National Company Law Appellate Tribunal
Archernar Brand Technologies Private ... vs Registrar on 4 September, 2025
NATIONAL COMPANY LAW APPELLATE TRIBUNAL
PRINCIPAL BENCH, NEW DELHI
Company Appeal (AT) No. 171 of 2025
(Arising against the impugned order dated 10.06.2025 passed by the Hon'ble
National Company Law Tribunal, Chandigarh Bench (Court-II), in CA(CAA)
No. 20/Chd/Hry/2025)
IN THE MATTER OF:
Archernar Brand Technologies Private Limited
Having its Registered office at:
Inno House, 2nd Floor, Plot No. 9 (4 Bay), Sector 32, Sadar
Bazar, Gurgaon Haryana- 122001 ...Appellant No.1/
Second Transferor Company
Cephus Brand Technologies Private Limited
Having its registered office at Inno House, 2nd Floor,
Plot No. 9 (4 Bay), Sector 32, Sadar Bazar,
Gurgaon Haryana-122001 ...Appellant No.2/
Third Transferor Company
lmplexians Eco Solutions Private Limited
Having its registered office at lnno House, 2nd Floor,
Plot No. 9 (4 Bay), Sector 32, Sadar Bazar,
Gurgaon Haryana-122001 ...Appellant No.3/
Fourth Transferor Company
Lepus Brand Technologies Private Limited,
Having its registered office at Inno House, 2nd Floor,
Plot No. 9 (4 Bay), Sector 32, Sadar Bazar,
Gurgaon, Haryana-122001 ...Appellant No.4/
Fifth Transferor Comapany
Villain Lifestyle Private Limited,
Having its registered office at l11110 House, 2nd Floor,
Plot No. 9 (4 Bay), Sector 32, Sadar Bazar,
Gurgaon, Haryana-122001 ...Appellant No.5/
Sixth Transferor Company
Pyxis Brand Technologies Private Limited,
Having its registered office at Inno House, 2nd Floor,
Plot No. 9 (4 Bay), Sector 32, Sadar Bazar,
Gurgaon, Haryana-122001 ...Appellant No.6/
Seventh Transferor Company
Cont'd..../
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Helea Technology Private Limited
Having its registered office at Inno House, 2nd Floor,
Plot No. 9 (4 Bay), Sector 32, Sadar Bazar,
Gurgaon, Haryana-122001 ...Appellant No.7/
Eighth Transferor Company
Mensa Brand Technologies Private Limited
Having its registered office at lnno House, 2nd Floor,
Plot No. 9 (4 Bay), Sector 32, Sadar Bazar,
Gurgaon Haryana-122001 ...Appellant No.8/
Transferee Company
Present:
For Appellant: Mr. Arun Kathpalia, Sr. Advocate, Mr. Rohan Batra,
Mr. Rishabh Bhargava, Mr. Dhruv Sethi, Ms. Nidhi
Chaudhary, Ms. Diksha Gupta, Mr. Aditya Dhupar,
Advocates.
J U D G M EN T
(4th September, 2025)
INDEVAR PANDEY, MEMBER (T)
The present Appeal has been preferred under Section 421 of the
Companies Act, 2013, (hereinafter referred to as 'Act') challenging the
impugned order dated 10.06.2025 passed by the National Company Law
Tribunal (Adjudicating Authority), Chandigarh Bench (Court-II) in CA (CAA)
No.20/CHD/HRY/2025. The said order was passed pursuant to an
application filed by the Appellant Nos. 1 to 8 under Section 230 & 232 of the
Code, in relation to the Composite Scheme of Arrangement between the
Appellant Companies and their respective shareholders and creditors.
Company Appeal (AT) No. 171 of 2025
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2. The Appellants had jointly filed the First Motion in relation to the
proposed composite Scheme of Arrangement amongst Mensa Brand
Technologies Pte. Ltd., a Singapore entity, the ("Non-Applicant" or "First
Transferor Company") and the Appellants, namely, Archernar Brand
Technologies Private Limited ("Applicant No. 1" or "Second Transferor
Company"), Cephus Brand Technologies Private Limited ("Applicant No. 2" or
"Third Transferor Company"), Implexians Eco Solutions Private Limited
("Applicant No. 3 or "Fourth Transferor Company"), Lepus Brand Technologies
Private Limited ("Applicant No. 4" or "Fifth Transferor Company"), Villain
Lifestyle Private Limited ("Applicant No. 5" or "Sixth Transferor Company"),
Pyxis Brand Technologies Private Limited ("Applicant No. 6" or "Seventh
Transferor Company"), Helea Technology Private Limited ("Applicant No. 7" or
"Eighth Transferor Company") and Mensa Brand Technologies Private Limited
("Applicant Company 8" or "Transferee Company") and their respective
shareholders and creditors ("Scheme"). Applicant Nos. 1 to 7 are collectively
referred to as "Transferor Companies".
3. The Adjudicating Authority, by the impugned order, was pleased to
dispense with the requirement of convening meetings of the respective
shareholders and secured creditors of the Appellant Companies. However,
with respect to the unsecured creditors of the Appellant Transferor
Companies, the Adjudicating Authority declined to grant such dispensation
and instead directed that meeting of the remaining non-consenting unsecured
creditors be convened for seeking their approval to the proposed Composite
Scheme of Arrangement. Being aggrieved by the said refusal, the Appellants
Company Appeal (AT) No. 171 of 2025
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have preferred the present Appeal before this Hon'ble Appellate Tribunal. The
relevant extracts of the said paragraphs no. 23 to 25 are reproduced below:
"23. This Application was filed by the Applicant Companies
praying for dispensing with the requirement of convening the
meetings of the Equity Shareholders, preference
shareholders, secured and unsecured creditors of all the
Applicant Companies. Consent affidavits from equity
Shareholders of all the Applicant Companies are received.
Consent affidavits of preference shareholders of the Applicant
Company 8 are received. The remaining Applicant Companies
do not have any preference shareholders. Consent affidavits
from the Secured Creditors of the Applicant Company 3,
Applicant Company 5 and Applicant Company 8 are received.
The remaining Applicant Companies do not have any Secured
Creditors. Consent affidavits of the Unsecured Creditors of all
the Applicant Companies are received. The Scheme of
Arrangement has been approved by the respective Board of
Directors of all the Applicant Companies. The Applicant
Companies have deposed that no material inquiry, inspection
or prosecution has been initiated or pending against the
Applicant Companies and/or its directors and officers, which
can have bearing on its going concern status. The Applicant
Companies have filed the certificate, issued by statutory
auditors of the respective Applicant Companies certifying that
the Scheme is in compliance with the Accounting Standards
under Section 133 of the Act.
