In September 2016, there was an announcement of one of the biggest consolidation deal in the telecom sector between Rcom and Aircel, however, the regulatory authority National Company Law Tribunal (NCLT) has passed an order on August 14, 2017 amidst the series of objections being filed against the proposed scheme of arrangement.
Though initially many objections were filed against admission of the petitions, amongst all the contenders Chennai Network Infrastructure Ltd (CNIL) put forth the arguments and the NCLT Bench has in detail dealt with the contentions of the said objector.
- According to CNIL it is an unsecured creditor of the resulting companies to the extent of Rs. 1532.34 crore. CNIL addressed a letter dated April 26, 2017 to the Aircel entities calling upon them to furnish the necessary information about the proposed scheme of amalgamation and requesting them to make payment of the amounts due to CNIL. Since they did not receive any response to the said letter, they filed this application stating that the scheme is prejudicial to the interest of the creditors, therefore this petition shall be rejected
- Meeting of the creditors could be dispensed with provided the persons having 90% of the value of outstanding debt consented for approval of such scheme, otherwise, it is imperative to hold creditors meeting.
- Also, since there is a special arrangement in respect to repayment, CNIL will fall under separate class, by falling so, the threshold limit of having outstanding debt not less than 5% of the total outstanding debt as per the latest audited financial statement, as per section 230(3) of the Companies Act, 2013 (‘the Act’), is applicable to the debt outstanding in respect to that class only, not to the total outstanding debt. Therefore, CNIL’s credit value would be more than 5% value of the debt of that class enabling it to protect its right in realization of its debt
- As per section 230(4) of the Act, raising objection shall be construed to be a right to raise objection in a meeting to which a person received notice, not in respect to raising objection before Tribunal in the sense that a proviso must be construed with reference to the main clause
- They also stated that this scheme, in any event, shall be an arrangement with creditors as well since it will be prejudicial to the interest of the creditors
- Relying upon the following cases: ICICI Bank Ltd. (2002) (2) MhLA 276, Re Northgate Technologies Ltd. [(2012) 172 company cases 438], Re UB Nissam Breweries Pvt. Ltd. [(2011) 167 company cases 562], applicant counsel stated that wherever arrangement between the companies and its members is likely to affect upon creditors adversely, then it would be proper for the court to exercise its judicial discretion to convene meeting of creditors unless majority of the creditors representing 3/4th in value of the credit or otherwise given consent for the same.
- CNIL has sought for a direction from the NCLT Bench for ordering creditors meeting before admitting this Company Scheme Petition
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