Sarda Mines Private Limited Vs

Balraj Joshi, Member (Technical)

The instant application has been filed in the first stage of the proceedings under Section 230(1) read with Section 232(1) of the Companies Act, 2013 (“Act”) for orders and directions with regard to meetings of shareholders and creditors in connection with the Scheme of Arrangement between Kwality Limited ("Demerged Company") and Sarda Mines Private Limited, being the Applicant above named ("Resulting Company") whereby and whereunder the Demerged Undertaking (Softa Undertaking) of the Demerged Company, as defined in the Scheme, together with all property, rights and powers and all debts, liabilities, duties and obligations of the Demerged Company relating to the Demerged Undertaking is proposed to be transferred to and vested in the Resulting Company from the Appointed Date, viz 1st March, 2022 in the manner and on the terms and conditions fully stated in the said Scheme of Arrangement (“Scheme”). The Scheme is annexed as Annexure “A” at pages 22 to 37 of the application.

Ld. Counsel appearing for the Applicant submits as follows:-

(a) The registered office of the Resulting Company, which is the Applicant herein, is situated within the jurisdiction of this Hon’ble Bench. The registered office of the Demerged Company is situated within the jurisdiction of the Hon’ble New Delhi Bench. The Demerged Company has filed a similar application therein which is pending. Both the Companies are unlisted Companies.

(b) The Board of Directors of the Resulting Company and the Demerged Company at their respective meetings held on 17th March, 2022 by resolutions passed unanimously, approved of the said Scheme of Arrangement. The board resolutions of the Resulting Company and Demerged Company are annexed as Annexure “C” at pages 299 to 304 of the application.

(c) The Auditors of the Demerged Company and the Resulting Company have confirmed that the accounting treatment in the said Scheme is in conformity with the accounting standards prescribed under Section 133 of the Companies Act, 2013. The Certificates on such accounting treatment issued by the Auditors of the Demerged Company and the Resulting Company are annexed as Annexure “I” at pages 305 to 307 of the application.

(d) The Applicant has the following classes of shareholders and creditors:

i.Only one class of shareholders, viz Equity Shareholders.

ii. Only one class of creditors, viz Unsecured Creditors. The Applicant does not have any Secured Creditors. This will appear from the certificate of the Chartered Accountants on the classes of shareholders and creditors of the Resulting Company which is annexed as Annexure “J” at page-308 of the application and as pleaded in paragraph 7.8 of the application at page-19 thereof. The lists of shareholders and creditors of the Resulting Company is marked as Annexures “K” and “L” at pages 309-313 of the application.

(e) The Scheme embodies the arrangement between the Demerged Company and the Resulting Company and their respective shareholders. 98.99% in value of the Equity Shareholders of the Resulting Company have already considered the proposed Scheme of Arrangement and given and confirmed their consent to the Scheme in writing by way of affidavits. List of consenting Equity Shareholders of the Resulting Company along with the consent affidavits issued by them are annexed as Annexure “M” at pages 314 to 320 of the application.

(f) No change in value or terms or any compromise or arrangement is proposed under the Scheme with any of the creditors of the Demerged Company and the Resulting Company. The Scheme does not involve any capital or debt restructuring. As such, there is no compromise or arrangement between the Applicant and its creditors and there is no requirement of convening and holding meetings of creditors of the Applicant under Section 230(1) read with Section 232(1) of the Companies Act, 2013.

(g) Without prejudice to the aforesaid, Ld. Counsel submits that the Applicant have, in any event, obtained consents by way of affidavits of 90.73% in value of the Unsecured Creditors of the Applicant. List of consenting Unsecured Creditors of the Resulting Company along with the consent affidavit issued by them to such effect are annexed as Annexure “N” at pages 321 to 324 of the application.

Orders and directions are sought accordingly for dispensing with meetings of the Equity Shareholders and Unsecured Creditors of the Applicant with a direction for filing of confirmation petition by the Applicant under Section 230(6) read with Section 232(3) of the said Act for obtaining sanction of this Hon’ble Tribunal to the Scheme and (c) service of notices on the Statutory Authorities pursuant to Section 230(5) of the Companies Act, 2013.

Upon perusing the records and documents in the instant proceedings and considering the submissions made on behalf of the Applicant, we allow the instant application and make the following orders:-

(a) Meetings of the Equity Shareholders and Unsecured Creditors of the Applicant are dispensed with under Section 230(1) read with Section 232(1) of the Act in view of the consents given to the Scheme, as aforesaid by the said Equity Shareholders and Unsecured Creditors of the Applicant.

(b) The Applicant shall file its confirmation petition for sanction of the Scheme under Section 230(6) read with Section 232(3) of the said Act within three weeks from the date of receiving this order.

(c) Notice under Section 230(5) of the Companies Act, 2013 along with all accompanying documents, including a copy of the aforesaid Scheme and statement under the provisions of the Companies Act, 2013 shall be served on the Regional Director, Eastern Region, Ministry of Corporate Affairs, Kolkata; Registrar of Companies, Kolkata; and Income Tax Department having jurisdiction over the Applicant, by sending the same by hand delivery through special messenger by post & email within two weeks from the date of receiving this order. The notice shall specify that representation, if any, should be filed before this Tribunal within 30 days from the date of receipt of the notice with a copy of such representation being simultaneously sent to the Advocates of the said Applicant. If no such representation is received by the Tribunal within such period, it shall be presumed that such authorities have no representation to make on the said Scheme of Arrangement. Such notice shall be sent pursuant to Section 230(5) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Compromises, Arrangements and Demergers) Rules ,2016 in Form No. CAA3 of the said Rules with necessary variations, incorporating the directions herein.

The Applicant to file an affidavit proving service of notices, as aforesaid, within a period of two weeks from the date of dispatch thereof.

The Company Application being C.A.(CAA)No.106/KB/2022 is disposed of accordingly.

Urgent certified copies of this order, if applied for, be supplied to the parties upon compliance of all requisite formalities.