Okay Estate Developers Private Limited Vs

Shyam Babu Gautam, Member (Technical)

The Court convened through videoconferencing.

OBJECTIONS RAISED BY THE APPLICANTS IN CA/267/2021

The present Company Application filed by Mr. Eqbal Mohammad Patel and Mr. Afzal Mahadik, the Creditors of the Petitioner Companies thereby objecting the Sanction of the Scheme between the Demerged Company and the Resulting Company.

The Applicants submit that the Respondents (Petitioner Companies) have suppressed certain facts and have submitted incorrect list of creditors in the Affidavit dated 11.05.2020. The Petitioner No. 1 Company have shown in the list of unsecured creditors for an amount of Rs. 30,00,000/- as an investment amount due and payable to Mr. Eqbal Mohammad Patel. However, Mr. Eqbal Mohammad Patel had issued an Cheque No. 035516 of Kotak Mahindra Bank Ltd for an amount of Rs. 1,50,00,000/- and the same was credited to the account of the Petitioner Company 1 on 12.05.2011. Whereas, the Statement of accounts filed with the Tribunal for the Sanction of the Demerger Scheme records only Rs. 30,00,000/- as due and payable to Mr. Eqbal Mohammad Patel. The Applicants further submits that till date no money has been received from the Petitioner Company No.1. The books of account of the Petitioner Company No. 1 do not reflect true and correct Financial position of the Company. A legal Notice to this effect was sent on 18.11.2020 thereby calling upon the Petitioner Company No. 1 to explain the incorrect debt list, however the Petitioners did not reply.

The Applicants further submit that the Petitioner Companies had malafidely furnished same address for both the creditors due to which none of the consignment was received as service to the creditors was avoided. Also, the consignment which was shown to be booked in the month of July, 2020 was shown to be delivered in the month of September, 2020. The Applicants have annexed the tracking report and also the delivery sheet to the Application. Also, the delivery sheet did not bear signatures of the acknowledgement.

The Applicant submit that none of the creditors had been served and the consignments allegedly addressed to the creditors were returned as undelivered. The Petitioner Company 1 has also addressed most of the consignments to its own address.

The Applicants further submit that there are various FIR’s lodged against the Director of the Petitioner Companies.

The Applicants further submit that no notice was given to all the creditors. The Applicants themselves came to know about the Order dated 17.07.2020, wherein the Tribunal had directed to issue notice through publication in two newspapers namely Free Press Journal and Navshakti. The said Order was passed immediately at the 1st phase of lockdown where there was no facility for circulation of Local  Newspapers  delivered  to  the  house.  Also,  the newspaper did not have wide circulation hence the service was not completed on all the creditors. The Petitioner Companies intentionally filed the said Petition during the outbreak of pandemic to deceive the creditors and mislead the Tribunal.

The Applicants further submit that the financial position of the Petitioner Company 2 is not sound. The said Company Petition is against the public policy and in violation of law.

Also, the said Panvel property being a Wakf property no third party rights or interest can be created and the said Company Petition is a sham and is filed to deceive the creditors as no interest of creditors is safeguarded by the Petitioner Companies.

Reply of the Respondent Companies

The Respondents submit that maintainable. The Tribunal 12.12.2020 had directed the the Application is not vide its Order dated Applicants to file their objection to the Scheme within a period of two weeks i.e. on or before 27.11.2020 from the date of the Order. However, the Applicant chose not to file any objection but instead preferred an appeal with the National Company law Appellate Tribunal (NCLAT). The Appeal was dismissed as withdrawn by the NCLAT vide order dated 11.01.2021.

The Respondents further submit that the Company Petition is filed to facilitate smooth development of the Panvel Project as per No objection Certificate granted by the Maharashtra State Board of Wakf dated 25.07.2011, without a change in the share holding of the Petitioner Companies. Further the shareholders of the Petitioner Companies are same and there is no transfer of any immovable property as the Respondent Company has only development right as per the NOC dated 25.07.2011.

Further the Respondents submit that in the Scheme between the Companies, only the shareholders of the Respondent Companies would be affected/concerned and only the shareholders would have the right to object to the Scheme. The Applicants are the creditors and are not getting affected as there is no compromise or any arrangement. The Tribunal vide its Order dated 14.05.2020 in Company Application CA (CAA) 4123/2019 had dispensed the meeting of the shareholders and unsecured creditors. But, keeping in view of the circumstances, the Respondent Companies were directed to issue notices to all the unsecured creditors by Post, hand delivery therewith enclosing the copy of the Scheme also indicating that if any of the creditors had objection to the said Scheme, they shall appear before the tribunal within a period of 30 days from the date of receipt of the said letter. To this effect the Respondent Company 1 had dispatched notice to its unsecured creditors and also filed Affidavit of service. Further the Respondent Companies filed Company Scheme Petition and same was admitted vide order dated 14.07.2020 and directions to publish notice in two newspapers was given. The Respondents also published the notice of final hearing of petition on 29.07.2020 in two newspapers one in Fress Press Journal (English Edition) and Navshakti (in vernacular language). The final date for hearing was fixed on 14.08.2020. the Applicants did not file any objections with the Tribunal nor any reply to the notices published in the newspapers.