24. Having considered the facts and the objects of the Scheme
as stated in the application narrated hereinabove and
materials available on record, we are inclined to dispose of
this Company Application bearing CA(CAA) No.
20/Chd/Hry/2025 with the following directions:
a) The meeting of the Equity Shareholders of the all the
Applicant Companies is dispensed herewith, keeping in
view that all the Equity Shareholders have given their
consents by way of affidavits.
Company Appeal (AT) No. 171 of 2025
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b) The meeting of the Preference Shareholders of the
Applicant Company No. 8 is dispensed herewith, keeping
in view that all the Preference Shareholders have given
their consents by way of affidavits.
c) Since, there are no Preference Shareholders in rest of the
Applicant Companies, the requirement of convening the
meeting of their Preference Shareholders does not arise.
d) Since, there are no Secured Creditors in the Applicant
Company No. 1, Applicant Company No. 2, Applicant
Company No. 4, Applicant Company No. 6, Applicant
Company No. 7 the requirement of convening the meeting
of Secured Creditors does not arise.
e) The meeting of the Secured Creditors of the Applicant
Company No. 3, Applicant Company No. 5 and Applicant
Company No. 8 is dispensed herewith, keeping in view
that all the Secured Creditors have given their consents
by way of affidavits.
f) It is noted from the list of unsecured creditors of the
Applicant Transferor Companies that the highest
percentage of unsecured debt is of the Transferee
Company itself whose consent has been pivotal in
crossing necessary threshold. Therefore, it is directed
that meetings of unsecured creditors of all the Applicant
Transferor Companies except whose consent has already
been obtained be convened. physically at the venue, date
and time as decided by the Chairperson or through video
conference or other Audio-Visual means at the venue,
date and time as would be decided by the Chairperson
for the purpose of considering and, if thought fit,
approving with or without modification(s) of the scheme.
g) At least one month before the date of aforesaid meetings,
an advertisement about the convening of the said
meetings, indicating the day, date, place, and time, as
aforesaid, shall be published in English daily, i.e.,
Business Standard (English) and in Hindi daily i.e.,
Jansatta (Hindi) in all editions within the state of
Haryana. The publication shall indicate the time within
Company Appeal (AT) No. 171 of 2025
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which copies of the scheme shall be made available to the
concerned persons free of charge from the Registered
Office of the Applicant Companies. The publication shall
also indicate the statement required to be furnished
according to Section 102 of the Act read with Sections 230
to 232 of the Act.
h) At least one month before the date of the meetings to be
held as aforesaid, a notice in Form No. CAA 2 convening
the said meetings, indicating the day, the date, the place
and time aforesaid, together with a copy of the Scheme of
Arrangement, a copy of statement required to be
furnished pursuant to Sections 230 and 232 read with
Section 102 of the Companies Act, 2013, and Rule 6 of
the Companies (Compromises, Arrangements and
Amalgamations) Rules, 2016 and the prescribed form of
proxy shall be sent by Registered Post or Speed Post or
Registered Post or by Courier or E-Mail or Hand Delivery,
addressed to each of the Unsecured creditors of Applicant
Transferor Companies.
i) Mr. Rajeshwara Rao Vittanala, Ex-Judicial Member
NCLT, Mobile No. 8096419964, email ID:
[email protected], is appointed as the
Chairperson for the meeting to be called under this order.
An amount Rs. 1,50,000/- (Rupees one lac and fifty
thousand Only) be paid for his services as the
Chairperson.
j) Mrs. Krishna Anmol Singh, Advocate, Mobile No.
9818282596, Email ID: [email protected], is
appointed as the Alternate Chairperson for the meeting to
be called under this order. She will discharge the function
of Chairman in the absence of Mr. Rajeshwara Rao
Vıttanala. An amount of Rs. 1,00,000/- (Rupees one lac
only) be paid for her services as the Alternate
Chairperson.
k) Mr. Rohit Garg, Chartered Accountant, Mobile No.
9988901370, Email ID: [email protected],
is appointed as the Scrutinizer for the above meeting to
Company Appeal (AT) No. 171 of 2025
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be called under this order. An amount of Rs. 75,000/-
(Rupees seventy five thousand Only) be paid for his
services as the Scrutinizer.
l) The quorum for the meeting of unsecured creditors will be
determined by the Chairman in such a manner that
creditors present in the meeting represent at least 50% in
value as a whole of the class of creditors respectively as
the case may be.
m) In case, the quorum is not present within half an hour
from the time appointed for holding the meeting, then the
Chairman shall adjourn the meeting to the same day in
the next week at the same time and place. The intimation
about the adjourned meeting should be given to each
member/creditor as the case may be through e-mail or by
any other mode. If the quorum is still not present on such
adjournment date, then the Chairman may furnish a
report to that effect to NCLT within seven days thereafter
and seek further directions for modifying the quorum.
n) It is further directed that the voting through a valid proxy
has been dispensed by the Ministry of Corporate Affairs
vide circular no. 14/2020 dated 08.04.2020, hence,
meetings of members of any class of creditors shall not
be conducted or counted through proxy.
o) The Chairperson appointed for the aforesaid meetings
shall issue the advertisements and send out the notices
of the aforesaid meetings. The Chairperson is free to avail
the services of the Applicant Companies or any agency
for carrying out the aforesaid directions The Chairperson
shall have all the powers under the Articles of Association
of the Applicant Companies and also under the Rules in
relation to the conduct of the meetings, including to decide
any procedural questions that may arise at the meetings.
p) The Applicant Transferor Companies shall furnish a copy
of the Scheme free of charge within one day of any
requisition for the Scheme made by any creditor entitled
to attend the meeting as aforesaid.
Company Appeal (AT) No. 171 of 2025
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q) The Chairperson shall file an Affidavit not less than 7
(seven) days before the date fixed for the hearing of the
meetings and report to this Tribunal that the directions
regarding issuance of notices and advertisement of the
meetings have been duly complied with as per Rule 12 of
the Companies (Compromises, Arrangements and
Amalgamations) Rules, 2016.
r) It is further ordered that the Chairperson shall report to
this Tribunal on the result of the meeting in Form No.
CAA-4 along with an affidavit, as per Rule 14 of the
Companies (Compromises, Arrangements and
Amalgamations) Rules, 2016 within 7 (seven) working
days from the date of conclusion of the aforesaid
meetings. The Chairperson would be fully assisted by the
authorized representative/Company Secretary of the
Applicant Transferor Companies and the Scrutinizer, who
will assist the Chairperson and Alternate Chairperson in
preparing and finalizing the report.
s) The authorized representative of the Applicant Transferor
Companies, shall furnish an affidavit of service of notice
of meeting and publication of advertisement and
compliance of all directions contained herein at least a
week before the proposed date of the meetings.
