National Company Law Appellate Tribunal
The Indian Performing Right Society ... vs Novi Digital Entertainment ... on 4 April, 2024
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
PRINCIPAL BENCH, NEW DELHI
(APPELLATE JURISDICTION)
Company Appeal (AT) No. 59 of 2024
(Filed under Section 421 of the Companies Act, 2013)
(Arising out of the `Impugned Order' dated 09.02.2024 in
C.A. 320 / 2023 in CP No. 200 / 2023, passed by the
`National Company Law Tribunal', Court No. V, Mumbai Bench)
In the matter of:
The Indian Performing Right Society Ltd.
A Company limited by guarantee and
Registered under the Companies Act, 1956
Bearing CIN : U92140MH1969GAP014359
with its Registered Office at:
208, Golden Chambers,
New Andheri Link Road,
Andheri West, Mumbai - 400 058
Email: [email protected] .... Appellant
v.
Novi Digital Entertainment Private Limited
A Company Limited By Shares And
Registered Under the Companies Act, 1956
Bearing CIN : U64202MH2000PTC242292
with its Registered Office at :
Star House, Urmi Estate,
95, Ganpatrao Kadam Marg,
Lower Patel - West, Mumbai - 400 013
Email: [email protected] .... Respondent No. 1
Star India Private Limited,
A Company Limited by Shares and
Registered under the Companies Act, 1956
bearing CIN : U72300MH1994PTC076485
with its Registered Office at :
Star House, Urmi Estate,
95 Ganpatrao Kadam Marg,
Lower Parel - West, Mumbai - 400 013
Email: [email protected] .... Respondent No. 2
Comp. App (AT) No. 59 / 2024
Page 1 of 35
Present:
For Appellant : Mr. Sandeep Bajaj, Mr. Mayank Biyani, Mr. Harpreet
Singh and Mr. Gaurav Gadodia, Advocates.
For Respondents : Mr. Arun Kathpalia, Sr. Advocate with Mr. Siddharth
Ranade, Mr. Kaazvin Kapadia, Mr. Prakshal Jain,
Mr. Raghav Bhargava and Mr. Mihir Dalawai, Advocates
JUDGMENT
(Hybrid Mode) Justice M. Venugopal, Member (Judicial):
Background:
The Appellant / Petitioner (`The Indian Performing Right Society Ltd.'), Mumbai, has preferred the instant Comp. App (AT) No. 59 / 2024, before this `Tribunal', as an `Aggrieved Person', in respect of the `Impugned Order', dated 09.02.2024, in C.A. 320 / 2023 in CP No. 200 / 2023, passed by the `National Company Law Tribunal', Court No. V, Mumbai Bench.
2. The National Company Law Tribunal, Court No. V, Mumbai Bench, while passing the `Impugned Order', dated 09.02.2024 in C.A. 320 / 2023 in CP No. 200 / 2023, among other things, at Paragraph Nos. 25 to 29, had observed the following:
25. ``On perusal of the pleadings of both parties, it is evident that the Applicant does not feature as a creditor of both Respondent Nos. 1 and 2 as per its audited financial statements and the list of its unsecured creditors, duly verified and authenticated by the statutory auditor.
Reliance is placed on Astorn Research Ltd. (2013 SCC OnLine Guj 1510) Comp. App (AT) No. 59 / 2024 Page 2 of 35 in which it was held that only a creditor as per the audited financial statements of the transferor/transferee companies or a shareholder of the transferor/transferee companies has the locus to intervene in a scheme to oppose the same.
26. In addition to the above stated, the Applicant's name is also not included in the list of 194 unsecured creditors of Respondent No. 1 and 1,215 unsecured creditors of Respondent No. 2 as annexed to the Company Application Scheme No. 48 of 2023. Both the Respondents Nos. 1 and 2 have no secured creditors. Therefore, we are of the considered opinion that since the Applicant is not a creditor of both Respondent Nos. 1 and 2 as per available records they do not have a locus to object to the proposed scheme.
27. It is a fact that Respondent No. 2 made certain payments in June 2018 towards royalties for the period 21.06.2012 to 31.03.2018 under a letter agreement. However, this bench is of the considered opinion that the letter agreement cannot be treated as a precedent for any future agreements. The letter agreement therefore, definitely does not convert the Applicant's status to that of a creditor in respect of amounts now claimed to be due for the period between 01.04.2018 to 31.03.2023 vis a vis Respondent No. 2.
28. The Bench has also procured the affidavits filed in replies of both the Respondent companies which categorically mention that the liabilities/obligations of any kind of the Transferor Company will be transferred to and become the liabilities/obligations of the Transferee Company. Thus, the sanction of the scheme will not impair or extinguish any creditor's claim. Reliance is also placed on Zee Interactive MultiMedia Ltd. (2002) 3 Comp Cas 733 (Bom) in which it was held that unless a creditor shows that the scheme is malafide or fraudulent, or that it would adversely affect creditors of the transferee company, or is shown to be contrary to law, the court should not come in the way of bonafide scheme of amalgamation. The court also observes the Respondent's claim that both the transferor and the transferee companies are financially healthy companies with a positive net worth and the Scheme is beneficial for all stakeholders of both companies. Hence, even if the Applicant is Comp. App (AT) No. 59 / 2024 Page 3 of 35 proved to be the creditor of the Respondent in future, its interests will be balanced and protected.
29. The court therefore is of the opinion that postponing or staying the process of the Scheme in question based on the claims made by the Applicant at this stage will not be in order, as the locus of the Applicant to object to the Company Application Scheme No. 48 of 2023 is not established. In the event the Applicant's credential as a creditor being established in future, the Scheme provides enough scope for its interest to be protected.'' and resultantly, dismissed the `Company Application', by `not granting' any of the `Reliefs', prayed for.
Appellant's Submissions:
3. The Learned Counsel for the Appellant contends that the `Impugned Order', dated 09.02.2024, passed by the `Tribunal', in dismissing the C.A. 320 / 2023 in CP No. 200 / 2023, is an `invalid' and an `illegal' one, because of the fact that the `Tribunal', had passed the `Impugned Order', beyond the `Reliefs' and `Pleadings' of the `Petition / Application', filed by the `Appellant / Petitioner', by placing reliance on documents, Viz. `List of Creditors' and `Affidavit', which had not formed part of the `Pleading' in C.A. 320 / 2023 and further, that the `Appellant', had no access, to the said `Scheme Documents'.