Further one Counsel for the Applicants appeared on 12.11.2020 and the Tribunal directed the Applicants to file their objection on or before 27.11.2020 however, the Applicant never filed objections.

Findings of the Adjudicating Authority.

We have heard the submissions of the Applicants and the Respondents. It is seen from the records that the Applicants were given sufficient time to file their objections on various occasions. Further, the allegation raised as to the Panvel property being Wakf property as no third party rights or interest can be created without the permission of the Maharashtra Wakf Board cannot be raised by the Applicants as this is the subject matter to be adjudicated by the Wakf Tribunal and this Hon’ble Tribunal has no jurisdiction to entertain and decide the above issue.

Further the issue raised by the Applicants as to the FIR’s lodged against the Directors of the Respondent Companies cannot be considered as they are in the personal capacity and have no bearing on sanctioning of the Scheme.

Further, it can be seen that all procedures as prescribed under Section 230 to 232 of the Companies Act, 2013 and Compromise & Arrangement Rules have been complied and notices at relevant point of time had been given to all the creditors and Sanction of the Scheme was in Public domain. But it is the Applicant who did not come in time to raise the objections. Also no objections have been raised by any regulatory authorities as Regional Director, Registrar of Companies Income Tax Authorities etc.

Further it can been seen from the records that this Bench vide its Order dated 12.11.2020 granted an opportunity to the Applicants to file any objections within two weeks before 27.11.2020. However, the Applicants instead of filling any objections with this Tribunal preferred to file an Appeal before the Hon’ble NCLAT against the Order dated 12.11.2020. This clearly shows that the Applicant was unnecessarily buying time and prolonging the Sanction of the Scheme.

In view of the above, CA No. 267 of 2021 is rejected and disposed of. No Orders as to costs.

OBJECTIONS RAISED BY THE APPLICANT IN CA/1//2021

The present Application is filed by Maharashtra State Board of Wakf praying that:

(a) This Hon’ble Tribunal be pleased to direct the Petitioner to implead the Maharashtra State Board of Wakf as party to the Present Company Petition

(b) This Hon'ble Tribunal be pleased to permit Maharashtra State Board of Wakf to address the Hon'ble Tribunal the present Company Petition.

(c) This Hon'ble Tribunal be please to restrain the Original Petitioner i.e. M/s. Okay Estate Developers Pvt. Ltd and the Petitioner No. 2 Grid Infradevelopers Private Limited in dealing with the property in question i.e. land survey no. 457A/A+2/A, Plot No. 280 & 280/1 situated at Panvel belonging to the said Wakf 'Magdum Bibi Wakf' is governed by the Wakf Act. 1995.

(d) This Hon'ble Tribunal be please to reject the Company Petition and scheme of arrangement in between the Original Petitioner i.e. Okay Estate Developers Pvt. Ltd and the Petitioner No. 2 Grid Infradevelopers Private Limited in dealing with the property in question i.e. land survey no. 457A/A+2/A, Plot No. 280 & 280/1 situated at Panvel belonging to the said Wakf 'Magdum Bibi Wakf' is governed by the Wakf Act, 1995.

(e) Any other and further order that this Hon'ble Tribunal deem fit and proper in the interest of justice.

The Applicant states that the property in question and in dispute  (Panvel  Property)  belonging  to  ‘Magdum  Bibi Waqk’ is a Wakf property. The said trust i.e. ‘Magdum Bibi Wakf’ is duly registered by Maharashtra State Board of Wakf (Wakf Board). The certificate issued by the Wakf Board is the custodian of the Wakf property and the same is governed by the Wakf Act, 1995.

The Applicant submits that initially the NOC was issued in favour of the Petitioner Company No. 1 by the Wakf Board dated 25.07.2011. Further, after the issuance of the NOC, an agreement was executed between the Petitioner Company No. 1 and Magdum Bibi Wakf on 26.09.2011. The NOC as granted to the Petitioner Company No. 1 was stayed by the Divisional Bench of the Hon’ble Bombay High Court.

The property in question is a Wakf property and the same cannot be alienated by the Petitioner Company No. 1 to any other developer without following due process of law and as also no third-party rights can be created as per the provisions of the Wakf Act, 1995.

Reply of the Respondent (Petitioner Companies)

The Petitioner Company submit that the Application is not maintainable and further this Hon’ble Tribunal has no jurisdiction to entertain the disputes.