25. All the aforesaid directions are to be complied with strictly
in accordance with the applicable laws including forms and
formats contained in the Act and rules by the Applicant
Companies."
4. The appellants have impugned the directions of the Hon'ble Tribunal in
Paragraph 24 (f) to (s) above, which provides for the meeting of unsecured
creditors and lays down the procedure for the same.
Brief facts of the case
5. Brief facts of the case are given below:
Company Appeal (AT) No. 171 of 2025
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(i) The case of the Appellants was that Mensa Brand Technologies Pte.
Ltd., the Non-Applicant/ First Transferor Company, is a Singapore-
incorporated investment holding entity. Appellant Nos. 1 to 8 here,
including the Transferee Company (Appellant No. 8/ Mensa Brand
Technologies Pvt. Ltd.), are subsidiaries of the First Transferor
Company and are engaged in diverse business activities, primarily
involving the manufacture and/or trading of products in the domains
of fashion, home and other décor, food and beauty, kitchenware, and
gardening. These companies operate under the parent brand
"Brnd.Me," along with a number of sub-brands tailored to different
product lines and markets. The scheme of arrangement proposed
among the Appellant Companies and their respective shareholders and
creditors is aimed at rationalizing the corporate structure, streamlining
operations, and achieving efficiency in management, while safeguarding
the interests of all stakeholders, including creditors, employees, and
shareholders.
(ii) On 28.03.2025, the Composite Scheme of Arrangement ("Scheme")
proposing the merger of the Transferor Companies into the Transferee
Company was approved by the Board of Directors of Mensa Brand
Technologies Pte. Ltd. Singapore.
(iii) The Boards of Directors of the Appellant Companies, on 01.04.2025, in
their respective meetings, considered and approved the proposed
Composite Scheme of Arrangement, subject to the sanction of the
Tribunal.
Company Appeal (AT) No. 171 of 2025
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(iv) Upon implementation of the Scheme of Arrangement, the net worth of
the Transferee Company is projected to increase significantly, with
assets exceeding liabilities, rising from INR 551.29 crores as of
31.12.2024 to INR 913.37 crores.
(v) The Appellants filed an application on 16.04.2025 before the Ld. NCLT
under Sections 230 to 232 read with Section 234 of the Companies Act,
2013 seeking dispensation from convening meetings of their respective
shareholders; secured creditors; and unsecured creditors for the
purpose of obtaining approval of the Scheme in accordance with the Act
and the applicable rules.
(vi) The NCLT passed the impugned order on 10.06.2025, granting the
reliefs sought to dispense with convening meetings of the shareholders
and secured creditors of the Appellants, but declined to grant
dispensation for holding meetings of the unsecured creditors of the
Appellant Transferor Companies.
(vii) Appellant Nos. 1 to 7 filed a modification application on 30.06.2025
before the NCLT, which was subsequently withdrawn by the Appellants,
while expressly reserving their right to file the present Appeal before
this Tribunal.
(viii) The Appellants have filed the present Appeal before this Appellate
Tribunal on 22.07.2025, contending that the NCLT exceeded its
jurisdiction by refusing to grant dispensation from convening meetings
of unsecured creditors under Section 230(9), despite acknowledging
that consent affidavits representing at least 90% in value of the
unsecured creditors of each Transferor Company had been obtained.
Company Appeal (AT) No. 171 of 2025
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Submissions of the Appellant
6. The Ld. Senior Counsel for the Appellants submitted that the impugned
order suffers from jurisdictional overreach and is devoid of any cogent
reasoning, rendering it ex facie unsustainable. It was further submitted that
the order contravenes the statutory scheme under Section 230 of the
Companies Act by arbitrarily disregarding valid consent affidavits, imposing
impractical and legally unworkable quorum requirements, and directing
meetings solely of the remaining non-consenting unsecured creditors.
7. The Ld. Sr. Counsel further submitted that the NCLT erred in refusing
to dispense with the meetings of unsecured creditors, despite the Appellants
having complied with the threshold under Section 230(9) of the Companies
Act, 2013, by filing consent affidavits from unsecured creditors representing
over 90% in value. It was further submitted by him that the Scheme does not
entail any compromise or arrangement with the creditors, nor does it affect
their rights or the financial capacity of the companies. Courts have
consistently dispensed with creditor meetings under such circumstances;
therefore, convening meetings of the remaining unsecured creditors is
unnecessary and without any meaningful purpose for the approval of the
Scheme.
8. It is the submission of Ld. Counsel that the remaining unsecured
creditors are minor vendors with negligible claims, most of which were already
settled as of 30.06.2025. Imposing a 50% quorum on a group representing
less than 10% of credit in value is impractical and unworkable. The Scheme
Company Appeal (AT) No. 171 of 2025
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does not alter creditor rights and the Appellants had already obtained consent
affidavits from unsecured creditors representing over 90% in value.
9. The Ld. Counsel argued that the NCLT's direction to hold meetings of
the remaining unsecured creditors, each holding less than 5% of the debt, is
arbitrary and unreasonable, as it empowers insignificant creditors to obstruct
and delay the Scheme, in clear contravention of the proviso to Section 230(4)
of the Companies Act, which prohibits such interference.
10. The Ld. Counsel submitted that as of 30.06.2025, the entire debt owed
by the Transferor Companies to the remaining unsecured creditors, whose
consents were not obtained, had been fully discharged, except for certain
disputed amounts relating to Appellant Nos. 5 and 6, namely INR 8,07,315.00
and INR 5,44,043.89. It was further submitted that, in these circumstances,
directing meetings of such creditors is infructuous, and the Impugned Order,
to that extent, is arbitrary, unduly burdensome, and liable to be set aside.
11. The Ld. Counsel further submitted that the Hon'ble NCLT failed to
consider Section 230(6) of the Companies Act, which provides that approval
by creditors representing three-fourths in value is sufficient to bind the entire
class. In the present case, the Appellant Transferor Companies had already
obtained consent affidavits from over 90% in value of their unsecured
creditors. Accordingly, convening meetings of the remaining unsecured
creditors, who collectively represent less than 10% in value, is unnecessary,
contrary to the statutory scheme, and wholly redundant.
