AI Drafter 
TaxTMI 
TaxTMI 
2020 (5) TMI 102
X X X X Extracts X X X X
X X X X Extracts X X X X
....on certificate of these blocks were received. Lease deeds have also been registered for some of the allottees. As far as block A is concerned, it is stated that the Scheme envisages shifting of the allottees to blocks B, C and D by allotting them areas which are unsold subject to the allottees making payments. Another project of the company is Spire Woods Project which is a residential scheme located in sector 103, Gurugram, Haryana. This project has 12 towers containing 620 dwelling units. 3. A perusal of the Scheme filed by the petitioner shows that it seeks three-fold objects, namely, revival of the company, construction of the Spire Edge Project and Construction of the Spire Woods Project. Regarding the Spire Edge Project, the propounders expressed their willingness to complete the construction of towers 'E' and 'F' and furnished offices. Certain terms are introduced, namely, that the allottees shall not claim any penalty, damage, compensation, etc. from the Company. It is claimed that an amount of Rs. 25 crores is required for completion of construction of Block 'E' and 'F' and the furnished offices of Spire Edge Project. The same will be organized out of funds which ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ir reports. The result of the voting of the scheme that took place is as follows:- Synopsis of Court Convened Meeting for Revival of A.N. Buildwell Pvt. Ltd. Synopsis of Spire EDGE Project Block A (Spire Edge Project)-06.01.2019 Particulars In number Percentage(based on the numbers of allottees) Total No. of Allottees 34 100 Total No. of Allotees/Proxy Appeared 24 71 Total Votes 24 100 Valid Votes 24 100 Invalid Votes 0 0 Total Valid Votes Cast in favour of the Scheme Without Modification 20 83 With Modification 4 77 Total FOR (with or without Modifications) 24 100 Total Valid Votes Cast Against the Proposed Scheme 0 0 Block B, C & D (Spire Edge Project)-14.01.2019 Particulars In number Percentage(based on the number of allottees) Total No. of Allottees 1041 100 Total No. of Allotees/Proxy Appeared 395 38 Invalid Votes 11 Valid Votes 384 100 Total Valid Votes Cast in favour of the Scheme Without Modification 22 6 With Modification 293 76 Total FOR (with or without Modificati....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cast in favour of the Scheme 0 - Total Valid Votes Cast Against the Proposed Scheme 0 - Unsecured Creditors Particulars In number Percentage(based on the number of Allottees) Total No. of Unsecured Creditors or Respondent Company 171 100 Total No. of Unsecured Creditors/Proxy Appeared 19 11 Total Votes 19 100 Valid Votes 18 100 Invalid Votes 1 - Votes cast in favour of the Scheme 18 100 Total Valid Votes Cast Against the Proposed Scheme 0 0 6. What follows from the above result is that with the necessary modifications each of the category of creditors have passed the Scheme with modifications with a majority of more than 75%. In nutshell, learned counsel states the result as follows:- (a) Block A (Spire Edge Project) 100% approval (b) Blocks B,C and D, (Spire Edge Project) with modification 82% (c) Furnished Office (Spire Edge Project) with modifications 97% (d) Block E (Spire Edge Project) with modifications 99% (e) Spire Woods Project with modifications 98% 7. In terms of section 391 of the Companies Act, 1956, much above 75% of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stered in PS Sarita Vihar against the ex-management of the Company. It is further pleaded that the revival plan seeks directions against the statutory bodies like Income Tax Department, Excise and Taxation Department, etc. which is wholly illegal. (ii) Vijay Shankar Pandey The aforesaid objector is said to be an allottee of a residential unit of the respondent in the Spire Woods Project. He has filed a criminal complaint on 30.05.2015 against the respondent company for cheating, conspiracy and criminal breach of trust. This complaint has been clubbed with FIR No. 114/2016 filed with PS Sarita Vihar. It is claimed that the revival scheme is against public policy, unconscionable and prejudicial to the interest of the allottees of the Spire Woods Project. The prejudicial terms include settlement of FIRs, criminal complaints, lack of particulars regarding the identity of the new investor in the respondent and the manner in which and the terms on which it proposes to complete the Spire Woods Project. It is pleaded that once the revival scheme is sanctioned, SW New Developer Company (a potential investor) could completely disappear leaving all allottees high and dry. It is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ications as were listed out in the typed sheet of paper attached to the respective voting slips. It was expected that the petitioners would call for a meeting with the representatives of the investors for an in-depth discussion and negotiation but nothing of that sought was done. (iv) Spire Edge Maintenance Lease & Facilitation Pvt. Ltd. (SELFC) SELFC has filed objections for and on behalf of the allottees/investors of Block B, C and D in the Spire Edge Project. Majority of the shareholding in SELFC is held by the said investors in accordance with the Builder Buyer Agreements executed by the respondent Company. Reliance is placed on the judgment of the Supreme Court in the case Meghal Homes (P) Ltd. Vs. Shree Niwas Girni K.K. Samiti and Ors., (2007) 7 SCC 753. Essentially the objections are a claim for better terms than what the scheme proposes. It is pleaded that Technology Upgradation Charges/WTC should be refunded back to the allottees or should be adjusted against the outstanding payment that some allottees may have to make. It is prayed that payment of 14 months unpaid assured returns/commitment charges @ Rs. 55/- per sq. ft. as stipulated in the builder buyers agreem....