The Company Petition is filed to facilitate smooth demerger of development rights of Panvel Project as per No Objection Certificate granted by Maharashtra State Board of Wakf dated 25th July, 2011. There is no transfer of any immovable property as alleged as the Petitioner Company 1 has only development right in the property at Panvel as per the said NOC dated 25th July, 2011. It is further stated that in the Scheme between the Petitioner Companies, only the Shareholders and Creditors of the Petitioner Companies would be concerned / affected and only the Shareholders and / or the Creditors would have right to object to the Scheme under Section 230 - 232 of the Companies Act, 2013.

The Counsel for the Petitioner Companies states that, the applicants are trying to raise a question, dispute regarding purported transfer of Wakf property from one entity to another entity. Therefore, the question raised by the Applicants fall within the domain of Wakf Tribunal under Section 83(1) of the Wakf Act,1995, therefore this Tribunal does not have the jurisdiction to entertain the same. Under Section 83(2), an order made under Wakf Act 1995 or Rules framed thereunder may be challenged before the Wakf Tribunal within the prescribed period and not before any other forum.

The Counsel for Petitioner Companies states that the Company Application filed by the Maharashtra State Board of Wakf cannot be filed with this Tribunal as the Tribunal is not the Forum to deal with the objection raised by the Wakf Board. The Wakf Board itself has given the NOC dated 25.07.2011 after passing a unanimous resolution attended and signed by all its members. Also the said NOC dated 25.07.2011 cannot be challenged as the time to challenge the same has expired by efflux of time. Therefore, NCLT is not the Forum to raise such dispute.

The Counsel for the Petitioner Companies states that the Order passed by Wakf Board is required to be challenged before the Wakf Tribunal within the prescribed limit. Since there is no prescribed time limit under the Wakf Act, 1995, Article 137 of the Limitation Act comes into operation whereunder an Order i.e. NOC dated 25th July, 2011 can be challenged before the appropriate Court within 3 years. Therefore, the remedy to challenge the said NOC dated 25th July, 2011 is time barred.

The  Counsel  for  the  Petitioner  Companies  states  that allegations relating to cancellation of NOC dated 25th July, 2011 and filing of FIR by the Wakf Board is concerned, the Petitioner Companies submit that the State Government cancelled NOC granted by the Wakf Board and in view of the cancellation of the NOC, Maharashtra State Wakf ordered Regional Wakf Officer to file an FIR. However, both the orders were challenged by the Petitioner Company 1 before the Wakf Tribunal at Aurangabad. The Wakf Tribunal at Aurangabad by its Order dated 11th April, 2019 had been pleased to set aside the order passed by the State Government cancelling NOC and the order passed by the Wakf Board for registration of the FIR. Therefore, by virtue of the order passed by the Wakf Tribunal on 11th April, 2019, the said NOC is intact rather confirmed by the Wakf Tribunal. The said order is not challenged before the Hon’ble Bombay High Court and therefore the same has become conclusive and final and as such is having binding effect.

The Counsel for the Petitioner Companies states that as per clause 6 (Legal proceedings) in the Scheme and in particular that all legal proceedings of whatsoever nature by or against the Demerged Company pending and / or arising at the Appointed Date relating to the Demerged Undertaking of the Demerged Company, as and from the Operative Date, shall be continued and enforced by or against the Resulting Company.

The Petitioner Companies therefore prays that the CA/1/2021 filed by the Applicants should be rejected and the main Company Petition be allowed and scheme be sanctioned in terms of separate order as the Regional Director have filed their report and supplementary report.

Case Law relied upon

The Hon’ble Supreme Court in the Judgment reported in (2010) 14 SCC 588 “Board of Wakf, West Bengal v/s Anis Fatma Begum & Anr” in para 10 an 11 read with Para 14 held that the Wakf Tribunal can decide all disputes related to Wakf or Wakf property. Further that the Wakf Act, 1995 is a Special Act and Wakf Tribunal is a Special Forum and in presence of Special Forum, no recourse to general law can be availed. Therefore, NCLT is a Forum which is not meant to determine the dispute arising under the Wakf Act, 1995.

The Hon’ble Supreme Court in another Judgment reported in (2015) 17 SCC 65 in paras 22, 23, 24 and 25 has unequivocally held that “the legislature wanted to make sure that no authority is apart from the Tribunal constituted under Section 83 of the Act shall determine any dispute, question or other matter relating to a Wakf, eviction of tenant or determination of rights and obligations of the lessor and lessees of such property under this Act”.

