2017 (12) TMI 1605 - Tri - Companies Law

Tribunal Grants Application for Reconvening Secured Creditors' Meeting, Emphasizes Compliance

The Tribunal allowed the Application for reconvening the meeting of Secured Creditors of Applicant Company No. 1. The reconvened meeting was ordered to be ... Reconvening of meeting of Secured Creditors of the Applicant Company No. 1 - Held that:- As seen from the averments made in the Application as also the report of the independent Chairperson appointed to chair the meeting, that the Applicants had complied with the directions of this Tribunal in calling the meeting as well as in relation to the convening of the said meeting of Secured Creditors by Applicant Company No. l on the date fixed by this Tribunal. In view of the absence of any Secured Creditors, the meeting was not able to be held. It is also evident from the report of the Chairperson dated 24.11.2017 as well as averred in the Application that Small Industrial Development Bank of India being one of the Secured Creditors in relation to Applicant Company No. 1 had sent its representative, however, subsequent to the time prescribed for holding the meeting. It is also further stated that the representative of SIDBI did not have proper authorization to attend the meeting. Thus, it is seen that the holding of meeting has not occasioned due to the fault of the Applicants in complying with the directions of this Tribunal on 6.10.2017 but on the other hand due to reasons beyond its control. Reference to the provisions of Companies Act, 2013 read with Companies (Arrangement and Amalgamation) Rules, 2016 more particularly Rule 24 of the Rules as well as taking into consideration the inherent powers as vested with this Tribunal by virtue of Rule 11 of NCLT Rules, 2016 and as no prejudice will be caused to any party if the meeting is directed to be reconvened, as it will only enable the secured creditors to express their assent or dissent to the proposed Scheme, this Tribunal orders for a reconvening of the meeting of the Secured Creditors of Applicant Company No. 1 Issues: Reconvening of meeting of Secured CreditorsAnalysis:1. The Application was filed by the Applicant Companies seeking the reconvening of the meeting of Secured Creditors of the Applicant Company No. 1 as directed by the Tribunal previously. The meeting was not able to be held due to the absence of any Secured Creditors, as confirmed by the report of the Chairperson.2. The Tribunal considered the plea of the Applicants and noted that the Applicants had complied with the directions in calling the meeting, but it could not be held due to the absence of any Secured Creditors, including one representative of Small Industrial Development Bank of India who attended after the prescribed time without proper authorization.3. Referring to the Companies Act, 2013, and the Companies (Arrangement and Amalgamation) Rules, 2016, particularly Rule 24, the Tribunal invoked its inherent powers under Rule 11 of NCLT Rules, 2016. As no prejudice would be caused, the Tribunal ordered the reconvening of the meeting to enable the Secured Creditors to express their assent or dissent to the proposed Scheme.4. The reconvened meeting of Secured Creditors of Applicant Company No. 1 was ordered to be chaired by Mr. Rajiv Kumar, with Mr. Man Sumer Singh as the Alternate Chairperson and Scrutinizer. Specific terms and conditions were laid out for the reconvened meeting, including the quorum, venue, fees of the Chairperson and Alternate Chairperson, notice requirements, and compliance with Companies Act, 2013 provisions.5. The Tribunal directed the Applicants to fulfill all formalities required for the reconvened meeting, including sending individual notices, explanatory statements, proxy forms, and the scheme of amalgamation to all Secured Creditors. Additionally, publication of the notice in specified newspapers was mandated at least 30 days before the meeting date.6. The Application was allowed by the Tribunal on the specified terms, ensuring that the reconvened meeting of Secured Creditors of Applicant Company No. 1 would be conducted in accordance with the prescribed procedures and regulations.This detailed analysis covers the issues involved in the judgment regarding the reconvening of the meeting of Secured Creditors as per the Tribunal's order and the compliance requirements set forth for the Applicants.