Learned Senior Counsel Mr. Navin Pahwa appeared for the Applicant. Comp. Application 1/21 is led by the Applicant under Section 420 1.Wr 154 ofNCLT Rules for rectication of our order dated 18.12.2021. WE perused the application. We heard Learned Counsel for the applicant. The application is allowed in terms of prayer clause 8 by replacing 8(a), (b) and (c) for necessary modication in relevant paragraphs. The modied order be uploaded. Comp. Application 1/21 is allowed and stands disposed of. / (V IREND MAR GUPTA) (MADA GOSAVI) MEMBER CHNICAI.) MEMBER (JUDICIAL) Dated this the 19th d 'ofJanuary_ 2021. CA1CAA) No.83 mac-232 /NCLT/AHM /2020 THE NATIONAL COMPANY LAW TRIBUNAL AHMEDABAD BENCH COURT NO. 1 CAICAA) No.B3/230-232/NCLT/AHM/2020 [An Application filed under Section 230-232 of the Companies Act, 2013] GSEC Green Energy Private Limited (Unsecured Creditors of the Steel Konnect Pvt. Ltd] registered office at:
15 floor, Udhyog Bhavan, Opp Kunal Restaurant, Ashram Road, Ahmedabad-SSOOOQ ...Applica_nt. Order reserved on 16.12.2020 Order Pronounced on 18.12.2020 Cox-am: Honb1e Mr. Madan B. Gosavi, Member (J) Honble Mr. Virendra Kurnar Gupta, Member (T) Aggearance: Learned Senior Counsel Mr Navin Pahwa appeared for the Applicant ORDER [PER BENCH]
1. The present application is led by the Applicant Company being the Unsecured Creditor 0f the Corporate Debtor i.e. Steel Konnect Private Limited u/s. 230 of the Companies Act 2013 (for short the Act) r/W. Rule 3 of the Companies (Companies Arrangements and Amalgamation) Rules, 2016 (for short the Rules) for the purpose of convening meetingsoftlrymbers and I 1' u g c CA(CAA) No.83/2307232/NCLT/AHM/2020 creditors of the Applicant Company as well as the Corporate Debtor The applicant has made further prayed for further reliefs as contained in Prayer Clause (B) and (C) which read as under:- (B) This Hon'ble Adjudicating Authority may he pleased to order exclusion of the period of'lockdowrt and be further pleased to grant extension of the period between the day lockdown came to be lifted until the date ofling ofthe present application and befurther pleased to grant further extension of a period of 90 days for the purpose of approval of the Composite Scheme of Compromise and/or Arrangement proposed between Steel Konnect Private Limited (in Liquidation) with their members and creditors. in the interest ofjustiee and equity (C) This Hon'ble Adjudicatirtg Authority may be pleased to order suspension of the liquidation proceedings pending the consideration and approval of the Composite Scheme of Compromise and/0r Arrangement proposed between Steel Konnect Private Limited with their shareholders and creditors, by this Hon'ble Tribunal, in the interest of justice and equitv; " The applicant relies upon the judgment and order dated 842019 made by thc Hon'blc National Company Law Appellate Tribunal in Company Appeal (AT) No.337 of 2018 to submit that persons referred to in Section 230 of the Companies AcL 2013 which include members and creditors besides the Liquidator can also maintain proceedings of presenting a Scheme before this Tribunal for revival even in relation to a Company in Liquidation Reliance is placed in particularto Paras ll and l2 ofthe said judgment.