Finding of the Adjudicating Authority

Having considered the submissions of both the parties it is seen that the Applicant is neither a shareholder nor creditor of the Petitioner Companies and have no locus to object the present Scheme. The proceedings under Section 230-232 of the Companies Act, 2013 are limited and provide for arrangement between companies and its shareholders and creditors. The proceedings do not provide for any intervention by persons other than shareholders, creditors, regulators or other authorities which are likely to be affected by the Scheme.

The Scheme is to facilitate the smooth development of the Panvel Property where an NOC had already been granted by the Wakf Board.

Further it can been seen that this Bench vide its order dated 12.11.2020 had granted an opportunity to any of the objectors to file its objections on or before 26.11.2020. But the Applicant failed and did not file any objections.

Further the Applicant have raised the disputes and questions which are required to be determined by the Wakf Tribunal under Section 83 of the Wakf Act, 1995. For the sake of convenience, Section 83 of the Wakf Act,1995 is reproduced herein below.

Section 83.

Constitution of Tribunals, etc. –

(1) The State Government shall, by notification in the Official Gazette, constitute as many Tribunals as it may think fit, for the determination of any dispute, question or other matter relating to a Wakf or Wakf property, eviction of a tenant or determination of rights and obligations of the lessor and the lessee of such property, under this Act and define the local limits and jurisdiction of such Tribunals.

(2) Any mutawalli, person interested in a Wakf or any other person aggrieved by an order made under this Act, or rules made thereunder, may make an application, within the time specified in this Act or where no such time has been specified, within such time as may be prescribed, to the Tribunal for the determination of any dispute, question or other matter relating to the Wakf.

(3) Where any application made under sub-section (1) relates to any Wakf property which falls within the territorial limits of the jurisdiction of two or more Tribunals, such application may be made to the Tribunal within the local limits of whose jurisdiction the mutawalli or any one of the mutawallis of the Wakf actually and voluntarily resides, carries on business or personally works for gain, and, where-any such application is made to the Tribunal aforesaid, the other Tribunal or Tribunals having jurisdiction shall not entertain any application for the determination of such dispute, question or other matter.

Provided that the State Government may, if it is of opinion that it is expedient in the interest of the Wakf or any other person interested in the Wakf or the Wakf property to transfer such application to any other Tribunal having jurisdiction for the determination of the dispute, question or other matter relating to such Wakf or Wakf property, transfer such application to any other Tribunal having jurisdiction, and, on such transfer, the Tribunal to which the application is so transferred shall deal with the application from the stage which has reached before the Tribunal from which the application has been so transferred, except where the Tribunal is of opinion that it is necessary in the interest of justice to deal with the application afresh.

(4) Every Tribunal shall consist of –

(a) one person, who shall be a member of the State Judicial Service holding a rank, not below that of a District, Sessions or Civil Judge, Class I, who shall be the Chairman;

(b) one person, who shall be an officer from the State Civil Services equivalent in rank to that of the Additional District Magistrate, Member;

(c) one person having knowledge of Muslim law and jurisprudence,

Member; and the appointment of every such person shall be made either by name or by designation.

(4-A)The terms and conditions of appointment including the salaries and allowances payable to the Chairman and other members other than persons appointed as ex officio members shall be such as may be prescribed.

(5) The Tribunal shall be deemed to be a Civil Court and shall have the same powers as may be exercised by a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908), while trying a suit, or executing a decree or order.

(6) Notwithstanding anything contained in the Code of Civil Procedure, 1908 (5 of 1908), the Tribunal shall follow such procedure as may be prescribed.

(7) The decision of the Tribunal shall be final and binding upon the parties to the application and it shall have the force of a decree made by a Civil Court.

(8) The execution of any decision of the Tribunal shall be made by the Civil Court to which such decision is sent for execution in accordance with the provisions of the Code of Civil Procedure, 1908 (5 of 1908).

(9) No appeal shall lie against any decision or order whether interim or otherwise, given or made by the Tribunal:

Provided that a High Court may, on its own motion or on the application of the Board or any person aggrieved, call for and examine the records relating to any dispute, question or other matter which has been determined by the Tribunal for the purpose of satisfying itself as to the correctness, legality or propriety of such determination and may confirm, reverse or modify such determination or pass such order as it may think fit.”

Therefore, the Tribunal cannot adjudicate the issue relating to Wakf and Wakf property. Under Section 83(1) of the Wakf Act, 1995, a Tribunal is created for determination of any question, dispute or other matters relating to a Wakf or Wakf property.

Further, Regional Director, Ministry of Corporate Affairs has already filed his affidavit for the demerger of the said Companies and has not found the Scheme to be against the Public Interests.

In view of the above CA No. 01 of 2021 is rejected and disposed of. No Order to Costs.

