National Company Law Appellate Tribunal
Raja Bahadur Welfare Association vs Okay Estate Developers Private Limite on 20 September, 2021
NATIONAL COMPANY LAW APPELLATE TRIBUNAL,
PRINCIPAL BENCH, NEW DELHI
Company Appeal (AT) No. 37 of 2021
IN THE MATTER OF:
Raja Bahadur Welfare Association
Shop No. 174, Ground Floor,
103, Raja Bahadur Building, X Lane
Maulana Azad Road, Mumbai - 400 008 ...Appellant
Versus
1.Okay Estate Developers Pvt. Ltd.
Shop No. 40 Harbour
Crest Building, Ground Floor,
Shivdas Champsi road,
Mazgaon, Mumbai - 400 010 ...Respondent No.1
2.Grid Infradevelopers Pvt. Ltd.
Shop No. 2 & 3,
Plot No. 78, Raghunath Vihar, Sector 50E
Seawoods, Nerul, Navi Mumbai
Thane, 400 703 ...Respondent No.2
Present:
For Appellant : Ms. Shrishty Punjabi, Advocate.
For Respondents : Mr. Dhruv Gupta, Advocate for Respondent Nos. 1 &
2.
JUDGMENT
DR. ASHOK KUMAR MISHRA, TECHNICAL MEMBER
1. The present appeal has been filed by the 'Appellant' - 'Raja Bahadur Welfare Association' under Section 421 of the Companies Act, 2013 (for short 'Act') against the impugned order dated 17.07.2020 passed by the 1 Company Appeal(AT) No. 37 of 2021 'National Company Law Tribunal, Mumbai Bench Court -II' ('Tribunal') in CP(CAA)/945/MB-II/2020.
2. This is out of a case of scheme of arrangements between Scheme of Arrangement between 'Okay Estate Developers Private Limited' (Demerged Company) and 'Grid Infradevelopers Private Limited' (Resulting Company) and their respective shareholders for Demerger of the Project Division of 'Okay Estate Developers Private Limited' into 'Grid Infradevelopers Private Limited'.
3. The following reliefs are sought by the Appellant:
a. The records and proceedings of the Company Petition CP(CAA)/945/MB-II/2020 be called for;
b. The Respondents company be directed to serve Appellant notice, company scheme and entire proceedings of the original company petition as stated above and also to serve all its creditors with notice of 'Demerger Petition' and also 'publication' in two newspapers have vide circulation etc.
4. The Tribunal vide its order dated 17.07.2020 has passed the following orders:
"Para 12 - the Petitioner Companies shall issue notices to (i) the Central Government through the office of Regional Director (Western Region), Ministry of Corporate Affairs Mumbai, (ii) Registrar of Companies, Maharashtra, Mumbai, (iii) concerned Income Tax Authority complete with PAN clearly indicated therein, clearly indicating therein the date fixed for final hearing. The Petitioner Companies may send the notice to regulators above 2 Company Appeal(AT) No. 37 of 2021 mentioned either by RPAD/Courier or by E-mail, due to the lockdown situation prevailing at present.
Para 13 - At least not less than 10 days before the date fixed for hearing, the Petitioner Companies to publish the joint notice of hearing of Petition in two local newspapers viz., The Free Press Journal in English and Translation thereof in Navshakti in Marathi language both having wider circulation in the State of Maharashtra as per rule 16 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. Considering the present lockdown situation owing to the Covid-19 pandemic, the petitioners will have the option to publish notices online in the respective e-newspapers editions.
14- the Petitioner Companies shall host the notices on their respective websites if any.
15- the Petitioner Companies shall file a compliance report with the Registry in regard to the directions given in this order in lieu of the customary affidavit of service, due to the lockdown situation prevailing now.
5. The Tribunal on 14.05.2020 has also passed the following orders:
"Para 12- Keeping in view the submission made by Learned Authorized Representative for the Applicants, the meetings of the unsecured creditors are dispensed with. However, the Applicant companies are hereby directed to issue notices to all their unsecured creditors by Registered Post AD/Speed Post AD/Hand Delivery/Courier/ Email. Individual notice to all the unsecured 3 Company Appeal(AT) No. 37 of 2021 creditors shall be issued, enclosing a copy of the Scheme, and clearly indicating therein that in case they have any objection, they shall file the same before this Tribunal with a copy to the Applicant companies or their counsel, within a period of thirty days from the date of receipt of such letters.
13- The Applicant Companies to serve notice of the present applicant complete with enclosures on (i) Regional Director (Western Region), Ministry of Corporate Affairs Mumbai, (ii) Registrar of Companies, Maharashtra, Mumbai, (iii) concerned Income Tax Authority within whose jurisdiction the respective companies are assessed to tax, clearly indicating the PAN of the concerned company, pursuant to Section 230 (5) of the Companies Act, 2013 and rule 8 of the Companies (Compromises, Arrangements and Amalgamation's) Rules, 2016. If no response is received by the Tribunal from such authorities within 30 days of the date of receipt of the notice, it will be presumed that they have no objection to the proposed Scheme.