11. The learned Counsel for the Appellant relied on the Judgement in the matter of Vasant Investment Corporation Ltd. "reported in 1978 SCC OnLine Born 151 and Judgement in the matter of Rajendra Prasad Agarwalla & Ors. Versus The Official liquidator, High Court " reported in 1977 SCC OnLine Cal 189, which Judgements along with others were considered by the Hort'ble High Court ofDelhi in the matter of National Steel & General Mills Versus Official Liquidator" reported in 1989 SC C ()nLine Del I I 8. The Judgements dealt with the above provision under Section 39] of the old Act. Inpara i 10 ofthe Judgement afDivision Bench of the Ilon'ble High 2llngc CALCAA] No.83/230-232/NCLT/AHM/2020 Court otvDelhi, it was observed.- "lll. The consensus view of the various High Courts, therefore emerges is that the liauidator is the additional person and not the exclusive person who can move an application under Section 391 of the Act. " In para i I8, it was mentioned:- I 8. There does not seem to be much substance in this argument. As already discussed above, the liquidator is an additional person who can make on application under Section 391 of the Act for compromise or settlement of the scheme and under Section 457 oft/1e Act the liquidator has been given a general power in the company being wound up with the sanction of the Court to institute or defend any suit, prosecution, or other legal proceedings and as such there is no inconsistency between the two provisions Further this general power has been conferred on the liquidator with the sanction of the Court only. This does not take away the special power of the member, creditor and the company to move the Court for compromisc/arrangement under Section 39] ofthe Act without sanction ofthe Court as general power cannot take away and prevail over the special power. The Counsel for the Appellant further relied on Judgement in the matter of "Meghal Homes (P) Ltd. Versus Shree Niwas Girni KK. Samlti" (2007)
7 SCC 753 in which ii was observed in para i 33 and 34 as under. e
3. The argument that Section 39] would not apply to a company which has already been ordered t0 be wound up, cannot be accepted in view of the language ofSection 391(1) thhe Act, which speaks of a company which is being wound up. If we substitute the denition in Section 390ml of the Act, this would mean a company liable to be wound up and which is being would up. 1t also does not appear to be necessary to restrict the scope of that provision considering the purpose for which it is enacted, namely, the revival of a company including a company that is liable to be wound up or is being wound up and normal/s. the attempt must be lo ensure that rather than dissolving a company it is allowed to revive. Moreover. Section
3 t P CA(CAA] N0.83/230e232/NCLT/AHM/2020 391(I)(b) gives a right to the liquidator in the ease ofa company which is being wound up. lo propose. a compromise or arrangement with creditors and rnernbers indicating that the provision would apply even in acase where an order of winding up has been made and a liquidator had been appointed. Equally, it does not appear to be necessary to go elaborately into the question whether in the case of a company in liquidation, only the Oicial Liquidator could propose a compromise or arrangement with the creditors and members as contemplated by Section 391 of the Act or any Qt the contributories or creditors also can come forward with such an application.
34. By and large, the High Courts are seen to have taken the view that the right of the Official Liquidator to make an application under Section 39] ofthe Act was in addition to the right inhering in the creditors, the contributories or members and the power need not be restricted to a motion only by the liquidator. For the purpose of this case, we do not think that it is necessary to examine this question also in depth. We are inclined to proceed on the basis that the Somanis, as contributories or the members of the ion/pony. are entitled t0 make an application to the Company Court in terms of Section 391 of the Act for the purpose of acceptance of a compromise or arrangement with the creditors and members. " I2. We nd that Judgement in the matter of "Rajiv Sachdeva" could be relevant while examining the merit of the scheme proposed but the said Judgement is not helpful to consider whether the Impugned Order is right in its View that only the liquidator couldapply. The Judgement in the matter of "National Steel & General Mills Versus Official Liquidator" (referred supra) makes it quite clear that Liquidator is only an additionalperson and not exclusive person who can move application under Section 3 9] of the old Act when the company is in liquidation. Looking to these Judgements, we