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2025 Supreme(Online)(NCLT) 4146
NATIONAL COMPANY LAW TRIBUNAL
SHRI JYOTI KUMAR TRIPATHI, SHRI RAVICHANDRAN RAMASAMY, JJ
S. Rajendran, Liquidator of Shree Ganesh EPC Private Limited – Appellant
Versus
V.S. Rajendran, Liquidator of Shree Ganesh EPC Private Limited – Respondent
CP/CAA/39/2024 | CA (CAA)/59/2022 | IBA/786/2019
For the Appellants/Petitioners: Ms. M S Elamathi, Ms. R V Yajura Devi, Mr.Gautham Ram Vittal
For the Respondents: Ms. M S Elamathi, Ms. R V Yajura Devi, Mr.Gautham Ram Vittal
The Tribunal upheld the approval of a compromise scheme under the Companies Act, emphasizing adherence to statutory procedures and the commercial wisdom of stakeholder consensus.
Headnote:(A) Companies Act, 2013 - Sections 230 to 232 - Insolvency and Bankruptcy Code, 2016 - Scheme of Compromise/Arrangement proposed by a shareholder seeking approval post-liquidation - Tribunal finds that procedure followed adhered to statutory requirements and commercial wisdom of stakeholders was respected - The proposed Scheme ensures financial recovery greater than liquidation, guarantees employee claims, and capital reconstructions benefiting all creditors - The objections raised by dissenting shareholders rejected based on failure to comply with claim submission timelines. (Paras 18.1-18.9)
(B) Liquidation Process - The Tribunal is required to consider schemes under both Companies Act and IBC; prioritizes commercial viability as per creditor’s consensus; objections by minority shareholders lack merit due to procedural non-compliance. (Paras 18.12-18.16)
Facts of the case:
The Corporate Insolvency Resolution Process of Shree Ganesh EPC Private Limited was initiated on 6th September 2019, leading to liquidation due to lack of viable plans. A Scheme by Mr. Azhagappan for capital reconstruction and creditor settlements was approved by 96.84% voting of stakeholders. (Paras 2.1, 5.1)
Findings of Court:
The Scheme proposed will lead to greater recovery for secured creditors than liquidation value, ensures job security for employees, and equitable treatment of creditors. The Scheme was approved and is binding. (Paras 18.16, 22)
Issues: Whether the scheme should be approved amidst objections from dissenting shareholders who failed to timely file claims.
Ratio Decidendi: The Tribunal emphasized that the commercial wisdom of creditors is paramount and procedural compliance is critical for participation in scheme processes, leading to the dismissal of objections based on non-compliance with statutory timelines.
Result: The Scheme of Compromise/Arrangement is hereby Approved.
ORDER
(Heard through Hybrid Mode)
1. The Present Company Petition, CP ( CA A)/ 39(CHE)/ 2024, which is sequel to the CA ( CA A)/ 58(CHE)/ 2022, filed by the Liquidator of Shree Ganesh EPC Private Limited under Section 230 to 232 of the Companies Act, 2013 read with applicable provisions of the Insolvency and Bankruptcy Code, 2016 for sanction of a Scheme of Compromise / Arrangement proposed between Mr. Azhagappan, a Shareholder holding 28.95% shareholding in Shree Ganesh EPC Private Limited (In Liquidation) and its creditors and members and reconstruction of its capital. The application seeks for following final reliefs, “
a. Approve the Scheme dated 30th April 2024 submitted by Mr. N. Azhagappan along with Rajalakshmi Wind Energy Limited together with their confirmations/comments/remarks vide email dated 04th June 2024 as duly approved by the Stakeholders with such reliefs as may be permissible under the provisions of applicable laws as the Tribunal may deem fit and proper;
b. Order the approved Scheme to be binding on all the shareholders / members, secured creditors, unsecured creditors, operational creditors (statutory authorities), operational creditors (employees and workmen), operational creditors (other than employees and workmen), of the Corporate Debtor viz., Shree Ganesh EPC Private Limited;
c. Pass such other order(s) as this Tribunal may deem fit and proper.”
2. The other Interim Application IA( CA )/ 161(CHE)/ 2024 has been filed by the suspended directors cum shareholders of the CD, other than Mr. Azhagappan whose scheme has accepted by the SCC/ Stakeholders, for making their objections with the following reliefs as follows,
“In view of the facts mentioned above, the Applicants prayers to this Hon’ble Tribunal that filed by the Respondent seeking the approval of this Hon’ble Tribunal for the Scheme proposed by Mr. N. Azhagappan be dismissed and this Hon’ble Tribunal pass such other order or orders as this Hon’ble Tribunal deem fit and proper in the circumstances of the case and render justice”
3. Facts in Brief
2.1 The Corporate Insolvency Resolution Process (hereinafter referred to as “CIRP”) of the Corporate Debtor viz. Shree Ganesh EPC Private Limited (CIN U40108TN1999PTC042736) was initiated by this Tribunal on 06.09.2019 in IBA/786/2019, a section 10 application thereby appointing Mr. J Manivannan as IRP. Thereafter, the applicant herein was appointed as Resolution Professional (RP) pursuant to confirmation from the CoC vide order dated 30.12.2019 in MA/1336/2019. As there was no viable Resolution Plan in relation to the Corporate Debtor ultimately led to process of liquidation. The liquidation order was passed against the corporate debtor vide order dated 17.01.2022 in IA(IBC)/1335(CHE)/2020 in IBA/786/2019 and the Applicant was appointed as the Liquidator of the Corporate debtor.
2.2 It is stated that, thereafter the Liquidator carried on the liquidation process of the Corporate Debtor, the sequence of events during the liquidation process is as under,
| Date | Event |
| 17.01.2022 | Liquidation order passed in IA(IBC)/1335(CHE)/2020 in IBA/786/2019 |
| 22.01.2022 | Publication of Form B |
| 01.02.2022 | Public Announcement as per Reg. 2B of IBBI (Liquidation Process), Regulations, 2016 inviting submission for the purpose of Issuance of Expression of Interest (EoI). |
| 21.02.2022 | Last Date fixed for submission of the Scheme |
| 05.03.2022 | Extended timeline for submission of Scheme under Section 230 of the Companies Act, 2013 |
| 01.03.2022 | Mr. N Azhagappan, one of the Shareholder and promoter along with Rajalakshmi Wind Energy Limited submitted the Scheme under Section 230 of the Companies Act, 2013 |
| 04.03.2022 | Mr. S. Ramanathan & Mr. M Karunanithi, the suspended directors submitted the second Scheme, under Section 230 of the Companies Act, 2013 |
| 26.03.2022 | List of Stakeholders of the Corporate Debtor in Liquidation was filed before the Adjudicating Authority. |
| 21.07.2022 | Company Application CA(AA)/ 59(CHE)/2022 seeking for convening the meeting of the C |
