JUDGEMENT

[Per; Shreesha Merla, Member (T)]

1. Aggrieved by the Order dated 23.09.2021, passed by the NCLT (National Company Law Tribunal, New Delhi, Court-II) in C.A.(CAA)- 84/ND/2021, the Appellants „M/s. Ericsson India Private Limited‟ (the ‘Transferor Company’) and „M/s. Ericsson India Global Services Limited‟ (the ‘Transferee Company’) preferred this Appeal. By the Impugned Order, the NCLT has dismissed the Application C.A.(CAA)-84/ND/2021, filed under -2- Company Appeal (AT) No. 148 of 2021 Sections 230 to 232 of the Companies Act, 2013, (hereinafter referred to as the ‘Act’) praying to dispense with convening and holding of the Meeting of Shareholders and Creditors in relation to the ‘Transferor and Transferee Companies’ for approval of the Scheme of Amalgamation which shall take effect from the appointed date on 01.04.2021. The NCLT while dismissing the Application observed as follows: “25. That we further notice that there are 473 Unsecured Creditors representing a total outstanding unsecured debt of Rs.24,640.21 million as on 30.06.2021 against the Transferor Company.

Similarly, there are 177 Unsecured Creditors representing a total outstanding unsecured debt of Rs.1,262.71 million against the Transferee Company. Creditors are the liabilities of the Company. That on approval of the Scheme, the liability worth Rs.24,640.21 million will be shifted to the 'Transferee' Company, which is already having an existing liability of Rs.1,262.71 million towards its own creditors.

of both the Applicant Companies cannot be kept in dark. If without their consent Affidavits, the meeting of the unsecured creditors is dispensed with, they will be deprived of an opportunity of being heard or oppose the Scheme.

well-informed decision of the Unsecured Creditors of the Transferor Company, whether they want to merge or shift the right to recover their debt from the Transferor Company to the Transferee Company, who is already saddled with the debt of 177 creditors.

Further, whether the existing 177 creditors of Transferee Company are willing to welcome an addition of 473 Unsecured Creditors of the Transferor Company is a matter to be viewed and expressly decided by the Creditors of the Transferee. Therefore, -3- Company Appeal (AT) No. 148 of 2021 in our view approval of the unsecured creditors of both the Applicant Companies is needed and cannot be evaded. Hence, it would be wrong to say that no prejudice can ever be caused to any of the creditors if the Scheme is approved without obtaining their explicit consent.

Companies Act, 2013 has not made any exception in case of an amalgamation between a holding and a subsidiary company from filing the consent Affidavits of Creditors, nor has it given any explicit power to this Tribunal to dispense with the meeting of the creditors in absence of their consent affidavits in any circumstance. The contents of Section 230(9) of Companies Act, 2013 are reproduced below:

“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.” the matter of Nathi Devi v. Rahda Devi Gupta in Case No. Appeal (Civil) 5027 of 1999, dated 17.12.2014, wherein the Hon'ble Supreme Court observed that:

“It is equally well settled that in interpreting a statute, effort should be made to give effect to each and every word used by the Legislature.

The Courts always presume that the Legislature inserted every part thereof for a purpose and the legislative intention is that every part of the statute should have effect. A construction which attributes redundancy to the legislature will not be accepted except for compelling reasons such as obvious drafting error ... that the Affidavits filed under Section 230(2)(a) of Companies Act, 2013 are incomplete and defective.

Further, we are not inclined to dispense with th