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of <h1>Tribunal grants CLE Private Limited's request, approves Scheme without share transfer.</h1> The Tribunal disposed of the case in favor of CLE Private Limited, allowing their alternative relief request to sanction the Scheme excluding the transfer ... Sanction of composite Scheme of Arrangement for Amalgamation and Demerger - transfer of shareholding - HELD THAT:- The learned senior counsel appearing for the respondents in the CA, who are the petitioners in the CP, at the outset, submitted that notwithstanding to what is submitted in the above referred affidavits filed on behalf of the petitionercompanies since the issue of transfer of the shareholding in the Roseland Buildtech Private Limited and its four subsidiary companies is a very minor part of the scheme and that the Note 2 with reference to the Roseland Buildtech Private Limited is not an integral part of the scheme, the petitioner-companies have no objection if the CA is disposed of in terms of the alternative relief as per Para 18(b) of the CA i.e. sanctioning the scheme sans Serial No.47 i.e. Roseland Buildtech Private Limited and the Note 2 thereon in Part IV of the Schedule. The instant CA can be disposed of in terms of the alternative relief at Para 18 (b) and without going into the rival contentions - Application disposed off. Issues Involved:1. Intervention by CLE Private Limited in the Composite Scheme of Arrangement.2. Objections to the transfer of shareholding in Roseland Buildtech Private Limited.3. Compliance with the Articles of Association and Loan Agreement.4. Impact on Roseland Buildtech Private Limited’s ability to service loans.5. Validity of Note 2 in the Scheme of Arrangement.6. Locus of CLE Private Limited to oppose the Scheme.Detailed Analysis:1. Intervention by CLE Private Limited in the Composite Scheme of Arrangement:CLE Private Limited sought to intervene in the Composite Scheme of Arrangement involving Anant Raj Agencies Private Limited, Anant Raj Limited, and Anant Raj Global Limited. CLE Private Limited, holding 50% of the equity capital in Roseland Buildtech Private Limited (RBPL), opposed the Scheme on the grounds that it would alter the shareholding pattern of RBPL, which they argued was ultra-vires the Articles of Association of RBPL and violated the terms of the Loan Agreement and Undertaking.2. Objections to the transfer of shareholding in Roseland Buildtech Private Limited:CLE contended that the proposed Scheme intended to transfer Anant Raj Limited's (ARL) 50% shareholding in RBPL to Anant Raj Global Limited (ARGL), which would severely hamper RBPL’s ability to service and repay loans. CLE argued that this transfer was not permissible under the existing agreements and would adversely affect RBPL and its subsidiaries' business operations.3. Compliance with the Articles of Association and Loan Agreement:CLE highlighted that the proposed Scheme violated the Articles of Association of RBPL and the terms of the Loan Agreement dated 31 October 2006, along with subsequent modifications. The Scheme’s intention to transfer ARL’s investment in RBPL and its subsidiaries without the consent of RBPL’s shareholders was claimed to be in direct contravention of these agreements.4. Impact on Roseland Buildtech Private Limited’s ability to service loans:CLE emphasized that the demerger of ARL’s ‘Project Division,’ including its investment in RBPL, would negatively impact RBPL’s financial stability and its ability to service existing loans. CLE pointed out that RBPL’s subsidiaries were significant contributors to its income, and the proposed transfer of ARL’s investments in these subsidiaries would disrupt RBPL’s revenue stream.5. Validity of Note 2 in the Scheme of Arrangement:The petitioner-companies clarified that Note 2 in the Scheme was an expression of intent for future transactions, subject to requisite approvals. They asserted that Note 2 was not an integral part of the Scheme and did not affect the share entitlement ratio. The petitioner-companies stated that the transfer of assets or investments of RBPL and its subsidiaries would be subject to separate approvals and were not part of the current Scheme.6. Locus of CLE Private Limited to oppose the Scheme:The petitioner-companies challenged CLE’s locus to oppose the Scheme, stating that CLE was neither a shareholder nor a creditor of the petitioner-companies. They argued that the Scheme only involved the transfer of ARL’s shareholding in RBPL and did not affect the assets or liabilities of RBPL or its subsidiaries. The petitioner-companies reiterated that the Scheme’s sanction would not prejudice the rights of any other party, including CLE.Conclusion:The Tribunal, after hearing both parties, noted that the petitioner-companies had no objection to disposing of the CA in terms of the alternative relief sought by CLE, which was to sanction the Scheme excluding the transfer of ARL’s shareholding in RBPL (Serial No.47) and the related Note 2. Consequently, the Tribunal disposed of CA No.43/2020 in terms of the alternative relief claimed under Para 18(b) of the CA, without delving into the rival contentions.
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