OBJECTIONS RAISED BY THE APPLICANT IN CA/50//2022

The present Application is filed by Raja Bahadur Welfare Association in compliance of NCLAT Order 20th September, 2021 in Company of Appeal (AT)/37 of 2021 and also in terms of direction issued by this Hon’ble Bench vide order dated 26th November, 2021 in CA/378/2021 filed by the Petitioner Companies.

The Applicant submits that Scheme of Arrangement is against the public policy and the Petitioners have not approached Hon’ble Tribunal with clean hands and objectives and have hidden the material facts. The Applicant submits that Investigation is pending against the Petitioner Company 1 for the fact that huge amounts are yet to be paid by the Original Petitioner No 1 to the Income tax authorities and other Government authorities as well. Also there are FIR’s pending against one of the director of the Petitioner Company 1 and the police department has invoked Maharashtra Control of Organised Crime Act (MCOCA) and filed petition with High Court of Mumbai for cancellation of bail.

Further, the Balance Sheet as on 31st December,2020 of the Petitioner Company amounts to Rs 1,48,33,407/- which are more than 10% of the total outstanding payable to Raja Bahadur Building Account and hence they are creditors and entitled to file their objection to the scheme. The Counsel for the applicant submits that proper notice had not been served on Raja Bahadur Welfare Association. The Applicant also states that investigation by income tax authorities is pending against the Petitioner Company in respect of the said Raja Bahadur Welfare Association and the said amount is payable to various government authorities such as income tax, BMC etc. The Petitioner Company No. 1 having a huge outstanding amount wants to demerge its only valuable assets i.e. Panvel property to some unknown company viz Grid Infradevelopers Private Limited who does not have any expertise or experience of development of properties.

The Counsel for the Applicant further states that subject property is Wakf property and alienation or creating any third party interest and the same is clear violation of Wakf Act and thus the scheme is against the public policy.

Reply of the Respondent (Petitioner Companies)

The Counsel for the Petitioner companies submits that the Applicant is not a registered association and has failed to prove its locus standi as creditors and further the building whose owner is the Petitioner Company 1, is not a part of demerged undertaking to be transferred to the Petitioner Company 2. The Applicant have failed to establish as to how their rights will get effected if development rights of Panvel project are transferred.

The Counsel for the Petitioner Companies submits that Petitioner Company 1 is the owner of building Raja Bahadur and there is registered conveyance deed on which stamp duty of Rs 29,75,000/- and registration charges of Rs 30,000/- has been paid in the year 2011-12.

The contents with respect to FIR against the Directors are in personal and not against the Petitioner Company 1 and it has no bearing on the Sanction of the Scheme as the proceedings against the director will continue against him is personal capacity and this does not establish the Scheme against Public Policy and will affect the rights of the tenants of the building.

The Counsel for the Petitioner Companies submits that the claim of Learned Counsel of Raja Bahadur Welfare Association that outstanding liabilities of Rs 1,48,33,407 is due to its tenants and hence they are creditors is entirely false as this amount of outstanding liabilities of Rs 1,48,33407 represents ‘unreconciled amount’ payable to erstwhile owner of Raja Bahadur building from whom the building was acquired by the Petitioner Company 1 viz Okay Estate Developers Private Limited in the year 2010-11. Raja Bahadur Welfare Association or its tenants has nothing to do with the outstanding amount. The Learned Counsel for the Petitioner Companies submits that the Petitioner Company 1 has obtained certificate from auditor certifying and stating that Raja Bahadur Welfare Association is not a creditor of the Petitioner Company 1 and is annexed to reply affidavit.

The allegation as to that Petitioner Company 1 has purchased building by cheating the government authorities is baseless as proper stamp duty and registration charges has been paid by the Petitioner Company 1 and the extract of the property shows that the Petitioner Company 1 is the owner Raja Bahadur Building.

The Counsel for the Petitioner Companies submits that allegation of investigation by Income tax authorities is pending against the Petitioner Company 1 in respect of said Raja Bahadur building is baseless as the Petitioner Companies states that the appropriate notice to Income authorities about the Scheme of Arrangement were given on 25th June, 2020 and again on 28th July, 2020 by the Petitioner Companies and no further queries were raised by  Income  Tax  Authorities.  The  allegation  that  panvel property is only valuable assets in the Petitioner Company 1 is misconceived and baseless as the total assets of the Petitioner Company is Rs 14.19 crores and total assets of demerged undertaking i.e. development rights of panvel project is Rs 0.43 Crores. The Balance of assets remaining after the transfer of demerged undertaking in the Petitioner Company 1 will be Rs 13.76 Crores.

The Counsel for the Petitioner Companies submits that allegation of the Applicant that proper notice had not been served on Raja Bahadur Building is baseless as question of sending Notice to Raja Bahadur Welfare Association does not arise as they are not the creditors of the Petitioner Companies as same can be seen from the certificate issued by auditors certifying and stating that Raja Bahadur Welfare Association is not a creditor of the Petitioner Company 1.