are unable to support the view taken by NCLT that the Appellant could not have led the Petition under Section 39/ ofthe oldAct. " Mis. Steel Konncct Private Limited (the Company in Liquidation) is a Private Limited Company. The authorized share capital oflhe HP/sac clue/m) No.83/230-232/NCLT/AHM/2020 Company in Liquidation as on 31.3.2019 as Rs. 56.00.00.000/-. The issued subscribed and paid-up capital of the Company in Liquidation as on 31.3.2019 was also Rs. 56.00.00.000,- lVl/s. GSEC Green Energy Private Limited is a priyate limited company and unsecured creditor of the Company in Liquidation. The authorized share capital of the Applicant Company as on 31.3.2020 is Rs. 1,001000/2 The issued. subscribed and paid up share capital of the Applicant Company as on 31.3.2020 is also Rs. 1,00,000-. The Board ofDirectors ofthe Applicant Company vide resolution dated 21>" August. 2020 has approved the Scheme of Arrangement lt is submitted that by an order dated 19142017 made by this Adjudicating Authority in CP (1B) No.5 of 2017. CIRP commenced. Subsequently by order dated 28.1.2020 made in I.A. No.33 of 2018 in CP (1B) N05 of 2017. this Adjudicating Authority passed order of liquidation. This Company Application is led by the Unsecured Creditor of the Company in Liquidation. By way of the proposed Scheme 0f Arrangement in the nature of compromise with the shareholders and secured creditors of Steel Kormeet Private Limited, it is provided inter alia for repayment of outstanding dues of the creditors in accordance with the proposed Scheme of Compromise. The said Scheme was placed before the Stakeholders Consultation Committee for their consideration in the meeting held on 17.10.2020 wherein the members of the Committee discussed the revised Scheme and also agreed to consider the Scheme subject to further upward revision under the proposed Scheme. 1t is submitted that the applicant thereafter submitted revised scheme with enhanced amount and also prompt payment terms to the liquidator. The Scheme provided for revised nal offer of Rs. 37.41 Crores for payment under the Scheme. The 3'1!ch CA(CAA] N0.83/2307232/NCLT/AHM/2020 Liquidator circulated this nal revised scheme to the members ot the Stakcholders Consultation Committee through email dated 21.10.2020. The applicant has averred in Para 19 of the application that upon receipt of the nal revised schcmc, the Liquidator has advised thc applicant to takeout appropriate proceedings before this Tribunal seeking appropriate orders. According to Scc. 230 of the Act. meetings of various stakeholders oi both the Companies are required to be held. The Company in Liquidation has 4 equity shareholders. 15 operational creditors and 4 secured nancial creditors. The Applicant has sought directions to hold and convene the meetings of above mentioned stakeholders 01-1116 Company in Liquidation. The Applicant Company has two equity shareholders and four unsecured creditors. The applicant Company does not have any secured creditors. The applicant has placed reliance on certicate of the CA dated 30.12.2020 in support of this contention. Heard Mr. Navin Pahwa. Learned Senior Advocate appearing with Mr. Ravi Pahwa, Learned Advocate for the Applicant Company. Learned Senior Counscl has submitted that as can be seen from the judgment rendered by the Hon'hle National Company Law Appellate Tribunal. thc applicant being unsecured creditor of the C ompany in Liquidation can also submit a Scheme for Compromise and revival. The said judgment also considers judgments of various Hon'ble High Courts and also thejudgment of the Ilon'ble Supreme Court rendered in thc case oFMeg/iul Homes (P) Ltd. vs. Shrim'wus Girni KK Sumitlee. (2007) 7 SCC
753. ln view ofthie decision of thc 110nb1c NCLAT. we hold that this application is maintainable. CA(CAA) No.83/230-232/NCLT/AHM/2020 The Learned Senior Counsel also submits that although Regulation 2B of the lBBl (Liquidation Process) Regulations. 2016 (for short the Liquidation Regulations) provide that a compromise or arrangement proposed uts. 230 of the Companies Act. 2013 shall be completed within 9t) days of the order of liquidation u/s. 33(1) and (4) 01' the 1B Code, on account of the prevailing pandemic situation. the Scheme could not be presented Within the time as stipulated in the Regulation. The Learned Counsel however relies upon Regulation 47A ol the Liquidation Regulations to submit that the time line to conduct the liquidation process would exclude the period of lockdomt imposed by the Central Government in the wake of Covid-l9 outbreak. It is further submitted that some time is also consumed by the Stakeholders Consultation Committee to consider the Scheme. lt is submitted that the scheme was presented to the