Raja Bahadur Welfare Association vs Okay Estate Developers Private Limite

IN THE MATTER OF: Raja Bahadur Welfare Association Shop No. 174, Ground Floor, 103, Raja Bahadur Building, X Lane Maulana Azad Road, Mumbai - 400 008 ...Appellant

Versus 1.Okay Estate Developers Pvt. Ltd. Shop No. 40 Harbour Crest Building, Ground Floor, Shivdas Champsi road, Mazgaon, Mumbai - 400 010 ...Respondent No.1

2.Grid Infradevelopers Pvt. Ltd. Shop No. 2 & 3, Plot No. 78, Raghunath Vihar, Sector 50E Seawoods, Nerul, Navi Mumbai Thane, 400 703 ...Respondent No.2

Present: For Appellant : Ms. Shrishty Punjabi, Advocate. For Respondents : Mr. Dhruv Gupta, Advocate for Respondent Nos. 1 & 2. JUDGMENT

DR. ASHOK KUMAR MISHRA, TECHNICAL MEMBER

1. The present appeal has been filed by the 'Appellant' - 'Raja Bahadur

Welfare Association' under Section 421 of the Companies Act, 2013 (for

short 'Act') against the impugned order dated 17.07.2020 passed by the

1 Company Appeal(AT) No. 37 of 2021 'National Company Law Tribunal, Mumbai Bench Court -II' ('Tribunal') in

CP(CAA)/945/MB-II/2020.

2. This is out of a case of scheme of arrangements between Scheme of

Arrangement between 'Okay Estate Developers Private Limited' (Demerged

Company) and 'Grid Infradevelopers Private Limited' (Resulting Company)

and their respective shareholders for Demerger of the Project Division of

'Okay Estate Developers Private Limited' into 'Grid Infradevelopers Private

Limited'.

3. The following reliefs are sought by the Appellant:

a. The records and proceedings of the Company Petition

CP(CAA)/945/MB-II/2020 be called for;

b. The Respondents company be directed to serve Appellant notice,

company scheme and entire proceedings of the original company

petition as stated above and also to serve all its creditors with notice of

'Demerger Petition' and also 'publication' in two newspapers have vide

circulation etc.

4. The Tribunal vide its order dated 17.07.2020 has passed the following

orders:

"Para 12 - the Petitioner Companies shall issue notices to (i) the

Central Government through the office of Regional Director

(Western Region), Ministry of Corporate Affairs Mumbai, (ii)

Registrar of Companies, Maharashtra, Mumbai, (iii) concerned

Income Tax Authority complete with PAN clearly indicated therein,

clearly indicating therein the date fixed for final hearing. The

Petitioner Companies may send the notice to regulators above

2 Company Appeal(AT) No. 37 of 2021 mentioned either by RPAD/Courier or by E-mail, due to the

lockdown situation prevailing at present.

Para 13 - At least not less than 10 days before the date fixed for

hearing, the Petitioner Companies to publish the joint notice of

hearing of Petition in two local newspapers viz., The Free Press

Journal in English and Translation thereof in Navshakti in Marathi

language both having wider circulation in the State of Maharashtra

as per rule 16 of the Companies (Compromises, Arrangements and

Amalgamations) Rules, 2016. Considering the present lockdown

situation owing to the Covid-19 pandemic, the petitioners will have

the option to publish notices online in the respective e-newspapers

editions.

14- the Petitioner Companies shall host the notices on their

respective websites if any.

15- the Petitioner Companies shall file a compliance report with the

Registry in regard to the directions given in this order in lieu of the

customary affidavit of service, due to the lockdown situation

prevailing now.

5. The Tribunal on 14.05.2020 has also passed the following orders:

"Para 12- Keeping in view the submission made by Learned

Authorized Representative for the Applicants, the meetings of the

unsecured creditors are dispensed with. However, the Applicant

companies are hereby directed to issue notices to all their

unsecured creditors by Registered Post AD/Speed Post AD/Hand

Delivery/Courier/ Email. Individual notice to all the unsecured

3 Company Appeal(AT) No. 37 of 2021 creditors shall be issued, enclosing a copy of the Scheme, and

clearly indicating therein that in case they have any objection,

they shall file the same before this Tribunal with a copy to the

Applicant companies or their counsel, within a period of thirty days

from the date of receipt of such letters.

13- The Applicant Companies to serve notice of the present

applicant complete with enclosures on (i) Regional Director

(Western Region), Ministry of Corporate Affairs Mumbai, (ii)

Registrar of Companies, Maharashtra, Mumbai, (iii) concerned

Income Tax Authority within whose jurisdiction the respective

companies are assessed to tax, clearly indicating the PAN of the

concerned company, pursuant to Section 230 (5) of the Companies

Act, 2013 and rule 8 of the Companies (Compromises,

Arrangements and Amalgamation's) Rules, 2016. If no response is

received by the Tribunal from such authorities within 30 days of

the date of receipt of the notice, it will be presumed that they have

no objection to the proposed Scheme.