The Counsel for the Petitioner Companies submits that contention of the of the applicant that property is Wakf property and thus alienation or creating any interest in the same is clear violation of Wakf Act and thus the scheme is against the public policy is totally baseless as what is proposed through the scheme is development rights of Panvel property and not the property as the applicants are projecting and in any event the objections if any should ought to be raised by Wakf Board which are also present before this Tribunal.

The Learned Counsel for the Petitioner Companies submit that the scope of proceedings under Sections 230 - 232 of the Companies Act, 2013 are limited and provide for arrangement between companies and its shareholders and creditors. The proceedings do not provide for any intervention by persons other than shareholders, creditors, regulators or other authorities which are likely to be affected by the Scheme.

Findings of the Adjudicating Authorities

Having heard the submissions of both the parties it is seen that the Applicants are neither the Shareholders nor the Creditors of the Company.

Further it is seen that the Objectors/Applicants herein filed an Appeal with Hon’ble NCLAT against the Order dated 17.07.2020 passed by the this Tribunal seeking sanction of the proposed Scheme of Arrangement whereby this Tribunal had directed the Petitioner Companies to publish joint Notice of hearing in two local newspapers with an option to publish the notices online through e-newspaper edition due to the lockdown situation throughout the country in view of the Covid-19 Pandemic.

The NCLAT vide Order dated 20.09.2021 directed the petitioner Companies to serve the Appellants (Applicants) with copy of notice, Company Petition and directed the Adjudicating Authority to take care of the objections of the Applicants before final disposal of the Petition. It is observed here that the Applicant first approached the Hon’ble NCLAT in spite of knowing that the proceedings as to Sanctioning of the Scheme are being heard by the Adjudicating Authority. This itself shows that the Applicants wanted to disrupt and prolong the proceedings before this Tribunal.

Further we are satisfied as to the reply given by the Petitioner Companies to the objections raised by the Applicants, just to derail the proceedings and also the Applicants failed to establish as to how their rights are being affected.

The Sanctioning of the Scheme are independent proceedings and is not under any violation or is not meant to defraud any of its shareholders, creditors etc.

In view of the above CA No. 50 of 2022 is rejected and disposed of. No Orders to costs.

CP No. 945 of 2020 in CA No. (CAA) 4123 of 2019.

The sanction of the Scheme is sought from the Tribunal under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 to the Scheme of Arrangement between Okay Estate Developers Private Limited (Demerged Company) and Grid Infradevelopers Private Limited (Resulting Company) and their respective shareholders for Demerger of the development rights of property at Panvel (Project Division) of Okay Estate Developers Private Limited into Grid Infradevelopers Private Limited.

The Petitioner Company 1 is at present engaged in business of property investment and development activities. The Petitioner Company 2 is at present engaged in the business of builders, contractors, developers, erectors, constructors of buildings, houses, apartments and to acquire land.

The proposed Scheme will have the following benefits:

(a) Enabling focused execution and management approach towards the Project Division in the Resulting Company.

(b) Enabling independent projects to be executed under separate legal entities and avoid overlap of risks of independent projects on each other.

(c) Providing scope for independent financing, investment, security creation and collaboration in the Demerged Company as well as the Resulting Company.

(d) Unlocking the economic value of projects which would enable optimal development of both the Demerged Undertaking and the Remaining Business respectively.

Learned Counsel for the Petitioner Companies states that in pursuance of the Order dated 14th May, 2020 passed by this Tribunal in CA(CAA)/4123/MB-II/2019, meeting of the equity shareholders of the Petitioner Company 1 and Petitioner Company 2 were dispensed with, in view of the affidavits of consent obtained from all the equity shareholders. The meeting of the secured creditors of the Petitioner Companies was not required as there are no secured creditors in the Petitioner Companies. The meeting of the unsecured creditors of the Petitioner Company 1 was not required to be convened as there are no diminution of liability of any creditors and individual notices were given to all the unsecured creditors of the Petitioner Company 1. The meeting of the unsecured creditors of the Petitioner Company 2 was not required to be convened as there are no diminution of liability of any creditors and individual notices were given to sole unsecured creditors of the Petitioner Company 2.

Learned Counsel for the Petitioner Companies submits that the Company Scheme Petition have been filed in consonance with the Order dated 14th May, 2020 passed in CA(CAA)/4123/MB-II/2019 of this Tribunal.

Learned Counsel states that the Petitioner Companies have complied with all requirements as per directions of the Tribunal and they have filed necessary compliance report.

The  Regional  Director  (Western  Region),  Ministry  of Corporate Affairs, Mumbai, has filed his report dated 5th August, 2020 inter alia stating therein that this Tribunal may take this representation on record and consider the observation made in para IV (a) to (g) and pass such other order or orders as deemed fit and proper in the facts and circumstances of the case.