liquidator who in turn submitted to the Stakeholders Consultation Committee which suggested certain revisions in the Scheme before it could be tinall} considered for the purpose of compromise and revival. The Learned Senior Counsel therefore submits that considering the totality of facts and circumstances, the present pandemic situation and the fact that the proposed Scheme is for the revival ofthe Company in Liquidation the rclicf prayed in Prayer Clause (B) may be considered. The Learned Senior Counsel further submits that during the time that the Scheme is under consideration and approval before this 'l ribunai. the Liquidation proceedings may remain suspended. Considering the pray er ol the Applicant Company. this Tribunal directs to convene and hold meetings of all stakeholders 0f both the Company in Liquidation and the Applicant Company with the following directions:-
i. The Company in Liquidation is directed to convene and hold individual meetings of Financial Secured Creditors. TlPagi
iii. CA(CAA) No.83/230-232/NCLT/AHM/2020 Operational Creditors and Equit} Shareholders. on 191 day of Januar). 202] at 11:00 am 5:00 p.m. and 3:00 p.m. respectively at 2" Floor. Guiarat Chambers Building. Ashram Road. Ahmcdabad-BXOUO) tor the purpose of considering and it~ thought t. approving. with or \vithout modication, the Scheme ot'Arrangemcnt. The Applicant Company is directed to convene and hold individual meetings of Equity Shareholders, Unsecured Creditors and on 19h day of January. 2021 at 12:00 p.m.. 2100 p.111. and 4:00 p.111. respectively at 2"d Floor. Gujarat Chambers Building. Ashram Road. Ahmedabad- 380009 [or the purpose of considering and if thought t, approving. with or without modication, the Scheme of Arrangement. At least one month before the date of the aforesaid meetings, an advertisement about convening of thc said meetings, indicating the date. mode and time as aforesaid. shall be published in Financial Express English Daily and Financial Express Gujarati Daily, having circulation in Ahmedabad. The publication shall indicate the time Within which copies of the Scheme of Arrangement shall be made available to the concerned persons free of charge from the registered office of the Applicant Company as well as Company in Liquidation. The publication shall also indicate that the statement required to be furnished pursuant to Section 102 oi the Act read with Sections 230 to
232 of the Act can be obtained l'ree of charge from the registered ofce of the Applicant Company and Company in Liquidation or at the ofce oi its adwcates \iY. 'l'hakkar and Pahwa. Advocates. 71. New York Tower-A. Opp. Muktidham Derasar. 'I'haltej. Ahmcdabad-380054r In addition. at least one month before the date of the aforesaid meetings of Fquit} Shareholders and Unsecured Creditors in case of Applicant Company and meetings of s t r' l L, < CAiCAA] No.83/2307232/NCLT/AHM/2020 Equity Shareholders. Operational Creditors and Financial Secured Creditors in case of Company in Liquidation to be held as aforesaid. a notice convening the said meetings indicating the day. date and time aforesaid. together with a copy of the Scheme of Arrangement a copy of the statement required to be furnished pursuant to Section l02 of the Act read with Section 230 to 232 ofthe Act and Rule
6 of the Companies (CAA) Rules. 2016 shall bc sent to each of the Equity Shareholders, Secured Creditors and Unsecured Creditors in case of Applicant Company and meetings of Equity Shareholders, Operational Creditors and Financial Secured Creditors in case ot Company in Liquidation. at their respective registered or last known addresses either by registered post orspccd post or air mail or by courier or by e-mail 0r hy hand delivery. The notices shall be sent to all the Equity Shareholders, Secured Creditors and Unsecured Creditors in case of Applicant Company and meetings of liquity Shareholders, Operational Creditors and Financial Secured Creditors in ease ofCornpany in Liquidation with reference to the list of Equity Shareholders. Secured Creditors and Unsecured Creditors in case of Applicant Company and meetings of Equity Shareholders, Operational Creditors and Financial Secured Creditors in case of Company in Liquidation, as per the records of Company in Liquidation. Shri Ravi Kapoor. Practicing Company Secretary. shall be the Chairperson of the meetings of Equity Shareholders and Unsecured Creditors in case of Applicant Company and meetings of Equity Shareholders. Operational Creditors and Financial Secured Creditors in case 01~ Company in Liquidation t0 be held on 19th January 2021 and in any adjourned meeting(s) within 45 days from the date of receipt of this order. Shri Viral Ranpura, practicing Company Secretary is 91l1=;c
