AI Structured Summary
Not yet generated for this judgment
Judgment
[Per: Shreesha Merla, Member (T)]
This Interlocutory Application No. 2868 of 2021 preferred by the Administrator of the First Respondent Company namely ‘SREI Equipment Finance Ltd.’ under Rule 11 of National Company Law Appellate Tribunal Rules, 2016 seeking to withdraw the Scheme of Amalgamation (herein referred as the ‘Scheme’), proposed by the First Respondent with its creditors.
Ld. Counsel appearing on behalf of the Administrator of the erstwhile management had filed an Application No. 1106/KB/2020 under Section 230(1) of the Companies Act, 2013 (the ‘Act’) seeking directions to convene meetings of its creditors for approval of the proposed ‘Scheme’ before the National Company Law Tribunal (NCLT), Kolkata. By the impugned order dated 30.12.2020, NCLT has directed the convening of the meetings of the creditors of the First Respondent and also passed a certain direction against the Credit Rating Agencies qua the First Respondent, which is reproduced herein: -
“It is further directed that the Credit Rating Agencies shall not consider any such non-payment to be default under the respective debt documents and shall maintain the rating(s) of SEFL at least that of investment grade”
In this background, the Appellant ‘M/s Brickworks Ratings India Pvt. Ltd.’ preferred Company Appeal (AT) No. 34 of 2021 under Section 421 of the Companies Act, 2013 assailing the above direction in the impugned order.
The Ld. Counsel for the Appellant submitted that the ‘Scheme’ stands rejected by a majority of the creditors of the First Respondent Company and accordingly, stands infructuous; that the Reserve Bank of India (RBI) vide its Notification Bearing No. 2021-2022/981 dated 04.10.2021, in exercise of its powers under the Reserve Bank of India Act, 1934, superseded the Board of Directors of the SREI Equipment Finance Ltd. and appointed Mr. Rajneesh Sharma as the Administrator of the First Respondent Company and that subsequently RBI filed a Petition seeking initiation of CIRP against SREI Equipment Finance Ltd./the First Respondent Company. The Petition was admitted vide order dated 08.10.2021 and hence, the Applicant/Appellant seeks withdrawal of the ‘’Scheme’ and submits that I.A. No. 2868 of 2021 may be allowed and the main Appeal also be disposed of as the ‘Scheme’ stands rejected.
The Applicant has filed ‘Declaration of the Result of Meetings’ dated 27.05.2021 and 03.07.2021, whereby and whereunder the ‘Scheme’ was rejected by a majority of 71.65% and 93.80% respectively. The Copy of the order dated 08.10.2021 whereby the Adjudicating Authority has admitted the Petition preferred by RBI against the First Respondent, is also appended with this Application.
Having regard to the fact that the ‘Scheme’ stands rejected by majority of the creditors of the First Respondent and the said Company is also undergoing Insolvency proceedings, we are of the view that the relief prayed for in the present Application, be allowed. For all the aforestated reasons, I.A. No. 2868 of 2021 filed in Company Appeal (AT) No. 31 of 2021 is allowed.
Company Appeal (AT) No. 31 of 2021 has been preferred by M/s CARE Ratings Ltd. & Anr. against the impugned order dated 30.12.2020 passed in the matter of SREI Equipment Finance Ltd. under Section 230 (1) of the Companies Act, 2013 in CA (CAA) No. 1492/KB/2020 to a limited extent whereby the Tribunal had directed the Credit Rating Agencies not to consider any non-payment of dues by the First Respondent to its creditors as default under respective debt documents and shall maintain the ratings of the First Respondent. By the impugned order, NCLT has observed as follows:-
“34.In exercise of powers conferred Under Section 230 of the Companies Act, 2013 read with Rule 11 of the National Company Law Tribunal Rules, 2016 and until the Scheme is considered by the said Creditors and this Hon'ble Tribunal and to protect the Interest of stakeholders, we direct that in the meantime till further orders, the Creditors (including representative security or debenture trustees) of the Applicant Company covered under the Scheme shall maintain status quo with respect to their respective contractual terms dues claims and rights and the Creditors (including security or debenture trustees) and all governmental or regulatory authorities shall be estopped from taking any coercive steps including reporting in any form and/or changing the account status of the Company from being a standard asset which will prejudicially affect the Company and/or sanctioning and/or implementation of the Scheme. It is further directed that the Credit Rating Agencies shall not consider any such non-payment to be a default under the respective debt documents and shall maintain the rating(s) of SEFL at least that of investment grade.”
In view of the crystalline fact that I.A. No. 2868 of 2021 filed by the First Respondent/Administrator in Company Appeal (AT) No. 31 of 2021 ‘seeking withdrawal of the scheme’ is allowed by this Tribunal, as a logical corollary, the Company Appeal (AT) No. 31 of 2021 stands allowed. No costs.
Resultantly, the impugned order dated 30.12.2020 in CA (CAA) No. 1492/KB/2020 on the file of National Company Law Tribunal is hereby set aside.
I.A. No. 2867 of 2021 in Company Appeal (AT) No. 34 of 2021 has been preferred by the Applicant/Appellant ‘M/s Brickworks Ratings India Pvt. Ltd.’ seeking similar prayer of ‘Withdrawal of the Scheme’
In view of the fact that Company Appeal (AT) No. 31 of 2021 has been allowed and the impugned order itself has been set aside, consequently, I.A. No. 2867 of 2021 is allowed and as a logical corollary Company Appeal (AT) No. 34 of 2021 stands allowed. No costs.
Company Appeal (AT) No. 39 of 2021 has been preferred by Reserve Bank of India challenging the same impugned order dated 30.12.2020 which is set aside. Resultantly, Company Appeal (AT) No. 39 of 2021 stands allowed. No costs.