12. The Ld. Counsel contended that the NCLT erred in denying
dispensation for unsecured creditors based solely on the Transferee Company
Company Appeal (AT) No. 171 of 2025
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holding the largest portion of debt. Section 230(9) does not distinguish
between related and unrelated creditors, nor permit disregarding valid
consents based on the creditor's identity. The Tribunal also failed to provide
any rationale or justification for ignoring these valid consents, contrary to the
statutory scheme.
13. It is the submission of Ld. Counsel that the NCLT failed to recognize,
that the proposed Scheme does not involve any compromise or arrangement
with the creditors. The Scheme is an arrangement solely between the
Applicants and their shareholders under Section 230(1)(b) of the Companies
Act, and not under Section 230(1)(a). It does not affect the rights or interests
of the unsecured creditors, and no liability of such creditors is diminished, as
all dues will be settled in the ordinary course of business.
14. The Ld. Sr. Counsel, in view of the foregoing facts and contentions,
prayed for the following reliefs:
(i) Allow the present Appeal;
(ii) Set aside the directions contained in Paragraphs 24(f) to 24(s) of the
Impugned Order dated 10.06.2025 passed by the Hon'ble NCLT in
CA(CAA) No. 20/Chd/Hry/2025, insofar as they pertain to convening
and holding meetings of the unsecured creditors of the Appellant
Transferor Companies;
(iii)Issue necessary directions for dispensation of the meetings of the
unsecured creditors of the Appellant Transferor Companies;
(iv) Pass such other order(s) as this Hon'ble Appellate Tribunal may deem
fit and proper in the facts and circumstances of the present case.
Company Appeal (AT) No. 171 of 2025
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Analysis and findings
15. We have gone through the documents on record and heard the Ld. Sr.
Counsel for the Appellant companies at great length.
16. Upon perusal of the record and hearing of the submission of the Ld. Sr.
Counsel, it is evident that the grievance of the Appellants pertain to (i) the
refusal of the NCLT to grant dispensation from convening meeting of the
unsecured creditors of the Transferor Companies under Section 230(9) of the
Act; and (ii) ordering the meeting of remaining unsecured creditors of
Applicant Transferor companies, except those whose consent has already
been obtained, is in violation of Section 230(6) of the Act. They have also
placed emphasis on the fact that the scheme of Arrangement does not affects
the rights of the unsecured creditors, and their debt obligations would be
taken over by the Transferee Company. The proposed Scheme of Arrangement
is under Section 230(1)(b) of the Act, which relates to the Members of the
Company.
17. The Appellants have demonstrated that they had obtained valid consent
affidavits from unsecured creditors representing over 90% in value in each
Transferor Company, which exceeds the statutory threshold prescribed under
Sections 230(6) and 230(9) of the Act. In their view, the refusal to grant
dispensation from convening meetings of the unsecured creditors was
contrary to the provisions of the Act. Similarly, the meetings of Creditors or
class of Creditors as prescribed in Section 230(6) of the Act would mandatorily
involve all such creditors, whereas the NCLT has ordered the meeting of only
Company Appeal (AT) No. 171 of 2025
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those creditors who have not filed their consent. Such an order clearly falls
foul of the scheme of Section 230(6) of the Act.
18. We first examine the Section 230 of the Companies Act 2013 which is
extracted below:
Section 230: Power to compromise or make
arrangements with creditors and members
(1) Where a compromise or arrangement is proposed--
(a) between a company and its creditors or any class of
them; or
(b) between a company and its members or any class of
them,
the Tribunal may, on the application of the company or of
any creditor or member of the company, or in the case of a
company which is being wound up, of the
liquidator, 1[appointed under this Act or under the Insolvency
and Bankruptcy Code, 2016 (31 of 2016), as the case may
be,] order a meeting of the creditors or class of creditors, or
of the members or class of members, as the case may be, to
be called, held and conducted in such manner as the
Tribunal directs.
Explanation. -- For the purposes of this sub-section,
arrangement includes a reorganisation of the company's
share capital by the consolidation of shares of different
classes or by the division of shares into shares of different
classes, or by both of those methods.
(2) The company or any other person, by whom an
application is made under subsection (1), shall disclose to
the Tribunal by affidavit--
(a) all material facts relating to the company, such as the
latest financial position of the company, the latest
auditors report on the accounts of the company and the
Company Appeal (AT) No. 171 of 2025
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pendency of any investigation or proceedings against the
company;
(b) reduction of share capital of the company, if any,
included in the compromise or arrangement;
(c) any scheme of corporate debt restructuring consented
to by not less than seventy-five per cent. of the secured
creditors in value, including--
(i) a creditors responsibility statement in the prescribed
form;
(ii) safeguards for the protection of other secured and
unsecured creditors;
(iii) report by the auditor that the fund requirements of
the company after the corporate debt restructuring as
approved shall conform to the liquidity test based upon
the estimates provided to them by the Board;
(iv) where the company proposes to adopt the corporate
debt restructuring guidelines specified by the Reserve
Bank of India, a statement to that effect; and
(v) a valuation report in respect of the shares and the
property and all assets, tangible and intangible,
movable and immovable, of the company by a registered
valuer.
(3) Where a meeting is proposed to be called in pursuance of
an order of the Tribunal under subsection (1), a notice of such
meeting shall be sent to all the creditors or class of creditors
and to all the members or class of members and the
debenture-holders of the company, individually at the
address registered with the company which shall be
accompanied by a statement disclosing the details of the
compromise or arrangement, a copy of the valuation report,
if any, and explaining their effect on creditors, key
managerial personnel, promoters and non-promoter
members, and the debenture-holders and the effect of the
compromise or arrangement on any material interests of the
Company Appeal (AT) No. 171 of 2025
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directors of the company or the debenture trustees, and such
other matters as may be prescribed:
Provided that such notice and other documents shall also be
placed on the website of the company, if any, and in case of
a listed company, these documents shall be sent to the
Securities and Exchange Board and stock exchange where
the securities of the companies are listed, for placing on their
website and shall also be published in newspapers in such
manner as may be prescribed:
Provided further that where the notice for the meeting is also
issued by way of an advertisement, it shall indicate the time
within which copies of the compromise or arrangement shall
be made available to the concerned persons free of charge
from the registered office of the company.
(4) A notice under sub-section (3) shall provide that the
persons to whom the notice is sent may vote in the meeting
either themselves or through proxies or by postal ballot to the
adoption of the compromise or arrangement within one
month from the date of receipt of such notice:
Provided that any objection to the compromise or
arrangement shall be made only by persons holding not less
than ten per cent. of the shareholding or having outstanding
debt amounting to not less than five per cent. of the total
outstanding debt as per the latest audited financial
statement.