4. It is represented on behalf of the Appellant, that the matter to be determined, was Appellant's entitlement as a Person / Member of the Public and also as the `Creditor' of the `Respondent Companies', to the `Scheme Comp. App (AT) No. 59 / 2024 Page 4 of 35 Documents', filed under the `Scheme', by the Respondents, while the `Court' decided on the `Appellant's Locus' as `Creditor' of the `Respondent Companies', ignoring that the `Scheme' is Public process and affects the other rights of the Appellant.
5. It is the stand of the Appellant that the `Tribunal', had not taken into consideration of the `statutory force, establishing Appellant's right', under `the Copyright Act, 1957'.
6. The Learned Counsel for the Appellant, points out that the `Tribunal', had not decided that `any Person, has the right to seek `Scheme Documents', under `Process of the Scheme', as per Section 230 - 232 of the Companies Act, 2013.
7. The Learned Counsel for the Appellant, takes a plea that the `Tribunal', had decided the `Appellant's Locus' as `Creditor' of the `Respondent Companies', ignoring that `Scheme' is `Public Process', and affecting the `Appellant's other Rights'.
8. According to the Appellant, the `Tribunal', had not furnished any reasons for holding, that the `Previous Agreements', entered into between the `Parties', in June 2018, do not establishes, the `Appellant's right as Creditor'.
9. The other argument raised by the Learned Counsel for the Appellant, is that, the `Tribunal', instead of limiting the `Order', to the `entitlement' of the Comp. App (AT) No. 59 / 2024 Page 5 of 35 Appellant, to seek the `Documents', under the `Scheme', had also decided upon the `Appellant's right', to object to the `Scheme'.
10. The Learned Counsel for the Appellant, emphatically contends that the `Tribunal', after taking up the issue of `determining, whether the `Appellant', is the `Creditor' of the `Respondents Companies', had ignored the admissions, made by the `Second Respondent', in their Reply dated 27.07.2023, annexed to the `Affidavit in Reply', filed by the Respondents themselves.
11. The Appellant's case is that, they are entitled to the `Scheme Documents', filed by the `Respondents', under Section 230-232 of the Companies Act, 2013, firstly as a member of the `Public', on account of `Scheme', being a `Public Process', which can be seen from the various sections and provisions of the `Companies Act' and second, as a `Creditor' of the `Respondents' (`Transferor and Transferee Companies'), by virtue of `Copyright Act, 1957', previous conduct of the `Respondents', recognising the rights of the Appellant and admissions, made by the `Respondents', in their Reply, dated 27.07.2023 filed in C.A. 320 / 2023.
12. The Learned Counsel for the Appellant, submits that the `finding of the Tribunal', in the `Impugned Order', that the `Appellant', is neither a `Creditor of Respondent No. 1 nor of the Respondent No. 2', is completely `erroneous', and ought to be set aside. In fact, the said `erroneous finding', was rendered on Comp. App (AT) No. 59 / 2024 Page 6 of 35 the basis of the `Documents / Records / Books', which were not made available to the `Appellant'.
13. The plea of the Appellant is that, the `Impugned Order', of the Tribunal', dated 09.02.2024 had `abrogated', the `valuable right of the Appellant', in challenging the `Respondents Books', which had `excluded the Appellant', as a `Creditor' of the Respondents. In this connection, the contention of the `Appellant', is that the `Tribunal' is `not to rely on anything which is not made available to a Person, to hold it against him, without `providing an opportunity of being Heard'.
14. According to the Appellant, the `Tribunal', in the `Impugned Order', had confused the `two distinct and separate steps in the Amalgamation Process'. As such, the decision in `Astorn Research Limited, 2013 SCC OnLine Guj. 1510, being relied upon by the `Tribunal', in the `Impugned Order', is a `misplaced' one. Also that, the decision in `Astorn Research Limited's case', carves out an `exception', by mentioning that, `it is open to the `Creditors', to demonstrate that they are the `Creditors', to the satisfaction of the `Court'.
15. According to the Appellant, the `Impugned Order', had wrongly held, that `the Letter Agreement', cannot be treated as a `precedent', for `Any Future Agreement', and the said `finding', is an `unwarranted' one. In this regard, the Appellant's stand is that, its placing reliance upon the earlier `Letter Comp. App (AT) No. 59 / 2024 Page 7 of 35 Agreement', was to indicate, that there existed a `relationship of `Creditor' and `Debtor', between the `Appellant and the Respondent', and this could not have been brushed aside, by the `Tribunal'.
16. The Learned Counsel for the Appellant, comes out with an argument that the `Impugned Order', had relied upon the `Judgment of the Hon'ble High Court of Bombay in `Zee Interactive and Multimedia Limited (2002) 3 Comp Cas 733 Bom', to state unless a `Creditor', shows that the `Scheme', is `Mala fide' or `Fraudulent' or that, it adversely affects the `Creditors' of the `Transferee Company', or is shown to be contrary to Law', the Court should not come, in the way of `Bona fide Scheme of Amalgamation'. However, the `Impugned Order', had failed to appreciate that the `Scheme of Amalgamation', would in fact, be contrary to the provisions of the `Copyright Act', 1957, if it does not provide for the `pecuniary Claims' of the `Appellant'.
17. The Learned Counsel for the Appellant, brings to the notice of this `Tribunal', that the `Appellant / Petitioner', is claiming a `right of entitlement', to the `Documents', on the basis that he is a `Member of the public', as well as he is the `Creditor' of the `Respondents Companies'. Further, it is the submission of the Appellant's side, `any Member of the `Public', `Creditor', `Shareholder' and `Regulatory Authorities', are entitled to seeking documents as the `Scheme proceedings', is a public process'.
Comp. App (AT) No. 59 / 2024 Page 8 of 35
18. According to the Appellant, there are two stages Viz. (a) Receiving the Documents and (b) the `Persons' eligible, to raise `objections' to the `Scheme'.
Also that, a mere perusal of various provisions of the Companies Act, 2013, the Companies (Compromise, Arrangements, and Amalgamations) Rules, 2016, (hereinafter referred to as `CAA Rules, 2016'), clearly shows that the Scheme is a `Public Process', and `every person', has a right to seek documents filed by any Company in a `Scheme', under Section 230 - 232 of the Companies Act, 2013.
19. The Learned Counsel for the Appellant, refers to Rule 35 read with Form NCLT 3A of the NCLT Rules, 2016, deals with notice of hearing to be given to the Public at large before the final hearing of the `Scheme Petition'. In fact, the said advertisement in the last point includes, ``A copy of the Petition / Application / Reference, will be furnished by the undersigned to any Person requiring the same on payment of the prescribed charges for the same.''
20. The prime submission of the Learned Counsel for the Appellant, there is no qualification in the term `Person', and therefore it includes `every member of the public', who is interested knowing about the `Scheme'.