14- the Applicant Companies shall also serve notice upon sectoral regulator(s) as may be applicable to the Applicant Companies pursuant to Section 230(5) of the Companies Act, 2013 as per rule 8 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. If no response is received by the Tribunal from such sectoral regulator(s) within 30 days of the date of receipt of the notice it will be presumed that such sectoral regulator(s) has no objection to the proposed Scheme. 4 Company Appeal(AT) No. 37 of 2021 15- The Applicant Companies shall file proof of compliance electronically within 15(fifteen) days from the date on which the last of the compliances as stated in above paragraphs are made to, report to this Tribunal that the directions regarding issue of notices have bene duly complied with."
6. The Appellants have alleged that the Respondent companies (Companies involved in the scheme of arrangement) have not served upon notice to all its creditors and have raised eyebrow that even the newspapers publication have been done during the lockdown period and the newspapers are not in much circulations. Once the Appellant came to know that an amount of Rs. 1,48,33,407/- is shown as payable to them in their financial statements, they became alert and asked the Respondent Companies to provide them the 'Scheme of Arrangement' and other related financial statements to go through the same for responding their views but the Respondent companies failed to serve the same to them. They have not been provided with the 'Statement of Account' to know their exact position and also to comment on the 'Scheme of Arrangement'.
7. The Respondents have raised several issues including earlier withdrawal of the application vide order dated 11.01.2021 by some other creditor in Company Appeal (AT) No. 01 of 2021 and also on the authorized representative of the Appellants apart from bar of limitation. The Respondents are alleging that the appellant is neither the shareholder nor a creditor of the Respondent companies and the amount shown as outstanding is an unreconciled amount payable to 'Erstwhile owner' of 'Rajabhadur Building' from whom building was acquired by the Respondents companies. The Appellants have nothing to do with the 5 Company Appeal(AT) No. 37 of 2021 outstanding amount and is not even a registered association. The creditors have failed to file objections within 30 days as communicated by the Tribunal vide order dated 14.05.2020. The Respondents are submitting that the appellants are neither a creditor nor a shareholder so there was not question of service notice on them. The Appellants are only 'tenants'.
8. We have gone through the submission made by the parties and are having following observations:
i. On the question of limitations, the application has been filed on 26.02.2021 vide diary no.25730. The appeal is against the impugned order of the Tribunal dated 17.07.2020. The Hon'ble Supreme Court passed an order on 08.03.2021 while disposing Suo Moto Writ Petition Civil No.3 of 2021 in para 2 has observed that "in computing the period of limitation for any suit, appeal, application or proceedings, the period from 15.03.2020 till 14.03.2021 shall stand excluded. Consequently, the balance period of limitation remaining as on 15.03.2021, if any, shall become available with effect from 15.03.2021". Hence, this application has been filed within limitation period.
ii. On going through the provisional balance sheet as on 31.12.2019 (page no. 103 of the Reply by the Respondent vide dairy No. 28551 dated 02.08.2021) of the Respondent Company involved in the 'Scheme of Arrangement' reflects that 'Rajabhadur Building' 6 Company Appeal(AT) No. 37 of 2021 payable account is approx.. 15% of total 'Unsecured Creditors'. Hence, they are entitled to file any objection to the Arrangements being more than 5% of the total outstanding amount as per Section 230 (4) of the Act.
iii. This is a case of 'Resident Welfare Association' comprising of tenants. He has declared himself as an 'Authorized Representative' through a notarized affidavit.
iv. The respondents raising the issues that these
amounts are not payable to the tenants of
Rajabhadur Building but is payable to 'erstwhile owner of Rajabhadur Building from whom the building was acquired by the Respondent company, then they should have furnished copy of auditors certificate to "The Secretary" of "Rajabhadur Welfare Association" which they have not so far done. v. In view of the aforesaid facts and circumstances of the case, the Respondents are directed to serve the Appellants with notice, company scheme including related papers within 30 days of the date of this order. The Tribunal is to look into the objections of the Appellants before final disposal of the petition. With these directions and observations, the appeal is disposed of. IA No. 529 of 2021 for stay of the proceedings is rejected. The appeal is allowed to the extent as stated above. This judgment copy be served 7 Company Appeal(AT) No. 37 of 2021 to the 'Designated Registrar of NCLT Mumbai' for further necessary action at their end.
Pending IAs, if any stands disposed of. Interim Orders, if any, passed by this Appellate Tribunal stands vacated. No orders as to costs.
[Justice Jarat Kumar Jain] Member (Judicial) (Dr. Ashok Kumar Mishra) Member(Technical) 20th September, 2021 New Delhi Raushan.k 8 Company Appeal(AT) No. 37 of 2021