Arihant Unitech Realty Projects Ltd vs Na

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI Company Appeal (AT) No. 162 of 2020 [Arising out of Order dated 13.02.2020 passed by the National Company Law Tribunal, Division Bench-I, Chennai in MA/102/2020 in CA/216 & 217/CAA/2018].

IN THE MATTER OF: Scheme of Amalgamation of Arihant Unitech Realty Projects Limited With North Town Estates Private Limited

M/s Arihant Unitech Realty Projects Limited, CIN: U74899TN2005PLC123508 No. 3, Ganapathy Colony, 3rd Street, Off. Cenotaph Road, Teynampet Chennai-600018. Represented by its Director Mr. Selvakumar Shanmugasundaram ...Appellant

Versus

Nil ...Respondent

Present:

For Appellant: Mr. Shivam Narang, Advocate.

Venugopal M. J

The Appellant/unlisted Public Limited Company has preferred the

instant Company Appeal as an 'Aggrieved Person', in respect of the order

1 Company Appeal (AT) No. 162 of 2020 dated 13.02.2020, passed by the National Company Law Tribunal, Division

Bench-I, Chennai in MA/102/2020 in CA/216 & 217/CAA/2018, who had

dismissed the petition for condonation of delay of 201 days filed by the

Appellant/Petitioner/Transferor Company.

2. The National Company Law Tribunal, Division Bench -I, Chennai while

passing the impugned order had among other things observed the following:

"... It is seen from the order

that the meeting of the equity

shareholders of the Transferor Company

had to be convened on 23.05.2019 and

the meeting of the Unsecured Creditors

was to be held on 16.05.2019 and in

relation to the Transferee Company the

meeting of the equity shareholders was

required to be convened on 23.05.2019

and those of the unsecured creditors on

16.05.2019.

Learned Counsel for the Applicants

represent that the meetings of the

shareholders and unsecured creditors of

the Transferor and the Transferee

2 Company Appeal (AT) No. 162 of 2020 Companies were duly held, as directed

and the reports of the Chairman have also

been filed, as per the directions.

In relation to filing of the Company Petition,

which was required to be filed within a

period of seven days from the date of filing of

the Chairman's reports, however, the same

came to be filed only on 24.01.2020 for

unavoidable causes resulting in delay of 201

days and in the circumstances this

Application is filed seeking for condonation of

delay in filing the Company Petition.

Perusal of the Application shows in

paragraph '4', which is the cause/ reason as

pointed out by the Counsel for the Applicant

for the delay in filing the Petition. However,

perusal of the circumstances resulting in the

delay in filing the Company Petition has failed

to clearly explain the delay caused in filing of

the Company Petition. Further, we find that

the reasons given there under cannot be

considered as unavoidable causes etc."

3 Company Appeal (AT) No. 162 of 2020 and resultantly dismissed the petition without costs.

3. Assailing the validity, correctness and legality of the impugned order

passed by the Tribunal, the Learned Counsel for the Appellant submits that the

'Appellant Company' and the 'Transferee Company' had duly complied with the

directions of the Tribunal, in convening and holding meeting of equity

shareholders and unsecured creditors. Further, in the said meetings, the 'Equity

Shareholders' and 'Unsecured Creditors' of 'Transferor' and 'Transferee'

Company unanimously approved the 'Resolution' approving the Scheme of

Amalgamation.

4. It is the stand of the Appellant that the Chairman of the meeting of the

'Unsecured Creditors' and 'Equity Shareholders' had filed reports of respective

meetings before the Tribunal, within the specified period. Also, that the

'Transferor' and 'Transferee' Company had served Notice of the Applications of

the 'Statutory Authorities' for their 'Reports' as directed by the Tribunal, for

consideration to sanction the scheme.

5. The Learned Counsel for the Appellant contends that the 'Scheme of

Amalgamation' is in the final stage of consideration and if such delay was not

condoned, it would cause a significant adverse impact on the business

operations of the 'Transferor' as well as the 'Transferee' Company.

6. The prime plea of the Appellant is that the 'Scheme of Amalgamation' is

formulated in the best interest of the Shareholders, Employees, Creditors and

other Stakeholders of the 'Transferor' and 'Transferee' Company and as a result

4 Company Appeal (AT) No. 162 of 2020 thereof, they should not be deprived of the benefits under the scheme, if the

delay in filing the petition was not condoned.

7. The Learned Counsel for the Appellant submits that the Tribunal had

failed to appreciate the fact that the period of delay cannot be construed to

measure the negligence on the part of the Appellant for the purpose of condoning

the delay. Moreover, the Appellant was not inactive and was not negligent in

taking steps for filing the Application for sanctioning of 'Scheme of

Amalgamation'. That apart, there was no gross negligence on the part of the

Appellant in filing the Petition before the Tribunal.

8. The Learned Counsel for the Appellant refers to the order dated

10.02.2016 in C.P 66 of 2015, in the matter of 'Sgpka Infratech Private Ltd.

