2021 (3) TMI 1009 - AT - Companies Law

NCLT restores original appointed date, extends compliance period in scheme appeal.

The tribunal concluded that the modification of the appointed date by NCLT, Mumbai was unwarranted. The original appointed date of 07.10.2017 was ... Sanction of scheme of amalgamation - Sections 230 to 232 of the Companies Act, 2013 - HELD THAT:- It is clear that the Appellant Company has fulfilled all the requisite statutory compliances. However, Ld. NCLT modified the Appointed date considering the valuation report which is subsequent to the Appointed date. While modifying the Appointed date Ld. NCLT has not considered that the Appointed date 07.10.2017 is approved by the NCLT, Delhi vide order dated 22.10.2019 passed in CP No. CAA/144/ND/2018 in respect of Transferee Company. The alteration of the Appointed date would render all calculations awry, none of the shareholder opposed the Appointed date proposed in the scheme of amalgamation. The exercising jurisdiction by the NCLT Mumbai to modify the Appointed date from 07.10.2017 to 01.04.2018 in the facts of this case was unwarranted. Thus, the impugned order so far as the modification of Appointed date is concerned is set aside and the Appointed date as per the scheme is fixed 07.10.2017, which is approved by the shareholder of the Appellant Company. Appeal allowed. Issues Involved:1. Modification of the Appointed Date by NCLT, Mumbai2. Jurisdiction and scope of the Tribunal in sanctioning the scheme of amalgamation3. Compliance with statutory requirements and commercial wisdom of shareholdersIssue-wise Detailed Analysis:1. Modification of the Appointed Date by NCLT, Mumbai:The primary issue in this appeal was the modification of the appointed date for the scheme of amalgamation from 07.10.2017 to 01.04.2018 by the NCLT, Mumbai. The original scheme, approved by NCLT, Delhi, had set the appointed date as 07.10.2017. The NCLT, Mumbai modified this date on the grounds that considerable time had lapsed since the original appointed date, and the Board Resolution and Valuation Report were dated 27.03.2018 and 22.03.2018, respectively. The appellant argued that such a modification was erroneous and that the tribunal should not interfere with the commercial wisdom of the parties if the scheme complied with statutory requirements. The appellant cited precedents from the Hon’ble Supreme Court and High Courts to support their position that the appointed date should not be modified without justification.2. Jurisdiction and Scope of the Tribunal in Sanctioning the Scheme of Amalgamation:The tribunal examined its jurisdiction and scope while sanctioning a scheme of amalgamation. It referred to the Supreme Court judgments in Miheer H. Mafatlal Vs. Mafatlal Industries Ltd. and Hindustan Lever & Anr. Vs. State of Maharashtra & Anr., which laid down the broad contours of the jurisdiction of the company court in granting sanction to the scheme. The court emphasized that its role is supervisory, not appellate, and it should ensure that statutory procedures are followed and that the scheme is not violative of any law, unconscionable, or contrary to public policy. The tribunal should not interfere with the commercial wisdom of the shareholders who have approved the scheme.3. Compliance with Statutory Requirements and Commercial Wisdom of Shareholders:The tribunal noted that the appellant company had fulfilled all requisite statutory compliances. The NCLT, Mumbai's modification of the appointed date was based on the valuation report being subsequent to the original appointed date. However, the tribunal found that the modification was unwarranted as the original appointed date had already been approved by NCLT, Delhi, and no shareholder had opposed it. The tribunal cited the Gujarat High Court's decision in Shree Balaji Cinevision (India) Pvt. Ltd., which held that the appointed date should not be modified without cogent reasons as it would affect financial calculations.Conclusion:The tribunal concluded that the NCLT, Mumbai's modification of the appointed date from 07.10.2017 to 01.04.2018 was unwarranted. The impugned order was set aside to the extent of the modification, and the appointed date as per the original scheme was restored to 07.10.2017. The tribunal extended the compliance period for the directions in the impugned order and clarified that the effective date of the scheme would be the date on which the certified copy of the order, along with the sanctioning scheme order, is filed with the Registrar of Companies in Mumbai and New Delhi. The appeal was allowed without any order as to costs.