(5) A notice under sub-section (3) along with all the
documents in such form as may be prescribed shall also be
sent to the Central Government, the income-tax authorities,
the Reserve Bank of India, the Securities and Exchange
Board, the Registrar, the respective stock exchanges, the
Official Liquidator, the Competition Commission of India
established under sub-section (1) of section 7 of the
Competition Act, 2002 (12 of 2003), if necessary, and such
other sectoral regulators or authorities which are likely to be
affected by the compromise or arrangement and shall
Company Appeal (AT) No. 171 of 2025
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require that representations, if any, to be made by them
shall be made within a period of thirty days from the date of
receipt of such notice, failing which, it shall be presumed that
they have no representations to make on the proposals.
(6) Where, at a meeting held in pursuance of sub-section (1),
majority of persons representing threefourths in value of the
creditors, or class of creditors or members or class of
members, as the case may be, voting in person or by proxy
or by postal ballot, agree to any compromise or arrangement
and if such compromise or arrangement is sanctioned by the
Tribunal by an order, the same shall be binding on the
company, all the creditors, or class of creditors or members
or class of members, as the case may be, or, in case of a
company being wound up, on the liquidator 2[appointed
under this act or under the Insolvency and Bankruptcy Code,
2016 (31 of 2016), as the case may be,] and the
contributories of the company
(7) An order made by the Tribunal under sub-section (6) shall
provide for all or any of the following matters, namely:--
(a) where the compromise or arrangement provides for
conversion of preference shares into equity shares, such
preference shareholders shall be given an option to either
obtain arrears of dividend in cash or accept equity shares
equal to the value of the dividend payable;
(b) the protection of any class of creditors;
(c) if the compromise or arrangement results in the
variation of the shareholders rights, it shall be given effect
to under the provisions of section 48;
(d) if the compromise or arrangement is agreed to by the
creditors under sub-section (6), any proceedings pending
before the Board for Industrial and Financial
Reconstruction established under section 4 of the Sick
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Industrial Companies (Special Provisions) Act, 1985 (1 of
1986) shall abate;
(e) such other matters including exit offer to dissenting
shareholders, if any, as are in the opinion of the Tribunal
necessary to effectively implement the terms of the
compromise or arrangement:
Provided that no compromise or arrangement shall be
sanctioned by the Tribunal unless a certificate by the
company's auditor has been filed with the Tribunal to the
effect that the accounting treatment, if any, proposed in the
scheme of compromise or arrangement is in conformity with
the accounting standards prescribed under section 133.
(8) The order of the Tribunal shall be filed with the Registrar
by the company within a period of thirty days of the receipt
of the order.
(9) The Tribunal may dispense with calling of a meeting of
creditor or class of creditors where such creditors or class of
creditors, having at least ninety per cent. value, agree and
confirm, by way of affidavit, to the scheme of compromise or
arrangement.
(Emphasis Supplied)
19. The Section 230 of the Companies Act deals with matters related to
power to compromise or make arrangements with creditors and Members The
three important subsections here are Section 230 (1)(b); 230(6); and 230(9).
20. The first contention of the Appellants is that the arrangement proposed
herein is under Section 230(1)(b) which relates to arrangement with members
of the company. There is no arrangement vis a vis the creditors as envisaged
under Section 230(1)(a) of the Act. The interests of the creditors are not
affected adversely in any manner by the said agreement. The rights and
Company Appeal (AT) No. 171 of 2025
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liabilities of all unsecured creditors remain entirely unaffected by way of the
Scheme, who shall be or have already been paid in the ordinary course of
business. The assets of the Transferee Company post-merger will be more
than sufficient to discharge their obligations as and when they arise.
21. Appellants have further submitted that the remaining unsecured
creditors primarily comprise small-value trade creditors, who are routinely
paid in the ordinary course of business. Accordingly, the purported debt owed
to them is operational and revolving in nature, and not long-term or financial
in character. Furthermore, as stated above, upon implementation of the
proposed Scheme, the Transferor Companies will merge into the Transferee
Company and all the creditors of Transferor Companies will become creditors
of the Transferee Company. Therefore, no prejudice is caused to the
'remaining unsecured creditors' for protecting whose interest the NCLT
passed the direction to hold meetings of such remaining unsecured creditors.
22. We note from the records that the net worth of the Transferee Company
as on 31-03-2024 would increase to Rs 913.37 Cr from Rs 551.29 Cr upon
implementation of the Scheme. The outstanding debt of unsecured creditors
on that date is approximately Rs 5.35 Cr, which is a very insignificant portion
of the Net Worth. We further note that the Appellants have made substantial
payments since then and by 30.06.2025 the outstanding unsecured debt has
shrunk to negligible amount.
23. We further take note that the First Transferor Company is a Singapore
entity, and an investment holding company. The Appellant companies
including the Transferee Company are subsidiaries of the First Transferor
Company Appeal (AT) No. 171 of 2025
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Company. This is a scheme of arrangement wherein a parent company along
with its 7 other subsidiaries is merging in one of the subsidiaries and creating
one single entity post-merger .
24. In regard to the compliance with Sections 230(9) and 230(6) of the Act,
the contention of the Appellants is that the Impugned Order is non-speaking
and devoid of any reasoning as no rationale has been provided by the Hon'ble
NCLT for directing convening of meetings of the remaining unsecured
creditors, despite its express observation that the "necessary threshold" of
consent by 90% of unsecured creditors by value is met. The only reason cited
by the NCLT is that "the highest percentage of unsecured debt is of the
Transferee Company itself whose consent has been pivotal in crossing the
necessary threshold." This purported rationale is ex facie untenable and
directly contrary to the express mandate of Section 230(9) of the Companies
Act, which does not draw any distinction among creditors or classes of
creditors for the purpose of computing the 90% threshold.
25. It is further submitted that the order requiring the convening of a
meeting of only the 'remaining' unsecured creditors of the Transferor
Companies, whose consent to the Scheme have not been obtained, is contrary
to the plain language and object of Section 230(9) and Section 230(6) of the
Companies Act 2013. Section 230(6) expressly states that, where a meeting of
creditors is held, approval of "majority of persons representing three-fourths
in value of the creditors" is adequate to bind the entire class of creditors.
26. Further Section 230(9) does not contemplate that the consent of
creditors or a class of creditors, holding at least 90% in value, can be excluded
Company Appeal (AT) No. 171 of 2025
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or disregarded, while computing the threshold for dispensing with meetings
of creditors or a class of creditors under Section 230(9), merely because they
are also a party to the scheme of arrangement. In other words, the provision
does not stipulate that the 90% value must be composed of "third-party"
creditors, nor does it exclude intra-group creditors or the Transferee Company
(as in the present case) acting in its capacity as a creditor. Such an artificially
invented limitation is contrary to the clear wording of Section 230(9) and
defeats the commercial purpose and procedural efficiency that Section 230(9)
seeks to promote.
