TaxTMI 
TaxTMI 
2024 (5) TMI 1403
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....the Respondent or Resulting Company), modified the terms of the Scheme by altering the Appointed Date to the date of pronouncement of the Impugned Order. 2. The Appellant, Oriental Carbon & Chemicals Limited, has its registered office in Gujarat and is engaged primarily in manufacturing and selling chemicals and investments, it is a publicly listed company on the National Stock Exchange of India and BSE. The Respondent, OCCL Limited, a wholly owned subsidiary of the Appellant, was incorporated in Gujarat in 2022 for chemical business operations. The Appellant and Respondent are collectively referred to as Parties. 3. The Scheme filed before the Ld. NCLT seeks to demerge the Demerged Undertaking from the Appellant to the Respondent on a going concern basis, with the aim to create separate entities focusing on specific business verticals, thereby enhancing operational efficiency and growth opportunities. 4. The Appointed Date, defined in the Scheme as an Effective Date or as decided by the Parties, was agreed upon by the Board of Directors of both companies to be the Effective Date. This decision was vetted by the regulatory statutory authorities before giving their no-objec....
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....Persons shall also be deemed to have resolved and accorded all relevant consents under the Act or otherwise to the same extent applicable in relation to the demerger, capital reduction set out in this Scheme, related matters and this Scheme itself. 6. Now let us examine how the Scheme has been dealt with by the impugned order. It holds as follows: 15. OBSERVATIONS OF THIS TRIBUNAL 15.1 After analysing the Scheme in detail, this Tribunal is of the considered view that the scheme as contemplated amongst the Petitioner Companies seems to be prima facie beneficial to the Company and will not be in any way detrimental to the interest of the shareholders of the Company. Considering the record placed before this Tribunal and since all the requisite statutory compliances have been fulfilled, this Tribunal sanctions the Scheme of Demerger appended at "Annexure I* of the Demerging Company and Resulting Company to the typed set filed along with the Company Petition as well as the prayer made therein. 15.2 The Learned Counsel for the Petitioner Companies submitted that no investigation/proceedings are pending against the Demerged or Resulting Company under section....
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....rs and all concerned under the Scheme. ii. Hon'ble NCLAT in the matter of Sterlite Ports Ltd. Vs Regional Director Southern Region [Comp. Appeal (AT)(CH) No. 99 of 2023] held that NCLT has powers under rule 11 of the NCLT Rules, 2016, to fix the Appointed Date, which would be beneficial to the Scheme of Amalgamation iii. In view of the above we hereby exercise the powers of rule 11 and hence direct that the Appointed Date is to be considered from the date of pronouncement of this order. As according to our view the remaining steps as envisaged under additional affidavit dated 07.03.2024 are only procedural steps/ ministerial acts which will follow post the pronouncement of the present order and effective date cannot be kept open. 7. Thus the crux of the impugned order would show the Ld. NCLT has found the scheme prima facie beneficial to the company and not in any way detrimental to the interest of the shareholders of the company. The Ld. NCLT also notes all requisite statutory compliances have been fulfilled and accordingly the Ld. Tribunal had sanctioned the Scheme of Demerger after finding that no investigation/proceedings are pending against the demerge....
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....o have been met, the Court will have no further jurisdiction to sit in appeal over the commercial wisdom of the majority of the class of persons who with their open eyes have given their approval to the scheme even if in the view of the Court there would be a better scheme for the company and its members or creditors for whom the scheme is framed. The Court cannot refuse to sanction such a scheme on that ground as it would otherwise amount to the Court exercising appellate jurisdiction over the scheme rather than its supervisory jurisdiction. It is the commercial wisdom of the parties to the scheme who have taken an informed decision about the usefulness and propriety of the scheme by supporting it by the requisite majority vote that has to be kept in view by the Court. The Court has neither the expertise nor the jurisdiction to delve deep into the commercial wisdom exercised by the creditors and members of the company who have ratified the scheme by the requisite majority. Consequently the Company Court's jurisdiction to that extent is peripheral and supervisory and not appellate. The Court acts like an umpire in a game of cricket who has to see that both the teams play their ....
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....one of the shareholder opposed the Appointed date proposed in the scheme of amalgamation. In identical facts Hon'ble High Court of Gujrat in the Case of O.J. Appeal No. 65 of 2009 in CP No. 100 of 2009 in Re. Shree Balaji Cinevision India Pvt. Ltd. decided on 23.09.2009 held that : "We have perused the Judgment of the Ld. Company Judge. We do agree with the Ld. Company Judge that the Company Court has discretion to make modification in the proposed scheme of compromise, arrangement etc. However, such discretion is required to be exercised for cogent reasons. We do agree with Mr Soparkar that the Ld. Company Judge had no reason to modify the Appointed date proposed inthe scheme of amalgamation. We also agree that the alteration in the appointed date would affect the calculations and would have financial implications. For the aforesaid reasons, we allow these appeals. The modification made by the Ld. Company Judge in respect of the Appointed date proposed in the scheme of amalgamation is set aside. The scheme of the amalgamation as proposed is sanctioned. 16. With the aforesaid, we are of the considered view that the exercising jurisdiction by the NCLT Mumb....