viii. CA(CAA) No.83/230-232/NCLT/AHM/202O appointed as Scrutinizer for the said meetings to scrutinize the e-voting during the meetings and remote e-yoting process in a fair and transparent manner. The Chairperson appointed for the aforesaid meetings shall issue ad\ertisements and send out notices of the meetings referred to above. The Chairperson is free to avail the services of Applicant Company and Company in Liquidation or any agency for carrying out the aforesaid directions. The Chairperson shall have all powers under the Articles of Association of Applicant Company and Company in Liquidation and also under the Rules in relation to the conduct ofmeetings, including for deciding any procedural question that may arise at the meetings or adjournment thereof proposed at the said meetings, amendment(s) to the aforesaid scheme or resolutions. if any. proposed at the aforesaid meetings by any personts) and to ascertain the decision of the sense of the meetings of Equity Shareholders and Unsecured Creditors in case of Applicant Company and meetings of Equity Shareholders. Operational Creditors and Financial Secured Creditors in case of Company in Liquidation. The number and value of Equity Shareholders. Unsecured Creditors in ease of Applicant Company and meetings of Equity Shareholders. Operational Creditors and Financial Secured Creditors in case of Company in Liquidation shall be in accordance with the records or registers of Applicant Company and Company in Liquidation and where the entries in the records or registers are disputed. the Chairperson of the meetings shall determine the value. as the case ma) be. for the purposes ofthe meetings. The Chairperson shall le an affidavit not less than 7 (seven) days before the date xed for holding of the meetings and to report to this Tribunal that the directions regarding issuance of notices and advertisements ot
10 in CAtCAA) No.83/2307232/NCLT/AHM/202O meetings hanc been duly complied with as pcr Rule 12 of Companies (CAA) Rules, 2016. It is further ordered that the Chairperson shall report to this Tribunal on the results of the meetings in Form CAA
4. veried by his affidavit. as per Rule 14 oiithe Companies (CAA) Rules, 2016 in Form CAA 4 within 30(Thirty) days of the conclusion oi the meetings. In compliance of sub~section (5) of Section 230and Rttle 8 of the Companies (CAA) Rules, 2016, a notice of meetings under sub-section (3) of Section 230 read with Rule 6 of the Companies (CAA) Rules. 2016 in Form No. CAAB along with a copy ol the Scheme of Arrangement, explanatory statement and the disclosures mentioned under Rule 6 shall be sent to (i) the Central Government through the Regional Director, North Western Region. (ii) The Registrar of Companies, Gujarat and (iii) The Income TaX Authorities stating that the representations. if any. to be made by them shall be made within a period of 30 days from the date of receipt of such notice, failing which it shall be presumed that they have no objection to make on the proposed Scheme of Arrangement. The said notice (s) shall bc sent forthwith after notice is sent to the L'quity Shareholders. Secured Creditors and Unsecured Creditors in ease of Applicant Company and meetings of Equity Shareholders. Operational Creditors and Financial Secured Creditors in case 01' Company in Liquidation by registered post or by speed post or by courier or by Email or by hand deli\ ery at the office of the authority as required by sub- rule (Z) 0f Rule 8 of the Companies (CAA) Rules, 2016. T he aforesaid authorities, who desire to make any representation under subsection (5) of Section 230 shall send the same to the Tribunal Within a period of 30 days from the date of receipt of such notice. failing which it shall be deemed that they have no representation to make llllltt:t' CA(CAA| No,83/230232/NCLT/AHM/2020 on the proposed Scheme ofArrangement,
l), This Tribunal also considers appropriate to grant relief prayed in Pra)cr Clause (B) ofthe application considering the suhmissions made by the Learned Senior Counsel and in particular considering the fact that the Scheme ultimately u ould result into revival of the Compan) in Liquidation.
16. This Tribunal also considers appropriate to grant relief prayed in Prayer Clause (C) of suspending the liquidation proceedings pending the consideration and approval of the Scheme of Compromise as any continuation of the liquidation proceedings would hamper the process of revival of the Compan) in Liquidation However we clarify that in case this scheme of compromise is not approved, the liquidation proceeding would again commence thereafter.
17 SubjeCt to above order and directions. the present application is disposed (VIRENDRA l AR GUPTA) MEMBER (T HNICAL) MEMBER (JUDICIAL) izim