In paragraph IV of the said report, the Regional Director has stated as follows : -

a. In addition to compliance of AS-14 (IND AS-103), the Transferee Company shall pass such accounting entries which are necessary in connection with the scheme to comply with other applicable Accounting Standards such as AS-5 (IND AS-8) etc.

b. As per Part-I –Definitions Clause 2(21.2 & 2.5) of the Scheme,

"Appointed Date" means July 1 2019.

"Operative Date" means the dates on which certified copies of the National Company Law Tribunal’s Order sanctioning this scheme is filed with Registrar of Companies, Mumbai, Any references in this Scheme to “upon this Scheme becoming effective” or ‘upon coming into effect of this Scheme” or “upon the Scheme coming into effect” or “upon this Scheme becoming operative” or “upon coming into operation of this Scheme” shall be constructed to be a reference to the Operative Date; provided however, that such references shall not affect the deemed taking into effect of certain parts of this Scheme, whether prior to, or after, other parts of this Scheme, as specially contemplated herein.

In this regard, it is submitted that Section 232(6) of the Companies Act, 2013 states that the scheme under this section shall clearly indicate an appointed date from which it shall be effective and the scheme shall be deemed to be effective from such date and not at a date subsequent to the appointed date. However, this aspect may be decided by the Hon'ble Tribunal taking into account its inherent powers.

Further, the Petitioners may be asked to comply with the requirements and clarified vide circular no. F. No. 7/12/2019/CL-I dated 21.08.2019 issued by the Ministry of Corporate Affairs.

c. The Hon’ble Tribunal may kindly seek the undertaking that this Scheme is approved by the requisite majority of members and creditors as per section 230 (6) of the Act in meetings duly held in terms of Section 230 (1) read with subsection (3) to (5) of Section 230 of the Act and the Minutes thereof are duly placed before the Tribunal.

d. Hon'ble NCLT may kindly direct the petitioners to file an affidavit to the extent that the Scheme enclosed to Company

Application & Company Petition, are one and same and there is no discrepancy/any change/changes are made, for changes if any, liberty be given to Central Government to file further report if any required;

e. The Petitioners under provisions of section 230(5) of the Companies Act, 2013 have to serve notices to concerned authorities which are likely to be affected by Amalgamation. Further, the approval of the scheme by this Hon'ble Tribunal may not deter such authorities to deal with any of the issues arising after giving effect to the scheme. The decision of such Authorities is binding on the Petitioner Company(s).

f. As per part-IV Clause 14(14.1 & 14.2) change of name of the Demerged and Resulting Company, the name of the Demerged Company shall be changed to “Okay Real Estate Private Limited” or such other name as maybe made available and the name of the Resulting Company shall be changed to “Okay Estate Developers Private Limited” or such other name as maybe made available. In this regards it is submitted that the same is subject to compliance with the provisions of section 13 of the Companies Act, 2013 r/w relevant rule under Companies Rules, 2014 and other applicable provisions of the Companies Act,2013.

g. As both Okay Estate Developers Private Limited (Demerged Company) and Grid Infradevelopers Private Limited (Resulting Company) are engaged in the business of Construction and Real Estate Development/business. Hence, the petitioners be directed to obtain NOC from (RERA) Real Estate Regulation and Development Act, 2016 read with Maharashtra Rules and Regulation 2017;

In response to the observations made by the Regional Director in its Report, the Learned Counsel for the Petitioner Companies submit that the Petitioner Companies have filed an affidavit in response dated 21st January, 2021 (“Affidavit”) with this Tribunal on 25th January,2021 and a copy of the Affidavit has been served on the Regional Director on 21st January,2021.The response of the Petitioner Companies to the observations made by the Regional Director in its Report in their Affidavit are as under.

In so far as observations made in paragraph IV (a) of the Report of Regional Director is concerned, Counsel for the Petitioner Companies submits that the Petitioner Companies shall pass such accounting entries as may be necessary in connection with the Scheme of Arrangement to comply with applicable accounting standards and generally accepted accounting principles to the extent applicable to the Scheme of Arrangement.

In so far as observations made in paragraph IV (b) of the Report of Regional Director is concerned, Counsel for the Petitioner Companies submits that the appointed date i.e. July 1 2019 has been clearly indicated in the Scheme in accordance with provision of Section 232(6) of the Companies and the scheme shall become effective from the appointed date. The Counsel further submits that the Petitioner Companies have already complied with the requirements and clarification of circular no. F. No. 7/12/2019/CL-I dated 21.08.2019 issued by the Ministry of Corporate Affairs by clearly specifying the appointed date in the scheme and hence the question of undertaking for compliance to the requirements of the said circular does not arise.