14- the Applicant Companies shall also serve notice upon sectoral

regulator(s) as may be applicable to the Applicant Companies

pursuant to Section 230(5) of the Companies Act, 2013 as per rule

8 of the Companies (Compromises, Arrangements and

Amalgamations) Rules, 2016. If no response is received by the

Tribunal from such sectoral regulator(s) within 30 days of the date

of receipt of the notice it will be presumed that such sectoral

regulator(s) has no objection to the proposed Scheme.

4 Company Appeal(AT) No. 37 of 2021 15- The Applicant Companies shall file proof of compliance

electronically within 15(fifteen) days from the date on which the

last of the compliances as stated in above paragraphs are made

to, report to this Tribunal that the directions regarding issue of

notices have bene duly complied with."

6. The Appellants have alleged that the Respondent companies (Companies

involved in the scheme of arrangement) have not served upon notice to all

its creditors and have raised eyebrow that even the newspapers publication

have been done during the lockdown period and the newspapers are not

in much circulations. Once the Appellant came to know that an amount of

Rs. 1,48,33,407/- is shown as payable to them in their financial

statements, they became alert and asked the Respondent Companies to

provide them the 'Scheme of Arrangement' and other related financial

statements to go through the same for responding their views but the

Respondent companies failed to serve the same to them. They have not

been provided with the 'Statement of Account' to know their exact position

and also to comment on the 'Scheme of Arrangement'.

7. The Respondents have raised several issues including earlier withdrawal

of the application vide order dated 11.01.2021 by some other creditor in

Company Appeal (AT) No. 01 of 2021 and also on the authorized

representative of the Appellants apart from bar of limitation. The

Respondents are alleging that the appellant is neither the shareholder nor

a creditor of the Respondent companies and the amount shown as

outstanding is an unreconciled amount payable to 'Erstwhile owner' of

'Rajabhadur Building' from whom building was acquired by the

Respondents companies. The Appellants have nothing to do with the 5 Company Appeal(AT) No. 37 of 2021 outstanding amount and is not even a registered association. The creditors

have failed to file objections within 30 days as communicated by the

Tribunal vide order dated 14.05.2020. The Respondents are submitting

that the appellants are neither a creditor nor a shareholder so there was

not question of service notice on them. The Appellants are only 'tenants'.

8. We have gone through the submission made by the parties and are having

following observations:

i. On the question of limitations, the application has

been filed on 26.02.2021 vide diary no.25730. The

appeal is against the impugned order of the Tribunal

dated 17.07.2020. The Hon'ble Supreme Court

passed an order on 08.03.2021 while disposing Suo

Moto Writ Petition Civil No.3 of 2021 in para 2 has

observed that "in computing the period of limitation

for any suit, appeal, application or proceedings, the

period from 15.03.2020 till 14.03.2021 shall stand

excluded. Consequently, the balance period of

limitation remaining as on 15.03.2021, if any, shall

become available with effect from 15.03.2021".

Hence, this application has been filed within

limitation period.

ii. On going through the provisional balance sheet as

on 31.12.2019 (page no. 103 of the Reply by the

Respondent vide dairy No. 28551 dated 02.08.2021)

of the Respondent Company involved in the 'Scheme

of Arrangement' reflects that 'Rajabhadur Building' 6 Company Appeal(AT) No. 37 of 2021 payable account is approx.. 15% of total 'Unsecured

Creditors'. Hence, they are entitled to file any

objection to the Arrangements being more than 5%

of the total outstanding amount as per Section 230

(4) of the Act.

iii. This is a case of 'Resident Welfare Association'

comprising of tenants. He has declared himself as an

'Authorized Representative' through a notarized

affidavit.

iv. The respondents raising the issues that these

amounts are not payable to the tenants of

Rajabhadur Building but is payable to 'erstwhile

owner of Rajabhadur Building from whom the

building was acquired by the Respondent company,

then they should have furnished copy of auditors

certificate to "The Secretary" of "Rajabhadur Welfare

Association" which they have not so far done.

v. In view of the aforesaid facts and circumstances of

the case, the Respondents are directed to serve the

Appellants with notice, company scheme including

related papers within 30 days of the date of this

order. The Tribunal is to look into the objections of

the Appellants before final disposal of the petition.

With these directions and observations, the appeal is disposed of. IA

No. 529 of 2021 for stay of the proceedings is rejected. The appeal is

allowed to the extent as stated above. This judgment copy be served 7 Company Appeal(AT) No. 37 of 2021 to the 'Designated Registrar of NCLT Mumbai' for further necessary

action at their end.

Pending IAs, if any stands disposed of. Interim Orders, if any, passed

by this Appellate Tribunal stands vacated. No orders as to costs.

[Justice Jarat Kumar Jain] Member (Judicial)

(Dr. Ashok Kumar Mishra) Member(Technical)

20th September, 2021

New Delhi

Raushan.k

8 Company Appeal(AT) No. 37 of 2021