X X X X Extracts X X X X
X X X X Extracts X X X X
....prior to the scheme. Therefore, the offence which has already been committed prior to the scheme does not get automatically compounded only as a result of the said scheme. Therefore, even by relying on the ratio of the aforesaid judgment in J.K. (Bombay) (P) Ltd. [AIR 1970 SC 1041] , this Court cannot accept the appellant's contention that the scheme under Section 391 of the Companies Act will have the effect of automatically compounding the offence under the NI Act." 17. Similarly, the Division Bench of this court in the case of Krishna Texport Industries Ltd. vs. DCM Ltd.(supra) held as follows:- "24. It cannot be lost sight of that the aforesaid provisions take colour from the same intent and in a similar situation. The proceedings arose on account of the failure of the company to meet its financial commitments. Thus if winding proceedings are pending, the civil proceedings can be put in abeyance for the time being to give some time to the company to come up with a scheme or otherwise to clear its liability. In fact, in view of the D.K. Kapur's case (supra), the matter is not even res integra insofar as this Court is concerned that in such a situation criminal pr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....RA, GST, VAT, Service Tax and Income Tax. 15.6. The Income-Tax Department be directed to stay the demands and vacate the ex-parte orders and to condone the delay and *allow the Company to file appeals, revision applications and any other proceedings before the appropriate authorities and or court. 15.7. All the cases, civil as well as criminal, filed against the Company, its ex-Directors & Officers and the Original Shareholders to be vacated or stayed sine-die. Any other proceedings filed in any Court in India including consumer forums by any person, company and or institutions including public interest litigation be vacated or stayed sine-die." Hence, there is an attempt in the scheme to try and seek waiver of the criminal proceedings. To that extent the aforesaid clauses of the scheme would accordingly not be approved. However, once the scheme is implemented and the concerned creditor receives his share as per the scheme, appropriate consequences would follow as per law in the pending criminal matters. 19. Regarding the concern of the objectors that the scheme is nothing but an attempt to siphon off funds and assets of the company in question, the said app....
X X X X Extracts X X X X
X X X X Extracts X X X X
....That all necessary material indicated by Section 393(1)(a) is placed before the voters at the meetings concerned as contemplated by Section 391 sub-section (1). 5. That all the requisite material contemplated by the proviso of sub-section (2) of Section 391 of the Act is placed before the Court by the applicant concerned seeking sanction for such a scheme and the Court gets satisfied about the same. 6. That the proposed scheme of compromise and arrangement is not found to be violative of any provision of law and is not contrary to public policy. For ascertaining the real purpose underlying the scheme with a view to be satisfied on this aspect, the Court, if necessary, can pierce the veil of apparent corporate purpose underlying the scheme and can judiciously x-ray the same. 7. That the Company Court has also to satisfy itself that members or class of members or creditors or class of creditors, as the case may be, were acting bona fide and in good faith and were not coercing the minority in order to promote any interest adverse to that of the latter comprising the same class whom they purported to represent. 8. That the scheme as a whole is also f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat context, the court has necessarily to see whether the scheme contemplates revival of the business of the company, makes provisions for paying off creditors or for satisfying their claims as agreed to by them and for meeting the liability of the workers in terms of Section 529 and Section 529-A of the Act. Of course, the court has to see to the bona fides of the scheme and to ensure that what is put forward is not a ruse to dispose of the assets of the company in liquidation." 21. Similarly, in Modiluft Limited vs. S.K.Modi, 2005 (123) DLT 413, a co-ordinate Bench of this court held as follows:- "40. I do not find that the scheme is inherently incapable of performance and unworkable. I would take note of some of the case law cited at the Bar, which would throw light on the approach to be adopted in such cases. 41. Dealing with such aspects, the Gujarat High Court (speaking through D.A. Desai, J. as His Lordship then was) and considering the matter in all its length and breadth in re. Maneckchowk and Ahmedabad Manufacturing Co. Ltd. reported (1970) 40 Comp. Cas. 819 made the following observations which would equally apply to the present fact situation: ....