of Section 230(2)(a) of the Act read with Rule 6(3)(viii) of the Rules are met. This Tribunal in a catena of Judgements has dispensed with the Meeting of the Shareholders wherein the case is of a merger of a Wholly Owned Subsidiary and Parent Company, wherein, the net worth of both Companies is positive and Unsecured Creditors are paid off in the ordinary course of business and their liability is not affected as it is neither reduced nor extinguished - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... secured debt of ₹ 24,640.21 million as on 30.06.2021 against the Transferor Company. Similarly, there are 177 Unsecured Creditors representing a total outstanding unsecured debt of ₹ 1,262.71 million against the Transferee Company. 26. That in terms of Accounting Reporting, the Creditors are the liabilities of the Company. That on approval of the Scheme, the liability worth ₹ 24,640.21 million will be shifted to the 'Transferee' Company, which is already having an existing liability of ₹ 1,262.71 million towards its own creditors. 27. In our considered view, the Unsecured Creditors of both the Applicant Companies cannot be kept in dark. If without their consent Affidavits, the meeting of the unsecur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 30. Here, it is worthwhile to refer to the Judgment in the matter of Nathi Devi v. Rahda Devi Gupta in Case No. Appeal (Civil) 5027 of 1999, dated 17.12.2014, wherein the Hon'ble Supreme Court observed that: It is equally well settled that in interpreting a statute, effort should be made to give effect to each and every word used by the Legislature. The Courts always presume that the Legislature inserted every part thereof for a purpose and the legislative intention is that every part of the statute should have effect. A construction which attributes redundancy to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.01.2021, that Section 230(2)(a) of the Act contemplates disclosure only of material facts (and not all facts) which include proceedings and investigations and it is the Companies discretion as to which investigation or proceeding, it considers as the material fact for the purpose of disclosure; that Rule 6(3)(viii) of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 (hereinafter referred to as the Rules ), requirements disclosure only of the investigations and proceedings under the Act; that the NCLT has transgressed into the domain of policy making which is impermissible under law as held by the Hon ble Supreme Court in a catena of Judgements; that there are no investigations and proceedings pending against the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 of 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 sub-section (1), shall disclose to the Tribunal 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; . (Emphasis Supplied) 4. Rule 6(3)(viii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 6. This Tribunal in a catena of Judgements has dispensed with the Meeting of the Shareholders wherein the case is of a merger of a Wholly Owned Subsidiary and Parent Company, wherein, the net worth of both Companies is positive and Unsecured Creditors are paid off in the ordinary course of business and their liability is not affected as it is neither reduced nor extinguished. Relying on the Judgements of this Tribunal in the matter of Ambuja Cements Limited in Company Appeal (AT) No. 19 of 2021, Mohit Agro Commodities Processing Pvt Ltd. Ors. in Company Appeal (AT) No. 59 of 2021 and DLF Phase IV, Commercial Developers Limited and Ors. in Company Appeal (AT) No. 180 of 2019, we are of the considered view that as the merger i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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