21. According to the Appellant / Petitioner, it is a `Copyright Society', registered and authorised, under Section 33 of the Copyright Act, 1957, by this, it has the `right' to collect `Royalty', from all the `Organisations' that are in the Comp. App (AT) No. 59 / 2024 Page 9 of 35 `Business of Broadcasting, Telecasting, Streaming of any Musical and Literary work'.
22. The Learned Counsel for the Appellant, brings to the notice of this `Tribunal', that the Respondents Nos. 1 & 2 are in the `Business of Broadcasting and Streaming Activities', utilising numerous literary and musical works in which `Copyright', subsists in various forms i.e., either by the `communication to the public' or `performance of the literary or musical works', stand alone or utilisation thereof, in `any form', such as `Sound Recording' or `Cinematograph Film'.
23. The Learned Counsel for the Appellant, adverts to Section 33A of the Copyright Act, 1957, that upon the utilisation of `Copyrighted', the Respondents are liable to pay the `Royalty', as per the published `Tariff' of the `Appellant / Copyright Society'. In this connection, the Learned Counsel for the Appellant refers to Section 19(8), 19(9), 19(10) read with third and fourth proviso to Section 18 of the Copyright Act, 1957, clearly shows that `there is a `Right' of the `Authors and Composers' to receive `Royalty', for their work and the `Appellant', has the right to receive the said Royalty on behalf of these Author Composer members and other Societies'.
24. The Learned Counsel for the Appellant, contends that it is not the case of the Respondents, that they never utilised works belonging to the `Appellant', Comp. App (AT) No. 59 / 2024 Page 10 of 35 and therefore, in the absence of `any dispute', raised as contemplated under Section 33A, it is established beyond the reasonable doubt, that the `Appellant', is the `Creditor' of both the Respondents.
25. According to the Appellant, the Copyright Act, 1957, places a `Reverse Burden', upon the Respondents, to challenge the `Proprietary of the Tariffs', published by the `Appellant', and if they are `Aggrieved', but too, after effecting the `Payments of the Royalty', as published by the `Appellant'.
26. The Learned Counsel for the Appellant, points out that the C.A. 320 / 2023 in CP No. 200 / 2023, was filed, before the `Tribunal', praying for a `Copy of the CA (CA)/48/MB/2023 and all connected Documents, but, the same was rejected by the `Tribunal', on irrelevant facts, and added further, that the `Tribunal', had erred in deciding upon matters, which are not subject matter and Reliefs of the Application.
27. The Learned Counsel for the Appellant, refers to the decision of the Hon'ble Supreme Court of India, in `International Confederation of Societies of Authors and Composers (ICSAC) v. Aditya Pandey and Ors.', reported in (2017), 11 SCC at Page 437, wherein, at Paragraph No. 22, it is observed as under:
22. ``In view of the above settled principles of law, and for the reasons discussed by us, we are unable to find any error in the impugned order passed by the High Court in a suit filed in 2006. However, we would like Comp. App (AT) No. 59 / 2024 Page 11 of 35 to clarify, that with effect from 21.06.2012, in view of sub-section (10) of Section 19, the assignment of the copyright in the work to make sound recording which does not form part of any cinematograph film, shall not affect the right of the author of the work to claim an equal share of royalties or/and consideration payable for utilization of such work in any form by the respondent - plaintiff.'' (Emphasis Supplied)
28. The Learned Counsel for the Appellant, adverts to the decision in `Indian Performing Right Society Limited v. Rajasthan Patrika Pvt. Ltd.' (vide Interim Appln. (L) No. 9452 / 2022 in Comm. IP Suit No. 193 / 2022), reported in 2023 SCC OnLine Bom 944, wherein at Paragraph Nos. 45 to 48, 58 & 59, it is observed as under:
45. ``The plaintiff - IPRS has been able to make out a strong prima facie case in its favour on the strength of the above-quoted provisos to Section 18 of the Copyright Act, for the reason that the rights of authors of such literary and musical work have been placed at a high pedestal in the said provisos. It is clear that such authors, by a legislative tool, have been prohibited from assigning or waiving their right to receive royalties for the utilization of their works in any form, under the third proviso to Section 18 of the Copyright Act, other than for the communication to the public of such works along with the cinematograph film in a cinema hall.
This Court is of the opinion that the words 'with the cinematograph film in a cinema hall' make it abundantly clear that the moment such works are utilized in any form other than in a cinema hall, the authors are entitled to receive royalties.
46. Similarly, insofar as sound recordings not forming part of cinematograph film are concerned, the prohibition by way of such a legislative tool is even wider, because it provides that such authors would have the right to receive royalties 'for any utilization of such works' qua a sound recording not forming part of a cinematograph film. Comp. App (AT) No. 59 / 2024 Page 12 of 35
47. This substantive right to royalty in such authors is further emphasized by sub-sections (9) and (10) of Section 19 of the Copyright Act, which indicate that the right of such authors to claim royalties remains unaffected in case of utilization of their works, in the case of a cinematograph film when it is communicated to public other than in a cinema hall, and in the case of a sound recording, whenever it is utilized in any form.
48. This Court is of the opinion that when the proviso added to Section 17 and third and fourth provisos added to Section 18 along with sub-sections (9) and (10) added in Section 19 of the Copyright Act are read together, the exclusive right of entities like the defendants herein, while communicating the sound recordings to the public becomes subject to the aforementioned provisions incorporated by amendment in Sections 17, 18 and 19 of the Copyright Act. The purpose and object of the amendment appears to have been achieved when Sections 13 and 14 (with the words 'subject to the provisions of this Act') are read with the amended Sections 17, 18 and 19 of the said Act.
58. Equally, the contention raised by Mr. Khambata that the words 'subject to the provisions of this Act' used in Sections 13 and 14 are relatable only to Section 52 of the Copyright Act, is an attempt on the part of the defendants to turn a complete blind eye to the incorporation of the aforementioned provisos in Sections 17 and 18 and sub-sections (9) and (10) of Section 19 of the Copyright Act. In order to avoid the obvious impact of the said amendments, the defendants have claimed that there is no change in position of law as laid down by the Supreme Court in the context of the unamended Copyright Act in the year 1977 in the case of IPRS Vs. Eastern Indian Motion Pictures Association and others (supra).
