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of <h1>Court approves company revival scheme despite objections, appoints commissioner for oversight</h1> The court approved the proposed scheme of compromise and arrangement under sections 391-393 of the Companies Act, 1956, for the revival of the company and ... Approval of proposed scheme of compromise and arrangement - commercial viability of the scheme questioned - HELD THAT:- It is not for this court to sit on the commercial wisdom of the scheme. This court is not sitting as an appellate authority to determine the commercial facets of the scheme. Majority of the concerned creditors in terms of Section 391 of the Companies Act, 1956, have in their wisdom approved the scheme with modification by above 75% majority. There are no reason to not accept the scheme. There is no merit in the objections and the same are dismissed. Petition dismissed. Issues Involved:1. Sanctioning of the proposed scheme of compromise and arrangement.2. Objections raised by various stakeholders.3. Waiver of criminal liabilities.4. Concerns about siphoning off funds.5. Appointment of a court commissioner to supervise the scheme.Issue-wise Detailed Analysis:1. Sanctioning of the Proposed Scheme of Compromise and Arrangement:The petition was filed under sections 391-393 of the Companies Act, 1956, seeking the court's sanction for a proposed scheme of compromise and arrangement. The scheme aimed at the revival of the company, completion of the Spire Edge Project, and the Spire Woods Project. The scheme included provisions for the completion of towers E and F of the Spire Edge Project, and the revival of the Spire Woods Project by SW New Developers. The scheme was put up for approval in Company Application CO.APP.(M)115/2016, and various meetings were held as per court orders. The voting results indicated significant approval from different categories of stakeholders, with more than 75% majority in favor of the scheme.2. Objections Raised by Various Stakeholders:Several stakeholders raised objections against the proposed scheme. Key objections included:- Ms. Shikha Sadh argued that the scheme was vague and cryptic, and an attempt to sell off valuable assets under the guise of revival.- Vijay Shankar Pandey, an allottee of the Spire Woods Project, claimed the scheme was against public policy and lacked particulars about the new investor. He also raised concerns about the exoneration of the company's past management from pending litigations.- Ms. Renuka Kulkarni highlighted the need for a fair investigation against the ex-management and expressed concerns about the treatment of investors in Blocks B, C, and D of the Spire Edge Project.- Spire Edge Maintenance Lease & Facilitation Pvt. Ltd. (SELFC) sought better terms for the allottees of Blocks B, C, and D, including refunds and payments for assured returns.3. Waiver of Criminal Liabilities:The scheme included clauses seeking waiver of criminal liabilities for the company and its directors. The court referred to the Supreme Court judgment in J.I.K. Industries Ltd. & Ors. vs. Amarlala V. Jumani & Anr., which stated that offences committed prior to the scheme do not get automatically compounded by the scheme. The court also cited the Division Bench judgment in Krishna Texport Industries Ltd. vs. DCM Ltd., which held that criminal proceedings cannot be kept in abeyance. Consequently, the court did not approve the clauses seeking waiver of criminal proceedings.4. Concerns About Siphoning Off Funds:Objectors expressed concerns that the scheme might be an attempt to siphon off funds and assets of the company. To address this, the court decided to appoint a court commissioner to supervise the implementation of the scheme. This would ensure close monitoring of the scheme's execution and prevent any misuse of the company's funds and assets.5. Appointment of a Court Commissioner to Supervise the Scheme:The court appointed Mr. Justice S. P. Garg (Rtd.) as the Court Appointed Commissioner to supervise the implementation of the scheme. The commissioner would ensure that the tasks stipulated in the scheme are completed expeditiously and in a time-bound manner. An escrow account would be opened for all receipts and expenses related to the scheme, and the commissioner would have the authority to pass directions for its implementation. The court would review the scheme's functioning after three months and could pass further directions if necessary.Conclusion:The court approved the scheme subject to the supervision of a court-appointed commissioner and certain conditions to ensure transparency and accountability. The objections raised were dismissed, and the scheme was sanctioned with modifications to safeguard the interests of all stakeholders. The petition was disposed of with the above directions.
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