TaxTMI 
TaxTMI 
2021 (9) TMI 861
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....lication has been filed by the Original Respondent No. 9 of Company Appeal (AT) No. 238 of 2018 claiming to be representing Respondents No. 3, 4, 5 and 6 (as arrayed in the Appeal) against Respondent - 'Ankit Mittal' - the Original Appellant. The Application has been filed under Rule 11 of National Company Law Appellate Tribunal Rules, 2016 (for short NCLAT Rules) seeking modification/ clarification of the judgment and order dated 29th November, 2019, passed by this Appellate Tribunal (hereafter referred as 'concerned judgment'). 2. We will refer to the parties as were arrayed in the Appeal and which is reflected in the cause title of this Application also. 3. The Application claims and it is argued that in the concerned judgment passed by this Tribunal in the Company Appeal, this Tribunal rejected the Scheme of Amalgamation and Arrangement which had been approved by NCLT Chennai vide order which was impugned in the Appeal having dated 12th April, 2018 (Annexure 'C' at page 89) in CP/159, 160, 161, 162, 163, 164 & 165/CAA/ 2017 (CA/95, 96, 97, 98, 99, 100 & 101/CAA/2017). The Learned NCLT Chennai had approved the Scheme of Amalgamation and Arrangement between Respondents as array....
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....laimed that these Respondent No. 3 to 6 Companies by their consent letters (Annexure-G Colly) duly consented to the scheme being reinstated, declared to be sanctioned, valid operational and effective qua their merger with Respondent No. 9 and have authorised Original Respondent No. 9 to file this application. The Application claims that no prejudice or impediment would be caused to any party if scheme is reinstated, declared to be sanctioned, valid and effective qua the merger of Respondent Nos. 3 to 6 with Respondent No. 9. The Application claims and it is argued that the scheme can work out satisfactorily and in accordance with law so far as merger of Respondent Nos. 3 to 6 with Respondent No. 9 is concerned. The Learned Senior Counsel for the Applicant submitted that this Tribunal can exercise its inherent powers under Rule 11 of NCLAT Rules, 2016 to clarify/ modify the judgment and order dated 29th November, 2019 to the effect that the scheme shall not be rejected in so far as merger of Respondent Nos. 3 to 6 with Respondent No. 9 is concerned. 6. Original Appellant and Respondent to the Application - 'Ankit Mittal' has filed reply opposing the application and Applicant has fi....
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....with extra cost of valuation. The Learned Senior Counsel further submitted that in judgment in the matter of 'S. K. Gupta & Anr. vs. K. P. Jain & Anr.', (1979) 3 SCC 54, Hon'ble Supreme Court interpreted Section 392(1)(b) of the Companies Act, 1956, which is pari materia to Section 231(b) of the Companies Act, 2013. The argument is that the Hon'ble Supreme Court has found that the legislature has conferred wide powers on the Court to make such modifications as may be considered necessary for proper working of the scheme/arrangement. It is thus claimed that the NCLT has power to modify present scheme to implement the same with regard to Private Companies. 9. The Respondent Nos. 3 to 6 for whom the Applicant has filed application are naturally supporting the Application. 10. Counsel for the Original Appellant - Ankit Mittal referred to the Reply filed and the Written Submissions to submit that this Tribunal in the concerned judgment rejected the scheme in its entirety. The powers under Rule 11 of NCLAT Rules are to exercise inherent powers and it cannot be equated with power to review. It is claimed that power to review is not an inherent power and in absence of specific provisions....
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....riginal Appellant, is claiming that the scheme was rejected in entirety on the ground of compromise with the very foundation thereof. The purported scheme was unreasoned, unfair and based on unprofessionally prepared Valuation Report. Impugned Orders of NCLT Chennai were not maintainable for non-consideration of objections of the Regional Director. It is argued that there cannot be partial reversal of the judgment of this Tribunal and there cannot be an order holding the scheme partially as illegal and partially enforceable when it is a composite scheme. 12. We have heard parties. Section 230 of the Companies Act, 2013 deals with compromises or arrangements which are proposed between a company and its creditors or any class of them or between a company and its members or any class of them. The definition of 'Company' is given under Section 2(20) which specifies that 'company means a company incorporated under this Act or under any previous company law'. Section 232 deals with merger and amalgamation of companies. Under this Section an application is required to be made to the Tribunal under Section 230 for the sanctioning of a compromise or an arrangement proposed between a compan....
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....8) referring to the same scheme of arrangement between the nine entities and sought sanction of the scheme. The order of Learned NCLT Mumbai dated 6th December, 2017 dealt with Respondent Nos. 5 and 6 Companies and referred to the report of Regional Director dated 25th September, 2017. The relevant portion of Para 8 needs to be reproduced: "8. The Regional Director has filed his Report dated 25th September, 2017 stating therein that save and except as stated in paragraph IV of the said Affidavit, it appears that the Scheme is not prejudicial to the interest of shareholders. In paragraph IV of the said Affidavit, the Regional Director has stated that: a) The Registered office of the Transferor Company 1, Transferor Company 2, Transferor Company 3, Transferor Company 4, Demerged Company 1 and Demerged Company 2 and the Transferee Company are situated in the State of Tamil Nadu respectively i.e. outside of the jurisdiction of NCLT of this Tribunal and falls within the jurisdiction of NCLT of Chennai. Accordingly, similar approval be obtained by the abovesaid companies from Hon'ble NCLT at Chennai;" 15. Thus, the Regional Director for Mumbai Division had pointed out that the appro....
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....i-minority, anti-public shareholders, illegal, unlawful, unjust and against the public policy. The Appellant claimed that the Scheme of Arrangement and Amalgamation inter se the Respondent Companies is illegal and bad in law. This Tribunal considered the grievances of the Appellant as well as Intervenors and inter alia this Tribunal referred to the Valuation Report and observed at page 27 of the judgment as follows: "In view of the serious compromises in the process of the valuation of shares the creditability of the exchange ratio recommended could at best be termed as guess work by the valuer. The scheme based on such a valuation report losses its creditability and will impact the entitlement of the shareholders of the transferor companies. We have noted that the original scheme has not provided any payment to the shareholders whose shares are cancelled and the NCLT passed another order directing the transferee companies to consider to make payment to the shareholders whose shares were cancelled in terms of respective clauses of the scheme and on the intervention of the Tribunal, the Transferee companies accepted to make payment to the objector/shareholders at the book value ....