59. This Court is of the opinion that the nature of amendments brought about in the Copyright Act in the year 2012 need to be considered in the backdrop in which such amendments became necessary. Reference is already made to the Report of the Standing Committee of Parliament, which led to introduction of amendments as also the Statement of Objects and Reasons for bringing about such amendments. All of them point towards additional protection of rights envisaged for authors of such literary and musical works, who had hitherto lost all their rights once Comp. App (AT) No. 59 / 2024 Page 13 of 35 they were assigned to the producers of cinematograph films incorporating sound recordings or sound recordings as such. Therefore, this Court is not in agreement with the opinion expressed by the learned Single Judge of the Delhi High Court (Endlaw, J.) in the order dated 04.01.2021 passed in IPRS Vs. Entertainment Network (India) Limited (supra). As noted hereinabove, in the first place, when the suits themselves concerned disputes between the parties pertaining to a period prior to introduction of the amendment in the year 2012 (admittedly, the suits were filed in the year 2006 and 2009), in that sense, the Court in the said suits was not called upon to decide the impact of the amendments of the year 2012. The fact that the suits were filed much prior to the introduction of the amendments is noted in the said order of the Delhi High Court. Yet, the Delhi High Court in the said order proceeded to consider the effect of the said amendments and in a short discussion, consisting of only two paragraphs, concluded that the amendments brought about in the year 2012 in the Copyright Act were merely clarificatory in nature. The aspect of the use of the words 'subject to the provisions of this Act' in Sections 13 and 14 read with the provisos introduced to Sections 17 and 18 and sub-sections (9) and (10) in Section 19 of the Copyright Act, was not considered or was perhaps not brought to the notice of the Delhi High Court in the said case. There is no reference to the objects and reasons for which the amendment was brought about, and therefore, this Court is not persuaded to accept the opinion of the Delhi High Court in the said case, that the amendments of the year 2012 were merely clarificatory in nature and that the position of law has not undergone any change at all.''
29. The Learned Counsel for the Appellant, points out that in the aforesaid decision in Indian Performing Right Society Limited, 2023 SCC OnLine Bom. 944, wherein at Paragraph Nos. 45 to 48 (mentioned Supra), in respect of Appellant's right, post the Amendment in the Copyright Act, in the year 2012, the `Law', was lay down and since, there was `no Stay' on the aforesaid Comp. App (AT) No. 59 / 2024 Page 14 of 35 `Order', it clearly proves that the `Appellant' is the `Creditor' of the `Respondent Companies'.
30. The Learned Counsel for the Appellant, submits that the Respondents had admitted (i) that they had entered into Settlement of Appellant's past dues, through a `One Time Settlement'. (ii) that the Second Respondent in response to the Notice of Claim dated 31.05.2022 of Rs.128,22,92,877/-, had partly admitted the Appellant's Claim, in their Correspondence dated 25.06.2022, which reads as under:
``c. Use of underlying works in the performances as part of reality shows:
i. A small part of cinematograph films, specifically, reality TV shows broadcasted through our Client's channels has performances as part of TV shows which uses underlying musical and / or literary works independent of the sound recordings and / or cinematograph films. Only in reference to this specific category of use, our Client has instructed us to state and clarify that our Client is agreeable to discuss, negotiate and pay royalty for communication to the public of underlying works (independent of a cinematograph film) owned and administered by IPRS which may be used by our Client in reality shows, independent and not pre-incorporated in the sound recordings and / or cinematograph films, at reasonable rates.''
31. It is represented on behalf of the Appellant, that it filed a CP (IB) No. 1100 / 2023, against the First Respondent for a Claim of Rs.44,44,00,000/- and CP (IB) No. 1102 / 2023, against the Second Respondent for a Claim of Rs.254,19,44,137/-, as per Section 9 of the I & B Code, 2016, and further that Comp. App (AT) No. 59 / 2024 Page 15 of 35 the `Adjudicating Authority' / `Tribunal', was pleased to issue `Notice', to both the Respondents and directed the `Respondents', to file a `Reply', on or before 20.12.2023. Moreover, the `Appellant', is able to establish, that it is the `Appellant' of both the `Respondents'.
32. The Learned Counsel for the Appellant, points out that the Respondents interpretation, as per proviso to Section 230 (4) of the Companies Act, 2013, the `Creditor', has to be included in the `Audited Balance Sheet', in itself, give raise to `illegality' that the Company, would have the Power to exclude any person, out of the `Balance Sheet', and stop him from raising objections.
33. In fact, such an `Interpretation', wholly against `Public Policy', as it is a settled law, that a `Scheme', cannot be in violation of any Laws, opposed to `Public Policy', and against `Public' or `Unconscionable'.
34. The Learned Counsel for the Appellant, submits that the Appellant has made out a case for setting aside the `Impugned Order', dated 09.02.2024 in C.A. 320 / 2023 in CP No. 200 / 2023, passed by the `NCLT', Court No. V, Mumbai Bench, and further that, Rule 16 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and Section 230(4) of the Companies Act, 2013, do not come in the way of granting Documents to the Appellant and affording him to raise objections, if any. Comp. App (AT) No. 59 / 2024 Page 16 of 35 Respondents Contentions:
35. The Learned Senior Counsel for the Respondents submits that the instant `Appeal', preferred by the `Appellant', has no merits and deserves to be dismissed on all grounds, including lack of `Locus' and on `No Cause of Action'.
36. According to the Respondents only a `Creditor', as per the `Audited Financial Statements' of the `Transferor / Transferee Companies' or a `Shareholder of the Transferor / Transferee Companies', has the `Locus' to intervene in a `Scheme', to oppose the same, as per decision in Astorn Research Limited, reported in (2013) SCC OnLine Guj 1510 (vide Common Judgment dated 02.04.2013 in CP No. 193-197 of 2012 of the Hon'ble High Court of Gujarat. Therefore, the `Tribunal', while rejecting the Appellant / Applicants request's for Documents, had rightly examined the Appellant's entitlement to the `Reliefs', prayed for, in its `Application', on the touch stone of whether the `Appellant', is the `Creditor' of the Respondents or not and whether it is entitled to `oppose the Scheme or otherwise'.
37. The Learned Counsel for the Respondents, takes a plea that Section 230(4) of the Companies Act, 2013, provides that apart from the `Shareholders holding 10%', only those `Creditors', having 5% of the `Total Outstanding Comp. App (AT) No. 59 / 2024 Page 17 of 35 Debt', as per latest `Audited Financial Statements', can make any objection to a `Scheme of Amalgamation'.
38. According to the Respondents, the Appellant, is neither a `Shareholder' nor a `Creditor' of the Respondents, as per the latest `Audited Financial Statements'. In fact, only those who fulfil the requirements of Section 230(4) of the Companies Act, 2013, are `Interested Parties', who can object the `Scheme', and are therefore, entitled to pray for a `Copy of the Documents'. In reality, Section 230(4) of the Companies Act, 2013, specifically requires one to be `Creditor' as per the `Financial Statements', to be able to object to a `Scheme'.