27. We find merit in the contentions of the Appellant. Section 230(9) of the
Act does not provide any such artificial distinction between the unsecured
creditors. If 90% by value of unsecured creditors by way of affidavit agree to
the scheme of arrangement, then the Tribunal has the powers to dispense the
meeting of creditors or class of creditors. Any further subdivision would not
be in accordance with the law.
28. In this regard we have a look at the Section 232(1) of the companies act
2013 which deals with Mergers and Amalgamations of the companies
Section 232. Merger and amalgamation of companies. -(1)
Where an application is made to the Tribunal under section
230 for the sanctioning of a compromise or an arrangement
proposed between a company and any such persons as are
mentioned in that section, and it is shown to the Tribunal-
(a) that the compromise or arrangement has been proposed
for the purposes of, or in connection with, a scheme for the
reconstruction of the company or companies involving
Company Appeal (AT) No. 171 of 2025
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merger or the amalgamation of any two or more companies;
and
(b) that under the scheme, the whole or any part of the
undertaking, property or liabilities of any company
(hereinafter referred to as the transferor company) is
required to be transferred to another company (hereinafter
referred to as the transferee company), or is proposed to be
divided among and transferred to two or more companies,
the Tribunal may on such application, order a meeting of
the creditors or class of creditors or the members or class of
members, as the case may be, to be called, held and
conducted in such manner as the Tribunal may direct and
the provisions of sub-sections (3) to (6) of section 230 shall
apply mutatis mutandis.
(Emphasis Supplied)
29. It can be seen from the language of the section that when an application
is made before the tribunal under section 230 relating to arrangement for
merger or amalgamation of companies, the Tribunal may order a meeting of
the creditors or class of creditors etc to be called and such meeting shall be
conducted in the manner laid down by the sub sections (3) to (6) of section
230. It is clear from the language of the section that Tribunal has powers to
call the meeting of creditors, but such a meeting has to be conducted in
accordance with Section 230(6) in this case.
30. We further note that under Section 230(6) of the Companies Act, even
in a scenario, where the meeting of unsecured creditors is held; approval of
creditors representing only 75% in value is required and such decision is
Company Appeal (AT) No. 171 of 2025
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binding on the company, all creditors or class of creditors. In this case, if
such meeting would have been held in accordance with Section 230(6), the
result of the of such meeting would have been the same, as more than 90%
of unsecured creditors by value had already submitted their consent affidavit
to the scheme of arrangement. In essence such a meeting would have been
infructuous, leading only to delays in approval and unnecessary and
infructuous expenditure. The object and purpose of the section 230(9) is to
simplify the procedure of restructuring of companies by mergers,
amalgamations etc., where consent of 90% creditors is available. Contrary to
the objectives in this case NCLT has made it extremely complex going beyond
the scope of section 230(6).
31. We also note that by excluding unsecured creditors who have
consented to the proposed Scheme from attending such meeting, the NCLT
has, in effect, denied them their statutory right to participate in the
consideration and approval of the proposed Scheme at a duly convened
meeting in terms of Section 230(6) of the Companies Act. The Impugned Order
renders the consent obtained from the unsecured creditors of the Transferor
Companies, whose debt constitutes over 90% in value, meaningless. In true
sense, the order provides for veto power to less than 10% creditors, against
the consent given by more than 90% creditors by value in approval of scheme
of arrangement. Such an order is clearly and patently in violation of the
section 230(6) of the act.
Company Appeal (AT) No. 171 of 2025
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32. The appellants have cited a number of cases in support of their
contentions. These cases along with their applicability in the present matter
have been discussed in subsequent paragraphs.
33. Hon'ble Delhi High Court in Vodafone Spacetel Ltd. and Anr. [2013
SCC Online Del 6566] in a first motion joint application under Sections 391
and 394 of the Companies Act, 1956 in connection with a Scheme of
Amalgamation of Vodafone Spacetel Ltd. ('Applicant/Transferor Company
No.1'); Vodafone West Ltd. (Transferor Company No.2) and Vodafone Mobile
Services Ltd. (Applicant Transferee) Company) and their respective
shareholder in their Judgement in paragraphs no. 7, 11 and 13 held as
follows:
"7. The status of the equity shareholders, secured and
unsecured creditors of the Applicant companies and their
consents to the proposed Scheme are set out in a tabular form
as given below:
Name of Nos. of Conse No. of Consent No. of Consent
the Equity nt Secured given Unsecured given
company Shareh given Creditors Creditors
olders
Applicant/ 07 All 1 Dispens 3732 Dispens
Transferor ation is ation is
Company being being
No.1 sought sought
for for
Applicant/ 07 All 3 Dispens 1601 Dispens
Transferor ation is ation is
Company being being
sought sought
for for
11. As regards the requirement of convening the meeting of
the unsecured creditors of the Applicant companies is
concerned, it is submitted that the unsecured trade/sundry
creditors of the Applicant companies are cyclic in nature and
the Applicant companies are meeting such obligations in the
ordinary course of business. It is further submitted that in
Company Appeal (AT) No. 171 of 2025
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terms of the Scheme, there is no variation in the rights of the
unsecured trade/sundry creditors and there is no variation in
the amounts owed to such unsecured trade/sundry creditors.
The Applicant/Transferee company in terms of the Scheme
shall be taking over all the liabilities of the
Applicant/Transferor company No. 1 and undertakes to meet
and discharge the same in terms of Clause 3.2.2 (iii) of the
Scheme. The Applicant companies also undertake that upon
notice being issued by this Court on the second motion
petition for sanction of the Scheme, the Applicant companies
shall issue individual notice to all its unsecured creditors as
per list annexed at Annexure M and Annexure-P seeking their
objections if any to the Scheme."
13. In view of the aforesaid facts, the terms of the Scheme,
and the judgments as referred to by the learned Senior
counsel for the Applicant companies, the requirement of
convening the meeting of the secured and unsecured creditors
of the Applicant companies is dispensed with. The Applicant
companies shall issue notice of the second motion petition to
their respective secured creditors as per list annexed at
Annexure-L and Annexure-O to the company application and
to their respective unsecured creditors as per list annexed at
Annexure-M and Annexure-P to the company application.
