2021 (3) TMI 1009

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....ny) under Sections 230 to 232 of the Companies Act, 2013 submitted a scheme for amalgamation of the Transferor Company into Transferee Company. NCLT, Delhi has approved the scheme of amalgamation with Appointed date 07.10.2017 vide order dated 22.10.2019 passed in CP No. CAA-144/ND/2018. NCLT, Mumbai has also approved the scheme vide impugned order but modified the Appointed date from 07.10.2017 to 01.04.2018 on the ground that considerable time has lapsed from the Appointed date as mentioned in scheme and the Board Resolution of the Scheme is dated 27.03.2018 and Valuation Report is dated 22.03.2018. 3. Being aggrieved with this order, the Appellant has filed this Appeal. 4. Learned Counsel for the Appellant submits that the appointed date fixed as per the scheme of amalgamation was 07.10.2017.The said scheme was approved by the NCLT, Delhi vide order dated 22.10.2019 in respect of Transferee Company with the same Appointed date 07.10.2017. However, by the impugned order NCLT, Mumbai modified the Appointed date 01.04.2018 such order is erroneous. The Tribunal would not sit in Appeal over the commercial wisdom of the parties who proposed and approved the scheme if the scheme ....

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....ors of the Transferor Company and the Transferee Company). In this regard. It is submitted that Section 232 (6) of the Companies Act, 2013 states that the Scheme under this Section shall clearly indicate an appointed date from which it shall be effective and the scheme shall be deemed to be effective from such date and not at a date subsequent to the appointed date. However, this aspect may be decided by the Hon'ble Tribunal taking into account its inherent powers" (underlining added) "(e) as per clause 3.2 of the scheme, the Appointed date means October, 7 2017 (or such other date as may be mutually determined by the board of Directors of the transferor company and the transferee company) and impact of the amalgamation will be given as per the requirements of the applicable Indian accounting standards from this date (or such other date as may be mutually determined by the Board of Directors of the Transferor Company and the Transferee Company). In this regard, it is submitted that Section 232 (6) of the Companies Act, 2013 states that the Scheme under this Section shall clearly indicate an Appointed date from which it shall be effective and the scheme shall be deemed to be e....

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....terial 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 unconscionable, nor 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 found to be just, fair and reasonable from the point of view of prudent men of business taking a commercial decision beneficial to the class represented by them for whom the schem....

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....es; and 2. That the jurisdiction of the company court while sanctioning the scheme is supervisory only, i.e., to observe that the procedure set out in the Act is met and complied with and that the proposed scheme of compromise or arrangement is not violative of any provision of law, unconscionable or contrary to public policy. The Court is not to exercise the appellate jurisdiction and examine the commercial wisdom of the compromise or arrangement arrived at between the parties. The role of the court is that of an umpire in a game to see that the teams play their role as per rules and do not overstep the limits. Subject to that how best the game is to be played is left to the players and not to the umpire. Both these principles indicate that there is no adjudication by the court on the merits as such." (Emphasis added) 13. With the aforesaid, it is settled legal position that while exercising its power in sanctioning a scheme of amalgamation, the Court/Tribunal has to examine as to whether the provision of statute have been complied with.The Court/Tribunal would have no further jurisdiction to sit in Appeal over the commercial wisdom of shareholders of the C....