39. It is represented on behalf of the Respondents, that the Respondents Advertisement (`Scheme Hearing Advertisement'), is made under Rule 16 of the Companies (`Compromises, Arrangements and Amalgamations') Rules, 2016, which relates to Advertising, the `Notice of Hearing'. As per Rule 35 of the NCLT Rules, 2016, being a `general rule' for any `Advertisement of a Petition / Application', is not the `Rule', under which, the `Scheme Hearing Advertisement', has been published.
40. Further, the `Tribunal', through its `Order', dated 08.09.2023 (vide Paragraph No. 7(a)), while admitting the `Company Petition', had directed the publication of the `Scheme Hearing Advertisement', under Rule 16 of the Amalgamation Rules.
Comp. App (AT) No. 59 / 2024 Page 18 of 35
41. The Learned Counsel for the Respondents, points out that Rule 35 of the NCLT Rules, 2016, is `inapplicable' and any arguments resting upon the same, must be `rejected'. Moreover, the Format in Form 3A, was used by the Respondents `incorrectly'. Also that, Rule 16 of the Amalgamation Rules, 2016, must be seen in the context of substantive provision regarding, `who is entitled to object the Scheme', and the `ingredients of Section 230(4) of the Companies Act, 2013', confines such right to object only to `Creditors' and the `Shareholders', as per the latest `Audited Financial Statements'.
42. The Learned Counsel for the Respondents submits that the term `Any person, mentioned in the `Scheme Hearing Advertisement', would only be a Person, who is entitled to object, as per Section 230(4) of the Companies Act, 2013. Also that, the Appellant's Claim is a `Disputed Claim', and hence, the `Appellant', is `not entitled to oppose the Scheme'.
43. According to the Respondents, the Appellant is not recognised a `Creditor' in the `Financial Statements' of both the `Respondents', and in fact for Novi, the Appellant / IPRS, has not even addressed any Correspondence / Notice / Demand to Novi, before filing the Appellant's Application. As regards Star, the Legal Notice dated 31.05.2022, addressed to Star is at the highest a `Disputed Claim' - Viz. a `Claim' seriously disputed by `Star'.
Comp. App (AT) No. 59 / 2024 Page 19 of 35
44. The Learned Counsel for the Respondents, contends that when a Claim is raised by the `Objector', being a `Disputed Claim', and unless, such a `Dispute' or `Liability' are crystallised and settled in an Appropriate `Court' / `Forum', ofcourse, in `Appropriate Proceedings', the `Scheme', cannot be stopped or delayed , and places reliance upon the decisions in (i) Emco Limited's case, reported in (2004) SCC OnLine Bom 422 (vide Paragraph Nos. 16 to 18) and
(ii)Astorn Research Limited(2013) SCC OnLine Guj 1510 (vide Paragraph No.
9).
45. The Learned Counsel for the Respondents, proceeds to point out that just publishing of `Tariff Scheme', as per Section 33A of the Copyright Act, 1957, does not give raise to `any Debt'. In reality, the publication of a tariff is only in aid of the Business of the Copyright Society to issue and grant licences in respect of the `works' it `administers'. That apart, the applicability of any `Royalty Rates', including any of the `Appellant' / `IPRS Published Tariff' or otherwise, is to be seen in the context of other provisions of the Copyright Act, 1957.
46. The Learned Counsel for the Respondents, adverts to Section 30 of the Copyright Act, which provides that, the `Owner of the Copyright', may grant any Interest, in the right, by way of `Licence', in writing by `himself' or by his `duly Authorised Agent'.
Comp. App (AT) No. 59 / 2024 Page 20 of 35
47. According to the Respondents, Section 30A of the Copyright Act, provides that the provisions of Section 19 of the Copyright shall, with any necessary adaptations and modifications, apply in relation to a licence under Section 30 of the Copyright Act as they apply in relation to assignment of copyright in a work, which consequently provide that licence of any copyright shall only be valid in the event the licence has been made in writing by the Licensor or his Authorised Agent.
48. The Learned Counsel for the Respondents points out that Section 30 of the Copyright Act, 1957, also applies to the Appellant, as mandated under Section 34(3) of the Copyright Act. Also that, in line with the Copyright Act, even the General Terms and Conditions, published by the Appellant along with its `Tariff' contemplate that all Licences, shall be executed by / on behalf of the `Appellant / IPRS'.
49. The pivotal plea of the Respondents is that the collection of `Any Royalty', is premised on there being a duly executed Licence, as per Section 30, read with 30A of the Copyright Act, 1957 and in the absence of any such written Licence, `no Debt', can be said to be `Due and Payable', and further that the `Licence', is mandatorily required to be in `Writing'.
50. It is the version of the Respondents that ``all shows / cinematograph films broadcast on Star's television channels and Novi's digital platform Comp. App (AT) No. 59 / 2024 Page 21 of 35 ``Disney+Hotstar'' are owned by Star, Novi or third parties (and where they are owned by third parties, are duly licenced to Star and / or Novi from such third parties) as the case may be.'' As such, no `Royalty' or any such `Sum', whether in terms of the `Tariff' or at all, is payable to the `Appellant'.
51. The Learned Counsel for the Respondents, brings to the notice of this `Tribunal', that the legal issue as to whether `Appellant / IPRS', is entitled to collect `Royalty', is not only as between the `Appellant / IPRS' and `Respondents', but, it is an industry wide issue, which is also pending determination, before the Hon'ble High Court of Delhi and Hon'ble High Court of Bombay (vide Order dated 04.01.2021) inter alia, held that the 2012 Amendments to the Copyright Act, 1957, are merely `clarificatory in nature', and there is no change in the `position of Law'.
52. The Learned Counsel for the Respondents points out the decision of the Hon'ble High Court of Delhi, in IPRS v. Entertainment Network (India) Ltd., reported in (2021) SCC OnLine Del 1, wherein, it is held that, there is no independent utilisation of underlying musical and literary works embodied in a `sound recording', when Broadcast. Hence, no `separate Licence', for `underlying works', is required.
Comp. App (AT) No. 59 / 2024 Page 22 of 35
53. It is further represented that the likewise proceedings are pending before the Hon'ble High Court of Bombay, wherein, by an Order dated 28.04.2023, it is held in favour of IPRS (vide decision in IPRS v. Rajasthan Patrika Pvt. Ltd., reported in (2023), SCC OnLine Bom 944). As on date, both the matters are pending in `Appeal', before the Hon'ble Division Benches of the respective `Courts'. Further, a specific issue was framed by the Hon'ble High Court of Delhi in this regard (By an `Order', dated 20.12.2021 in the decision in Entertainment Network (India) Limited v. IPRS), and added further, the Hon'ble Division Bench of Bombay, had suspended the operation of the Order of the Hon'ble Single Judge in the matter of IPRS v. Rajasthan Patrika Pvt. Ltd. (2023) SCC OnLine Bom 994), till 12.04.2024.