(Emphasis supplied)
34. It is seen from the Vodafone (supra) that Hon'ble Delhi High Court has
considered the identical matter relating to unsecured trade/sundry creditors
whose dues are cyclic in nature and the Applicant companies are meeting
such obligations in the ordinary course of business. In terms of the scheme
also there is no variation in the rights of the unsecured creditors and there
is no variation in the amounts owed to such unsecured creditors. Hon'ble
Court dispensed with the requirement of convening the meeting of the
secured and unsecured creditors of the Appellant companies. The present
Company Appeal (AT) No. 171 of 2025
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case is squarely covered by the Judgment of Hon'ble Delhi HC in Vodafone
(supra) with the additional compliance that more than 90% of the unsecured
creditors have given their consent to the scheme.
35. The second case cited by Ld. Sr. Counsel relates of scheme of
amalgamation of : M/s Almondz Re-Insurance Brokers Pvt. Ltd.... Applicant
/Transferor Company with M/s Almondz Insurance Brokers Pvt. Ltd...
Applicant /Transferee Company in Company Application (Main) No. 27/2015
decided by Hon'ble Delhi High Court [2015 SCC OnLine Del 8401]. The
Hon'ble HC in paras 13, 15, 16 & 17 of the Judgment held as follows:
"13. As on 15th December, 2014, the transferor company
has 28 unsecured creditors holding unsecured debt of Rs.
18,73,56,949/-. The applicants have placed on record a
certificate issued by M/s. Pawan Shubham & Co., Chartered
Accountants certifying that out of 28 unsecured creditors, 17
unsecured creditors holding unsecured debt of Rs.
17,62,64,545/- have been paid off fully/partly by the
company, as on 30th January, 2015. Learned counsel for the
applicants has submitted that the transferor company is a
wholly owned subsidiary of the transferee company and
since it is an amalgamation of the wholly owned subsidiary
company with its holding company, therefore, rights of
unsecured creditors of the applicant companies will not be
affected adversely. He further submitted that the Scheme
does not contemplate any variation of the rights of the
unsecured creditors, nor does it contemplate extinction or
reduction of liability to any creditor. Learned counsel has
also submitted that on amalgamation of the transferor
company with the transferee company, the post
amalgamation net worth of the transferee company will be
Rs. 22,19,15,399/- as compared to its pre-amalgamation net
worth of Rs. 11,31,05,228/-. He has placed on record a
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certificate issued by M/s. Pawan Shubham & Co., Chartered
Accountants, showing the pre and post amalgamation net
worth of the transferor and transferee companies. He,
therefore, prays that the requirement of convening and
holding the meeting of the unsecured creditors of the
transferor company may kindly be dispensed with.
15. The unsecured creditors of the transferor company are
running creditors who are paid-off in the normal course of the
business of the company. A perusal of the audited balance
sheet of the transferor company, as on 31st March, 2014,
reveals that the company has reserves and surplus of Rs.
10,88,10,171/-. As per the certificate issued by M/s. Pawan
Shubham & Co., Chartered Accountants, the post-
amalgamation net worth of the transferee company will
enhance to Rs. 22,19,15,399/- as compared to its pre-
amalgamation net worth of Rs. 11,31,05,228/-. In addition,
the applicants have placed on record the certificate issued
by M/s. Pawan Shubham & Co., Chartered Accountant,
determining the liquidity position of the companies, which
shows that the liquid assets (including cash and bank
balance) of the transferor company, pre-amalgamation, are
to the tune of Rs. 37,18,61,504/-whereas the liquid assets
(including cash and bank balance) of the , are no transferee
company, post-amalgamation, are to the tune of Rs.
41,31,76,317/-. Therefore, the rights of the unsecured
creditors of the transferor company are not likely to be
affected and the transferee company will be in a position to
discharge all its liabilities, upon sanction of the Scheme of
Amalgamation. In view of the above and the settled law on
the subject, the requirement of convening and holding the
meeting of the unsecured creditors of the transferor company
to consider and, if thought fit, approve, with or without
modification, the proposed Scheme of Amalgamation is
dispensed with."
16. The transferee company has 08 equity shareholders and
03. unsecured creditors. All the equity shareholders and all
Company Appeal (AT) No. 171 of 2025
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the unsecured creditors have given their consents/no
objections in writing to the proposed Scheme of
Amalgamation. Their consents/no objections have been
placed on record. They have been examined and found in
order. In view thereof, the requirement of convening the
meetings of the equity shareholders and unsecured creditors
of the transferee company to consider and, if thought fit,
approve, with or without modification, the proposed Scheme
of Amalgamation is dispensed with. There is no secured
creditor of the transferee company, as on 15th December,
2014.
17. The application stands allowed in the aforesaid terms."
(Emphasis supplied)
36. We find from the Judgment in M/s Almondz Re-Insurance Brokers Pvt.
Ltd. (supra) that in this case also there were unsecured creditors in the
transferor company. The assets of the transferee company post scheme of
merger are substantially enhanced. The rights of the unsecured creditors of
the transferor company were not being adversely affected, as the transferee
company would be better placed to discharge all its liabilities upon the
sanction of the scheme of amalgamation. Keeping this in mind the Hon'ble
High Court dispensed with the requirement of convening the meeting of
unsecured creditors. The ratio laid down in the Almondz Re-Insurance
Brokers (supra) would squarely cover the present case.
37. We also take note of Judgment of this Appellate Tribunal in the matter
of 'Mohit Agro Commodities Processing Pvt. Ltd. and Anr... Appellant/
Transferor [2021 SCC OnLine NCLAT 1139]'. In its Judgement in paragraph
18 to 21 the Tribunal held the following:
Company Appeal (AT) No. 171 of 2025
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"18. The material on record establishes that the 'Transferee
Company' is a Wholly Owned Subsidiary of the 'Transferor
Company' and there is no issuance of any new shares and
therefore there is no reorganization of share capital and
consequently no arrangement wherein Shareholders have to
compromise with Creditors ''Transferor Company'. The
documentary evidence substantiates that the net worth of
the 'Transferee Company' is definitely positive.'
19. We find force in the contention of the Learned Counsel
appearing for the Appellants that there are no Creditors in
the subsidiary Companies and that the 'Transferee
Company' is the only Shareholder of the 'Transferor
Company'.
