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TMI Blog2024 (11) TMI 1008X X X X Extracts X X X X X X X X Extracts X X X X ..... ' or 'Transferor Company 2') and the Appellant Company (hereinafter referred to as 'Scheme of Amalgamation' or 'Scheme'). The appellant has prayed for following reliefs in the said appeal:- i) The impugned order dated 22.04.2024, passed by the Hon'ble NCLT, Chandigarh Bench, Chandigarh in the application filed by the Appellant Company being CA No.197/2023 in CA (CAA) No.24/CHD/HRY/2023 filed under Section 230-232 read with Section 234 of the said Act be set aside. ii) That the Hon'ble NCLT, Chandigarh Bench, Chandigarh be directed to allow the Appellant Company to file the second motion Petition under Section 230-232 read with Section 234 of the said Acte along with the amended scheme. 2. The facts of the case are the Appellant Company / Transferee Company is primarily engaged in the business of construction and leasing of commercial real estate and also undertakes business of providing operation, maintenance and support services in relation to the real estate projects. FIM Holdco Ltd. is a company incorporated in Mauritius on November 7, 2007. The Respondent Company 1 holds a Global Business License in Mauritius and its main activity is also to act as an investment holding co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Certificate of the statutory auditors of the Appellant Company confirming the accounting treatment proposed in the Scheme of Amalgamation u/s 133 of the Companies Act, 2013 vii) Chartered Accountant certificate certifying the list of shareholders of the Appellant Company as on March 17, 2023 viii) Consent affidavits from all (100%) the equity shareholders of the Appellant Company, according, their consent to the Scheme of Amalgamation ix) Chartered Accountant certificate certifying the list of secured and unsecured creditors of the Appellant Company as on March 17, 2023 x) Approval from sole secured creditor of the Appellant Company. Thereafter, the Appellant Company had also filed consent affidavit of the sole secured creditor (100%) of the Appellant Company, according, its consent to the Scheme of Amalgamation by way of an Additional Affidavit vide diary no 0404116014512023/1 on May 29, 2023 xi) Consent affidavits from 99.99% of the unsecured creditors of the Appellant Company, according, their consent to the Scheme of Amalgamation 5. The Ld. NCLT allowed the first motion application vide order dated 11.09.2023. As per the said first motion application order, in lieu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary, desirable or proper to give effect to this Scheme and to resolve any doubts, difficulties or questions whether by reason of any orders of the NCLT or of any directive or orders of any other authorities or otherwise howsoever arising out of, under or by virtue of this Scheme and / or any matters concerning or connected there with'. 8. In accordance with Clause 28 of the Scheme, the Board of Directors of the Appellant Company vide resolution dated 09.10.2023 and Board of Directors of the Transferor Companies vide resolution dated 10.10.2023 adopted the said addendum to the Valuation Report and requisite amendments to the said Scheme. The Appellant Company then filed the said CA before the Ld NCLT seeking modification of the said Scheme as per the schedule of amendment annexed to the aforesaid Company Application. Pursuant to the modification, the following compliances were also undertaken:- i) Addendum to the fair share exchange ratio report dated March 15, 2023 issued by Mr Akshat Jain, IBBI Registered Valuer on October 9, 2023 ii) Approval of the Scheme of Amalgamation by the board of directors of the Appellant Company on October 9, 2023 after considering the addend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Scheme of arrangement or compromise as the case may be. The provisions Section 231 of the Act and Rule 17(1) of the Rules are set out below: "231. Power of Tribunal to enforce compromise or arrangement.-(1) Where the Tribunal makes an order under section 230 sanctioning a compromise or an arrangement in respect of a company, it- (a) shall have power to supervise the implementation of the compromise or arrangement; and (b) may, at the time of making such order or at any time thereafter, give such directions in regard to any matter or make such modifications in the compromise or arrangement as it may consider necessary for the proper implementation of the compromise or arrangement. 17. Order on petition. - (1) Where the Tribunal sanctions the compromise or arrangement, the order shall include such directions in regard to any matter or such modifications in the compromise or arrangement as the Tribunal may think fit to make for the proper working of the compromise or arrangement." 12. It is alleged despite the Ld NCLT having the requisite jurisdiction to modify the scheme and the modification being miniscule for which all relevant approvals were duly obtained, the Ld NCLT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing the said CA has completely ignored a string of precedents wherein amendments of much greater significance were proposed to the original Scheme, which were subsequently amended and sanctioned in the modified Scheme. We also note that notices will be issued to statutory authorities and they will get opportunity to file their objections, if any, during proceedintgs for Second Motion and final approval of the scheme. 16. In 'Gera Developments Private Limited' I.A. NO. 1018 OF 2020 in CP(CAA) No. 923/ 2020 in CA(CAA) 4041 of 2019, the Petitioner Companies proposed modifications to the original scheme by abandoning the transfer of an entire undertaking. The proposed amendment effectively curtailed the Scheme to only two Petitioner Companies and their shareholders as opposed to three Petitioner Companies in the original Scheme. The said scheme was duly sanctioned by Ld NCLT Mumbai Bench. 17. In 'Maccaferri Environmental Solutions Private Limited' IA No. 3250/2019 in CP (CAA) No.2114/MB.I/2019, sanction was sought to amend the scheme by changing the appointed date which also necessitated a change in the swap ratio. Sanction was accorded to the same by the Ld NCLT Mumbai bench and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as heard on 04.04.2024 and impugned Order was passed on 22.04.2024 i.e. after a period of almost 6 months from the date of filing of the said CA. An inordinate amount of time has already elapsed for concluding the proceedings before the Ld NCLT. The Ld NCLT in the interest of time and justice, should have considered the deemed approval of the shareholders as stated in their consent affidavits or in the alternate could have issued directions for tendering fresh consent affidavits rather than dismissing the said CA in limine and asking to file First Motion afresh. Filing the first motion application afresh will rather amount to non-compliance of the MCA Circular FNO./7/12/2019/CL-I relevant contents are as under":-. "C. Where the 'appointed date' is chosen as a specific calendar date, it may precede the date of filing of the application for scheme of merger/amalgamation in NCLT. However, if the 'appointed date' is significantly ante-dated beyond a year from the date of filing, the justification for the same would have to be specifically brought out in the scheme and it should not be against public interest." 23 If the impugned order is allowed to sustain then the scheme will have ..... 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