54. The Learned Counsel for the Respondents, submits that the Appellant / IPRS is `clutching on to a straws', by relying on the `earlier, without prejudice one time Letter Agreement', which was not to be treated as precedent for any future Agreements. Besides this, in the event of any noncompliance, without admission, the remedy for the same, as per Section 62 of the Copyright Act, 1957, exclusively lies within a `Civil Court', and as such, this `Appellate Tribunal' and `Tribunal', have no jurisdiction to entertain or decide these issues, arising from the Copyright Act, 1957, more particularly in proceedings relating to Amalgamation of Companies.
Comp. App (AT) No. 59 / 2024 Page 23 of 35
55. The Learned Counsel for the Respondents, contends that without prejudice, even if the Appellant / IPRS, were to be held a `Creditor', all `Liabilities', are being transferred to `Star', which is financially healthy with an `Assets worth INR 20,196.48 Crores as on 31.03.2022', which was increased to Assets worth INR 21,470.66 Crores as on year ending 31.03.2023.
56. The Learned Counsel for the Respondents, refers to clause 4.2.15 of the `Scheme', which proceeds to the effect, as under:
``All debts, liability (including contingent liabilities and outstanding tax demands, if any), guarantees, duties and obligations of every kind, nature and description of the Transferor Company, shall be deemed to have been transferred to the Transferee Company, and to the extent that they are outstanding on the Effective Date shall, without any further act, instrument, deed .... stand transferred to the Transferee Company and shall become the liabilities and obligations of the Transferee Company ...''
57. According to the Respondents, without prejudice, if the Appellant / IPRS Claim were to crystallise in future, it will enable it to `Claim' the same against `Star' and `IPRS' interest (if any created in the future) are adequately protected under the `Scheme'. In fact, the Appellant, on an earlier occasion, had acted in accordance with the aforesaid legal position and further that, when a `Scheme of Amalgamation', was approved between `Asianet Star Communications Pvt. Ltd.' (Transferor Company ASCPL) and `Star' (the Transferee Company), the Comp. App (AT) No. 59 / 2024 Page 24 of 35 Appellant / IPRS, has now made all its `Claims', in respect of `Asianet Star Communications Pvt. Ltd.', against the surviving `Transfer Company', Viz. `Star'.
58. The Learned Counsel for the Respondents, submits that a similar `modus operandi', of the `Appellant's Mala fide', is evident from the fact, that the Appellant / IPRS, has also filed a separate Petition / Application, under Section 9 of the I & B Code, 2016, against the `Respondents', to `arm twist' them into `payment' of its `unjustified' and `untenable Royalty Demands'.
59. The Learned Counsel for the Respondents, prays for dismissing of the instant `Appeal', along with IA No. 1269 / 2024 (Stay Application), with costs. Respondents Decisions:
60. The Learned Counsel for the Respondents, relies on the decision in Zee Interactive Multimedia Ltd., in Re, reported in 2002, SCC Online Bom 1414, wherein, at Paragraph 10, it is observed as under:
10. ``It was contended that the substratum of the transferor-company has been eroded completely and, therefore, the amalgamation should not be allowed. My attention was invited to the audited balance-sheets of the transferor-company as well as the transferee-company annexed to the petition. It was pointed out that so far as the transferor-company is concerned, its paid up capital is only Rs. 700 crores as against loans of over Rs. 127 crores. However, the asset side of the balance-sheet also shows assets of similar value and the loans appear to have been utilised for the purpose of acquisition of assets including fixed assets and current Comp. App (AT) No. 59 / 2024 Page 25 of 35 assets. In fact, the transferor-company had not even commenced the operation till the year ending March 31, 2001, and, therefore, the profit and loss account was also not drawn. Merely because the company has borrowed money for the purpose of acquisition of assets, it cannot be said that the substratum of the company is lost. Assuming without admitting that the substratum of the transferor-company is lost, the creditors of the transferor-company cannot object to the sanctioning of the scheme on the said ground because by amalgamation, they would not only be able to look to the assets of the transferor-company (whose substratum is allegedly lost) but also be able to look to the assets of the transferee-
company. It is not the case of the objecting creditors of the transferor- company that the substratum of the transferee-company is also lost. Therefore, such objecting creditors would have a better security for repayment of their debts and they are not adversely affected by the proposed scheme of amalgamation.''
61. The Learned Counsel for the Respondents, cites the decision in the matter of re Mayfair Limited, reported in 2003 (4) Maharashtra Law Journal at Page 663 Spl Pg: 667, wherein, at Paragraph No. 9, it is observed as under:
9. ``In the present case, the debt except to the extent of Rs. 51,154/- is not admitted. As against that debt, the transferor company claims to have a claim for damages. No compromise or arrangement is proposed with the objecting creditor or any of the creditors as all the debt and liabilities of the transferor company are being taken over by the transferee company.
It is not even the case of the objecting creditor that the transferee company is not sound and would not be able to pay it's debts after taking over the debts of the transferor company. The balance sheet shows that the transferee company is stronger than the transferor company. The transferor company is a subsidiary of a transferee company. It is not shown how the proposed scheme is unjust and unfair to the objecting creditor or to the creditors either of the transferor or transferee company. Both the companies have positive net worth. It is not shown even prima Comp. App (AT) No. 59 / 2024 Page 26 of 35 facie by the objecting creditor that he would be adversely affected by sanctioning of the scheme.''
62. The Learned Counsel for the Respondents, seeks in aid of the decision of the Hon'ble High Court of Bombay, in the matter of EMCO Limited and in the matter of Scheme of Arrangement between Vericalbiz.com (India) Ltd. and EMCO Ltd., wherein at Paragraph Nos. 17, 18 & 24, it is observed as under:
17. ``In view of this, even otherwise on merit in the present case, as affidavit of service is filed on record and as objector/intervenor/creditors are and through their respective lawyers, are objecting the Scheme of Arrangement, in my view the case of creditors and objection of dispensing the meeting as or majority decision of the creditors, cannot detain the Court from proceeding further with the Scheme is question.