And Anr.' passed by the Allahabad High Court, wherein it was observed as

under:

"....The delay in filing of the

second motion petition is adequately

explained and accordingly the same is

condoned."

9. The Learned Counsel for the Appellant adverts to the order dated

03.10.2016 in CO.APPL.(M) 139/2016 of High Court of Delhi, in the matter of

'Nandos Services India Private Limited' wherein in Co. Appl.3814/2016(Delay

in Refiling) the condonation of delay in refiling the accompanying Company

Application was allowed.

5 Company Appeal (AT) No. 162 of 2020

10. Yet another order dated 29.03.2017, passed in IA No. 5 of 2017 MC (C.PTN.

No. 1 of 2016(CP No. 1 of 2014) i) passed by the 'National Company Law

Tribunal', Guwahati Bench in 'Adhunik Cement Ltd.'(Petitioner) is relied on by

the Learned Counsel for the Appellant to show that the delay of 441 days in

preferring the connected restoration Application was condoned.

11. `The Learned Counsel for the Appellant points out the order dated

01.01.2019 of NCLT, Mumbai Bench, in MA 1340/2018 in CA(CAA) 537/230-

232/2018, wherein the delay of 22 days in filing Company Scheme Petition was

allowed subject to the payment of Rs. 2000/- as cost, to be paid in the account

of Prime Minister National Relief Fund.

12. It is to be relevantly pointed out that in MA/102/2020 in CA/216 &

217/CAA/2018 in CP/ /CAA/ filed by the Appellant as Petitioner/Transferor

Company (under Sections 230 to 232 of the Companies Act,2013 etc.) the main

prayer was for the condonation of delay of 201 days in filing the connected

Company Petition. As a matter of fact, at paragraph 4 of the Application it was

averred as follows:

"...It is submission of the Applicant

Companies that the delay in the filing

of the Company Petition was not an

act done wantonly by the Applicant

Companies and was due to their pre-

occupation with internal compliance

and closure of audit/accounts. I state

6 Company Appeal (AT) No. 162 of 2020 that no prejudice or injustice would

be caused to any of the stakeholders

involved in the present scheme of

amalgamation if the said delay were

to be condoned by this Hon'ble

Tribunal. I state that severe prejudice

and injustice would be caused if this

application is not allowed."

13. As regards the aspect of 'Condonation of Delay', the Tribunal is to

adopt/take lenient/liberal view of course, based on the facts and circumstances

of given case. Further, the very approach of the Tribunal ought to be pragmatic

and justice oriented in the considered opinion of this Tribunal. Further, the

Tribunal is to assess the 'due diligence' of parties craving for condonation. In

fact, failure to adopt/resort to vigilance or extra vigilance by the concerned party

ought not to be a ground for ousting it from 'Litigation.'

14. It is well settled principle in Law that if the 'explanation' offered does not

smack of mala fide, utmost consideration must be given to a Litigant/Suitor to

condone the delay.

15. As far as the present case is concerned, the

Appellant/Petitioner/Transferor Company in MA/102/2020 in CA/216 &

217/CAA/2018 in CP/ /CAA/ at Paragraph No. 4 had come out with reasons

that the delay in filing the Company Petition was not an act wantonly and that

the delay was due to their pre-occupation with internal compliance and closure

7 Company Appeal (AT) No. 162 of 2020 of audit/accounts, and that the said reasons ascribed by the

Appellant/Petitioner/Transferor Company do not smack of mala fide, as opined

by this Tribunal. Viewed in that perspective, the observation of the NCLT,

Division Bench-I, Chennai in the impugned order dated 13.02.2020 in

MA/102/2020 in CA/216 &217/CAA/2018, to the effect that the 'Perusal of the

circumstances resulting in the delay in filing the Company Petition has failed to

clearly explain the delay caused in filing of the Petition' etc. and finally dismissing

the Application/Petition is clearly unsustainable in the eye of Law. Therefore, this

Tribunal, to prevent an 'Aberration of Justice' and to 'Secure the Ends of Justice'

interferes with the impugned order passed by the NCLT, Division Bench -I,

Chennai and allows the instant Appeal by condoning the delay in question.

16. In fine, the present Appeal is allowed, but without Costs. The impugned

order dated 13.02.2020, in MA/102/2020 in CA/216 & 217/CAA/2018 is set

aside by this Tribunal, for the reasons assigned in this Appeal. Resultantly

MA/102/2020 is allowed. IA No. 2309/2020 is closed with direction to the

Appellant to file the certified copy of the impugned order dated 13.02.2020 of the

NCLT, Division Bench -I, Chennai within three weeks from today.

[Justice Venugopal M.] Member (Judicial)

[Shreesha Merla] Member (Technical) NEW DELHI 5th November,2020 SR

8 Company Appeal (AT) No. 162 of 2020