In so far as observations made in paragraph IV (c) of the Report of Regional Director is concerned, Counsel for the Petitioner Companies submits that, the meeting of the equity shareholders of the Petitioner Companies were dispensed with in view of the consent affidavits obtained from all the equity shareholders of the Petitioner Companies agreeing to the Scheme of Arrangement and placed before this Tribunal. The meeting of the secured creditors of the Petitioner Companies was not required as there are no secured creditors in the Petitioner Companies. The meeting of the unsecured creditors of the Petitioner Company 1 was not required to be convened as individual notices were given to all the unsecured creditors of the Petitioner Company 1. The meeting of the unsecured creditors of the Petitioner Company 2 was not required to be convened as individual notices were given to sole unsecured creditors of the Petitioner Company 2. Since the consents affidavits from all the equity shareholders are placed before this Tribunal the question of placing the minutes of meetings before Tribunal does not arise.

In so far as observations made in paragraph IV (d) of the Report of Regional Director is concerned, Counsel for the Petitioner Companies submits that the Scheme enclosed to the Company Application and the Scheme enclosed to the Company Petition are one & same and there is no discrepancy or deviation.

In so far as observations made in paragraph IV (e) of the Report of Regional Director is concerned, Learned Counsel for the Petitioner Companies submits that the Petitioners have submitted the notices under section 230(5) of the Companies Act, 2013 to (i) the Central Government through the office of Regional Director, Western Region, Mumbai (ii) Registrar of Companies, Mumbai on 23rd June, 2020 (iii) Concerned Income Tax authority on 25th June, 2020. The Petitioner Companies submit that no representations or objections have been received from any of the Regulatory authorities. Further, the approval of the Scheme by this Tribunal may not deter any such authorities to deal with any of the issues arising after giving effect to the scheme and the Petitioner Companies submit that any issues arising out of the Scheme will be met and answered in accordance with the law.

In so far as observations made in paragraph IV (f) of the Report of Regional Director is concerned, Counsel for the Petitioner Companies submits that the Petitioner Companies undertake to comply with the provisions of Section 13 of the Companies Act, 2013 read with the relevant rule(s) of the Company (Incorporation) Rules, 2014 with respect to change of name of the Petitioner Companies. Counsel for the Petitioner Companies further undertakes that name as proposed “Okay Real Estate Private Limited” in clause 14.1 and 14.2 of the Scheme shall be subject to availability at the time of such application before the Registrar of Companies, Mumbai.

In so far as observations made in paragraph IV (g) of the Report of Regional Director is concerned, Learned Counsel for the Petitioner Companies submits that the Project Division proposed to be demerged under the Scheme of Arrangement has not been launched nor any advances are received from customers/buyers and accordingly has not reached stage of being registered with Real Estate Regulatory Authorities under Real Estate Regulation and Development Act, 2016 read with the Rules and Regulations thereunder. Hence the question of giving notice to Real Estate Regulatory Authorities and obtaining NOC from Real Estate Regulatory Authorities does not arise.

Upon perusal of the response of the Petitioner Companies, as stated hereinabove, the office of Regional Director filed a Supplementary Report dated 3rd February,2021with this Tribunal. The Supplementary Report inter alia records that the replies submitted by way of the Affidavit are satisfactory.

From the material on record, the Scheme appears to be fair and reasonable and is not violative of any provisions of law and is not contrary to public policy.

Since all the requisite statutory compliances have been fulfilled, C.P.(CAA)/945/MB-II/2020 is made absolute in terms of prayer clause (a) & (b) of the Company Scheme Petition.

The Scheme of Arrangement is sanctioned hereby, and the Appointed Date of the Scheme is fixed as 1st July, 2019.

The Petitioner Companies are directed to file a copy of this order along with a copy of the Scheme with the concerned Registrar of Companies, electronically in Form INC-28 within 30 days from the date of receipt of the Order duly certified by the Deputy Registrar/ Assistant Registrar of this Tribunal.

The Petitioner Companies are directed to lodge a copy of this order duly certified by the Deputy/Assistant Registrar of this Tribunal, along with the Scheme with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty payable, if any, on the same within 60 working days from the date of the receipt of the certified copy of the Order.

All concerned regulatory authorities to act on a copy of this order duly certified by the Deputy Registrar/Assistant Registrar, of this Tribunal, along with the Scheme.

Any person interested shall be at liberty to apply to the Tribunal in the above matter for any directions that may be necessary.

In view of the above Scheme is Sanctioned. CA 378 of 2021, CA 399 of 2021 stands infructuous, CA 267 of 2021, CA 01 of 2021 and CA 50 of 2022 are rejected and disposed of.

Ordered accordingly.