The admitted position in this matter is also that the said meeting was dispensed with by the Court's order. It may be mentioned here that during the course of argument the basic submission of all the creditors/intervenor/objectors are that they are only interested in recovery of their dues and or amounts from the transferee company i.e. EMCO Ltd. There is no objection of any kind or of any creditors against the transferor company. The Scheme of Arrangement and its merit, if we tests, from this point of view that the creditors have no objection, if their money is paid. Then in a way they are not objecting to the basic Scheme of Arrangement in question. In fact they have no objection, if the Scheme is sanctioned subject to the respective payments of the respective creditors. Considering, the rival objection and contentions raised, by the parties, now as creditors have appeared before the Court and submitted their objections to the Scheme of Arrangement in question. I see there is no reason now to direct the parties to issue fresh individual notices or held meeting of such creditors again. I am considering the Scheme of Arrangement in question that it is fair, reasonable, sound and not contrary to the public interest or public policy. It may be mentioned here that except the objectors, intervenors, who appeared through their respective Advocates, made above submissions, as recorded. No one Comp. App (AT) No. 59 / 2024 Page 27 of 35 appeared and objected the Scheme. No claim appeared or submitted in submission in support of their opposition on behalf of Freeman Products (India), Ludhiana and M.R. Malpani, Subhash Chowk, Parli-Vaijnath. Mere sending their representation, objection on the record of the Court or to the petitioner company that itself is not sufficient. The practice and procedure of the company Court is well known. The objections are not in the format and are not sent at appropriate time. Even otherwise, after, considering, the merits of these two objections and as contended by the petitioner's Counsel, mere bald statement and without supporting any evidence in support of their objections and or claim, this Court cannot adjudicate or even decide such objections or pass any order on such objection, which are sent directly to the office of the Court. The amount referred in these two objections are disputed and are denying by the petitioner company. Therefore, on this sole ground itself, these two objection of intervenor creditors are rejected and cannot be considered while sanctioning Scheme or Arrangement in question.
18. The petitioner company by its affidavit dated 8th April, 2004, resisted the objection of the said Jain Parmar Electronic Pvt. Ltd. and placed on record the material to show that the said amount is not payable and due and disputed the exagerated amount as claimed by Jain Parmar Electronic, as same was with sole purpose to mislead the Court and to recover their alleged due by obstructing the sanctioning of the present Scheme. The petitioner company has again relied on C.A. certificate for their financial position and for the positive net worth, dated 7th April, 2004. Basically of the EMCO Ltd. subsidiary company, as on 31st December, 2003. The petitioners further contended that in the affidavit that, as per the said C.A. certificate, after the said merger in the net worth of the petitioners company and its subsidiary company i.e. Certicalbiz. Com (India) Ltd. would be Rs. 66,26,24,338/-. The equipments are still lying with the objectors. Therefore, there is no question of paying the alleged amount, as demanded by Jain Electronics, as referred above. The petitioners company contended that in fact the applicant is liable to pay the damages to the company for withholding the capital equipments. In view of this, the petitioner, submitted that intervenor has no locus stand to intervene the proceeding. Considering, the affidavit of the petitioner on record and controversy raised by both Comp. App (AT) No. 59 / 2024 Page 28 of 35 the parties, at this stage, this disputed amount cannot be adjudicated or finalized by the Court, while Sanctioning the Scheme in question. Subject to the settlement of their respective dispute and dues, parties are entitled to initiate or take out appropriate proceeding before appropriate forum. In my view, at this stage, this objection also cannot be considered and it is rejected.
24. Considering, the over all view of the Scheme of the arrangement in question, as well as the affidavit filed to oppose the objection as raised by the respective creditors and even after considering, the merit of the objection raised by the creditors. I am convinced that such creditors cannot object the sanctioning of the arrangement in question. In my view also if liabilities or dues are in dispute and unless those disputes or liabilities are settled, in appropriate Court or forum pending those proceedings, sanction of such Scheme of Arrangement cannot be hauled or stopped or delayed. All creditors or parties are free to take appropriate steps to recover those amounts, if those amounts are settled or crystalised by appropriate forum or Court. I am not considering at this stage, the case of any undisputed amount between the creditors and company. In the present case, petitioner's affidavit, as well as, material placed on record are sufficient to demonstrate, that the petitioner company have not admitted the said amount and in fact disputing vehemently the said exaggerated amount. The financial position of the company as recorded above, is sufficient to cover those liabilities or dues, if any. At this stage, in my view this itself cannot be the reason to haul sanction of Scheme of Arrangement.''
63. The Learned Counsel for the Respondents, adverts to the decision of the Hon'ble High Court of Gujarat in Astorn Research Limited, reported in (2013) SCC Online Guj 1510, wherein at Paragraph Nos. 8, 9 & 14, it is observed as under:
8. ``Intas Biopharmaceuticals Limited (the transferor company of Company Petition No. 196 / 12) filed Company Application No. 264 of Comp. App (AT) No. 59 / 2024 Page 29 of 35 2012 before this Court seeking dispensation of the meetings of the equity shareholders and the secured creditors on the basis of their written consent and for further direction to hold meeting of the unsecured creditors of the company. This Court (Coram: Abhilasha Kumari, J) vide order dated 31.07.2012 ordered dispensation of the meeting of the equity shareholders and the secured creditors and also directed to hold meeting of the unsecured creditors. This Court further directed the company to hold meeting of the unsecured creditors of the company on 07.09.2012 for the purpose of considering and, if thought fit, approving with or without modifications, the proposed scheme of arrangement in the nature of amalgamation of the company with IPL / transferee company, as proposed between the company and its unsecured creditors. It was further directed that at least 21 clear days before the meeting to be held, as aforesaid, a notice be issued to all the unsecured creditors in the prescribed manner and appointed Shri Jainand Vyas, Vice President-
Accountant or failing him Shri C.K. Yagnik, Head-Legal of IPL/the transferee company, as the chairman of the aforesaid meeting, which was ordered to be scheduled on 07.09.2012 and in respect of any adjournment(s) thereof. Other directions were also issued by this Court, including directing the chairman to submit report to this Court, the result of the said meeting, within 14 days from the conclusion of the meeting.
9. It appears from the record that the aforesaid meeting came to be held on 07.09.2012 and an affidavit to that effect has filed by Shri Jainand Vyas along with report of the chairman, which indicates that a resolution resolving the proposed scheme of amalgamation as prayed for came to be approved unanimously i.e. 100%.''
14. ...... therefore the objector has no locus standi to raise objections on the basis that he is shareholder. Similarly, the status of the Objector as a creditor is also not only doubtful but is a disputed and even if it is presumed, as observed earlier, it is less than even minimal for which the objector has other remedy under law and, therefore, on such ground the scheme cannot be halted.'' Comp. App (AT) No. 59 / 2024 Page 30 of 35 Meaning of Creditor:
64. The word `Creditor', is not limited to one whom a `Debt', is due on the `date of Petition' and who can `demand an immediate payment'. Even a person, having `pecuniary Claim', against the `Company', whether, `Actual or Contingent', is a `Creditor'.