20. This Tribunal has placed reliance in 'DLF Phase IV,
Commercial Developers Limited and Ors.' in Company
Appeal (AT) No. 180 of 2019 and observed that the scheme
would not prejudicially affect the Creditors or Shareholders
of the Appellant Company when an Application is filed by the
'Transferor Company' or 'Transferee Company', a separate
Application is not necessary and dispensed with the meeting
of the equity Shareholders and Creditors of the Appellant
Company. At the cost of repetition, keeping in view that the
financial position of the 'Transferee Company' is highly
positive, the merger does not involve any
compromise/arrangement with any Creditor of the
Company, that there would be a positive net worth and
Creditors would not be compromised, the Tribunal ought to
have exercised the discretion in dispensing with the
requirement of convening the meeting which would facilitate
ease of doing business and save time and resources. To
reiterate, we observe that the rights and liabilities of Secured
and Unsecured Creditors were not getting affected in any
manner by way of the proposed scheme as no new shares
are being issued by the 'Transferor Company' and no
compromise is offered to any Secured and Unsecured
Creditors of the 'Transferee Company'. Therefore, we are of
Company Appeal (AT) No. 171 of 2025
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the considered view that when the 'Transferor and
Transferee Company' involve a parent Company and a
Wholly Owned Subsidiary the meeting of Equity
Shareholders, Secured Creditors and Unsecured Creditors
can be dispensed with as the facts of this case substantiate
that the rights of the Equity Shareholders of the 'Transferee
Company' are not being affected.
21. For all the aforenoted reasons, we allow this Application
and set aside the direction in respect of the Transferee
Company issued by the NCLT, to convene the meetings of the
Equity Shareholders, Secured Creditors and Unsecured
Creditors on 22.04.2021."
38. In the case of Mohit Agro (supra) the Appellant company was the
Transferor and Gujarat Ambuja Exports Ltd. was the 'Transferee Company'.
This was a case of scheme of amalgamation of a 'Transferor Company' with
the 'Transferee Company' w.e.f appointed date on the agreed terms and
conditions set out in the scheme in accordance with Sections 230 to 232 of
the Companies Act, 2013. The 'Transferor Company' was wholly owned
subsidiary of the 'Transferee Company' and both the companies were
incorporated in similar nature of activities. There were no Creditors in
subsidiary company in this case but there were creditors in 'Transferee
Company'. This Tribunal vide the Judgment supra held that the merger does
not involve any compromise/ arrangement with any creditor of the company
and that there would be a positive net worth and creditors would not be
compromised. In such a case the Tribunal ought to have exercise its
discretion in dispensing with the requirement of convening the meeting
which would have facilitated the ease of doing business and save time and
resources. The Tribunal further observed that the right and liabilities of
Company Appeal (AT) No. 171 of 2025
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secured and unsecured creditors were not getting effected in any manner by
the proposed scheme as no compromise was being offered to any secured or
unsecured creditor. In such a situation this Appellate Tribunal set aside the
directions of the NCLT to convene the meetings of Equity Shareholders,
Secured Creditors and Unsecured Creditors. We note that the ratio of the
Mohit Agro supra is squarely applicable to the facts of the present case.
39. In the case of 'Reliance Industries Ltd. Through Signatory vs. Registrar
of Companies [2023 SCC OnLine NCLAT 2082]. This Tribunal in paras 23-25
held the following:
"23. We note that in Section 232(1) of the Companies Act it is
left to the discretion of the Tribunal, as the word used is
"may", regarding the holding of meeting of the creditors or
class of creditors or members or class of members in the
manner directed by the Tribunal.
24. This discretion given in section 232(1) to the Tribunal has
been interpreted by Hon'ble Bombay High Court in the matter
of Mahaamba Investments Limited (supra) and Eurokids
India Pvt. Ltd. (supra) and also by this Tribunal in the matter
of Patel Hydro Power Private Limited (supra) that if the
Transferor Company is wholly owned subsidiary of the
Transferee Company and there is no reorganization of the
share capital of Transferee Company and the creditors and
shareholders of the Transferee Company are not affected by
the implementation of the Scheme as the assets of the
Transferee Company and the Transferor Company far exceed
their liabilities, the requirement for holding meetings of the
shareholders, secured and unsecured may be dispensed
with.
25. In the light of the detailed aforenoted discussion, and the
facts of this case wherein the transfer of EPC Undertaking
Company Appeal (AT) No. 171 of 2025
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from the wholly-owned subsidiary RPMSL (of RIL) into the
parent/transferee company RIL by way of demerger is akin
to merger of wholly owned subsidiary with the parent
company RIL, and noting the judgments of Hon'ble Bombay
High Court in Mahaamba Private Limited (supra) and this
Tribunal in the matter of Patel Hydro Power Private Limited
[CA (AT) No. 137 of 2021], we set aside the Impugned Order
dated 11.5.2023 and direct that the convening and holding of
meetings of Equity Shareholders, Secured and Unsecured
Creditors of the Appellant Company RIL is dispensed with
and further consent affidavits of 90% of the total value of
shareholders and secured creditors and all unsecured
creditors will not be necessary at this stage."
40. The case of Reliance Industries (supra) was also related to merger
between wholly owned subsidiary and the parent company and the net worth
of the Transferee Company after the implementation of the scheme would far
exceed the liabilities in such a case the requirement of holding meetings of
shareholders, secured and unsecured creditors may be dispensed with. Vide
the aforesaid Judgment this Tribunal even dispensed with the consent
affidavits of 90% of the total value of shareholders, secured creditors and
unsecured creditors. In the present case the holding company and its 7
subsidiary company are merging in the 8th subsidiary company. The case is
similar to the Reliance Industries (supra) except that it's a case reverse
merger, where holding company is merging in subsidiary. The aforesaid ratio
is squarely applicable in the present care also.
41. It is seen from the above Judgments that where a proposed scheme of
arrangement or merger does not entail any compromise or arrangement with
the creditors of the company or otherwise affect their rights and liabilities,
Company Appeal (AT) No. 171 of 2025
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and the company possesses sufficient assets and net worth to fully discharge
its liabilities, the requirement of convening a meeting of creditors ought to be
dispensed with.
42. We have also noted that subsequent to the decision of Ld. NCLT the
Appellant Transferor Companies, which had total unsecured debt of Rs. 5.35
crores as on 31.03.2024 have made further settlements with almost all of the
unsecured creditors and at the time of the filing of the appeal the total
outstanding unsecured debt was only Rs. 13.52 lacs in two companies.
43. In view of the findings above; the terms of the scheme; and the
Judgments cited by the Appellant Companies, we allow the appeal. The
directions contained in Paragraphs 24(f) to 24(s) of the Impugned Order dated
10.06.2025are set aside. The requirement of holding the meeting of unsecured creditors of Appellant Transferor Company is dispensed with.
[Justice Mohd. Faiz Alam Khan] Member (Judicial) [Mr. Indevar Pandey] Member (Technical) SA Company Appeal (AT) No. 171 of 2025