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Judgment
ORDER
Oral Judgment: Justice Sharad Kumar Sharma, Member (Judicial)
This Company Appeal, has been preferred by the Appellants, questioning the propriety of the Impugned Order dated 25.01.2023 as it has been passed by the learned NCLT, Chennai Bench in CP(CAA)/34(CHE)/2022 as preferred in CP(CAA)108(CHE)/2021. The consequential effect of the impugned order has been that, the proceedings, which was being carried under Section 230 to 232 of the Companies Act, 2013, in the matters of the approval of the Scheme of Arrangement, between Pillayar Investments and Finance Private Limited, the demerged company and Dilipkumar Enterprises Private Limited, the resulting company-1 and Manjulavasanth Enterprises Private Limited, also the resulting company-2, has resulted in rejection of the said scheme.
The proposed Scheme of Arrangement has been rejected by learned NCLT, Chennai on the ground, which has been recorded by the learned Tribunal in para 3 of the impugned order, that the Scheme of Arrangement, as presented under Section 230 to 232 of the Companies Act, 2013 and its applicable provisions thereon, does not have clear description of the steps involved in the scheme and that it lacks clarity about, which part of the demerged company is vesting with which resulting company. Besides that, the Impugned Order records that Clause (b) of the proposed Scheme of Arrangement, under the title “Parts of the Scheme”, as contained in page 22 of the application, further enhances the ambiguity, as to, which parts of the demerged undertaking is vesting with which resulting company. It further records that, Clause 5.1 of part II of the scheme and Clause 5.1(b) of the scheme are not precise in respect of distribution of assets among the Resulting Companies 1 and 2. Hence, the learned Tribunal has come to the conclusion that the scheme lacks clarity and is not precise, and the clauses contained under the Scheme of Arrangement are not precise, are obscure and need clarity.
Based on the above findings, the learned Tribunal has concluded that, it is constrained not to proceed further with the Company Petition in its present shape and accordingly proceeded to reject the Company Petition. However, in the concluding part of the Impugned Order, the learned Tribunal observed that, the it would be left open for the petitioners to file a proper petition containing a scheme of arrangement in a better and clearer form, for its consideration.
When the Company Appeal was taken up today, since all the parties who were appearing, were in unanimity that, this Company Appeal may be allowed and the impugned order of 25.01.2023, refusing acceptance of the Scheme of Arrangement may be quashed and the matter may be remitted back to the learned NCLT to reconsider the Scheme of Arrangement, with necessary amendments which is to be furnished by the parties to the appeal and that it may be left open for the learned Tribunal to decide the same afresh in accordance with law. Owing to the fact that, there has been a consensus and coupled with the fact that, since the Tribunal itself has left it open for the parties to refile a proper petition for the Scheme of Arrangement, the impugned order dated 25.01.2023 would hereby stand quashed, subject to the following conditions: -
The matter is remitted back before the learned NCLT, Division Bench, Chennai, wherein the parties to the appeal would be furnishing a fresh Scheme of Arrangement, as early as possible, but not later than 6 weeks from date of uploading of order, which satisfies the terms and conditions as contained under Section 230 to Section 232 of the Companies Act, 2013.
The Scheme of Arrangement, which is to be thus intended to be submitted in compliance of the Impugned Order, the Appellants would ensure that, whatsoever discrepancy the Scheme suffered earlier and as well the ones that were pointed out by the learned Tribunal in the impugned order, those are rectified and that the scheme to be presented before the leanred NCLT provides clarity in its arrangement particularly qua, the distribution of the assets and other liabilities, among the Resulting Companies.
The matter is remitted back to the learned NCLT to reconsider the fresh Scheme of Arrangement, which has to be submitted by the Appellants after meeting out all the shortcomings, which has been pointed out in the impugned order dated 25.01.2023, and that if the same is furnished in accordance with law within a period of six weeks from the date of uploading of this Order, the same would be considered by the learned Tribunal, strictly in the light of the provisions contained under Section 230 - Section 232 of the Companies Act, 2013 for passing of an appropriate decision as permissible under law. Subject to the aforesaid, the Company Appeal stands allowed and disposed of with the directions contained herein above. All pending Interlocutory Applications would stand closed.