Objection(s) to a `Scheme of Compromise' or `Arrangement'(s):
65. There is no straight jacket cast iron formula, that `Objections', were to be raised, only at the time `Final Hearing', not at the `time of Admission'. Raising of an objection, to a `Scheme of Compromise' or `Arrangement', means `Filing of an Application', before the `Tribunal'.
66. Because of proviso to Section 230(4) of the Companies Act, 2013, mandated `5% Value of Outstanding Debt', as shown in the `Audited Financial Statement' of the Company, the `Objectors', will have `no Locus', to raise any `objection, to the Scheme'.
67. If any `Objection' to `Compromise' or `Arrangement', is raised by the `Shareholders', the threshold limit to raise Objection, as per proviso to Sub-
section 4 of Section 230 of the Companies Act, 2013, is `not less than 10% of Shareholding in aggregate', held by such `Person'.
Comp. App (AT) No. 59 / 2024 Page 31 of 35
68. It cannot be gainsaid that since the `Creditors', were given a right, to file Objection, they were equally entitled, to prefer an objection, even without the threshold credit limit, mentioned in Proviso to Section 230(4) of the Companies Act, 2013.
Assessment:
69. Before, the `National Company Law Tribunal', Court No. V, Mumbai Bench, the `Appellant / Petitioner', had filed C.A. 320 / 2023 in CP No. 200 / 2023, praying for (i) passing of an `Order', in directing the Respondents / Original Applicants', to furnish a `copy of the CA No. (CAA) 48 / MB / 2023, together with all Annexures and all other connected documents, Applications / Petition, to the `Applicant' (ii) to grant 4 weeks' time to the Petitioner / Applicant, to file the `Objections', against the Scheme, after the receipt of the copies of the `First Motion Application'.
70. Before the `Tribunal', the First Respondent / Novi Digital Entertainment Private Ltd. (Transferor Company), had filed a `Reply', by averring that the Appellant / Petitioner, is not a `Creditor' of the `First Respondent', and that the present `Application', pertains to `Applicant's Alleged Claim' for `Royalty', in respect of the `Authors of Literary' and `Musical works' (underlying works), who are the members of the `Applicant'.
Comp. App (AT) No. 59 / 2024 Page 32 of 35
71. The stand of the First Respondent, before the `Tribunal', is that the `Applicant', is neither a `Creditor' nor a `Shareholder' of the First Respondent. In fact, as per the `Audited Financial Statements' of the `First Respondent', the `Petitioner / Applicant', is not a `Creditor' of the `First Respondent'.
72. Moreover, the Petitioner in C.A. 320 / 2023 in CP No. 200 / 2023, had claimed to be an `Unsecured Creditor' of the `First Respondent'. There is no averment made in the `Application', as to the basis of `such Claim' or `Quantum of Debt', i.e. allegedly owed to the Applicant, by the First Respondent.
73. It is the version of the First Respondent, that the `Appellant's Claim', as set out in the Application, at best, can be classified as a `Disputed Claim', which can be pursued, if at all, subject to Limitation), against the `Amalgamated Entity', before a `Competent Court of Law', and further, the `Application', lacks any merit.
74. As far as the present case is concerned, the `Respondents' do not consider the `Appellant / IPRS', as its `Creditor' and have consistently and seriously disputed the `Appellant's Alleged Claims'. Indeed, the Appellant, was not recognised as `Creditor' in the `Financial Statements' of both the `Respondents'.
75. Added further, once a `Claim', is `Disputed', and the `Claimant', is not reflected as a `Creditor', in the `Audited Financial Statements', such `Claimant', is `disentitled to Intervene', demand `Documents' or `Object', to a `Scheme', and it is outside to the purview of Section 230 - 233 of the Companies Act, 2013, before the `Tribunal', to enter into the `Merits of the Dispute'. Comp. App (AT) No. 59 / 2024 Page 33 of 35
76. Apart from the above that when a `Claim', is raised by an `Objector', being a `Disputed Claim', and unless, such a `Liability' or `Dispute', are `crystallised', and settled in a `Competent Court / Forum', the `Scheme', cannot be `altered' or `delayed'.
77. In this connection, this `Tribunal', pertinently points out the `Scheme', has a `specific clause 4.2.15' (made mention of at Paragraph No. 56 of this Judgment), contemplating `Transfer of all Liabilities', to the `Transferee Company' Viz. `Star'
78. On behalf of Respondents, it is brought to the notice of this `Tribunal' that the `Appellant / IPRS', before the `Adjudicating Authority' / `Tribunal', had filed an `Application', as per Section 9 of the I & B Code, 2016, against the Respondents, seeking necessary `reliefs'.
79. According to the Respondents, even if the `Appellant / IPRS', were to be held to be a `Creditor', `All Liabilities are being transferred to Star', which is a `financially healthy Company', with positive network.
80. The `Tribunal', in its findings at Paragraph No. 26 of the `Impugned Order' dated 09.02.2024 in C.A. 320 / 2023 in CP No. 200 / 2023, had clearly mentioned that the `Appellant / Petitioner's name', was not included in the `List of 194 Unsecured Creditors' of the `First Respondent' and 1215 Unsecured Creditors' of the `Second Respondent' (has annexed to CA Scheme No. 48 / 2023).
Comp. App (AT) No. 59 / 2024 Page 34 of 35
81. Be that as it may, this `Tribunal', on a careful consideration of respective contentions, advanced on either side, taking note of the surrounding facts and circumstances of the instant `Appeal', especially, in the teeth of the `Appellant' / `Petitioner', not figuring as a `Creditor' of the `Respondents', in terms of its `Audited Financial Statement', and the `List of its Unsecured Creditors', being duly authenticated, ofcourse, based on `verification', by the `Statutory Auditor', this `Tribunal', comes to a consequent conclusion, that the `Impugned Order', dated 09.02.2024, passed by the `National Company Law Tribunal', Court No. V, Mumbai Bench, by making an observation that the `Appellant', is not a `Creditor' of the Respondent Nos. 1 & 2, and as such, has `no Locus', to object to the process of the `Scheme', is free from any legal infirmities. Accordingly, the instant `Appeal' fails.
Disposition:
In fine, the instant Comp. App (AT) No. 59 / 2024 is Dismissed. The connected pending `Interlocutory Applications', if any, are `Closed'.
[Justice M. Venugopal] Member (Judicial) [Mr. Arun Baroka] Member (Technical) 04 / 04 / 2024 SR / MD Comp. App (AT) No. 59 / 2024 Page 35 of 35