I Had come across one question that whether any pending investigation can stand as a legal impediment in sanctioning a proposed scheme of compromise or arrangements under Section 230 and / or Section 232 of the Companies Act, 2013?
On exploring the answer to the said question, I came across an order dated 27th May, 2019 passed by National Company Law Appellate Tribunal (NCLAT) in the matter of “MEL Windmills Pvt. Ltd” Vs. “Mineral Enterprises Limited” and “MEL Properties Private Limited”, which is summarized hereinbelow:
Brief Facts of the said Case:
- It was a scheme of demerger where business 2 & business 3 of a Company were to be transferred to 2 different Companies and business 1 was under an investigation.
- Application was made to the Bangalore Bench praying for dispensation of the meetings of the creditors and shareholders in terms of Section 230 and 232 of the Companies Act, 2013
- NCLT considered the pending investigation of business 1 and rejected the Scheme at the very initial stage even when the question before it for consideration was with respect to the dispensation of the meetings creditors and shareholders.
- Appeal was made against the order.
- NCLAT had set aside the order stating that:
“The Tribunal seriously erred in dismissing the application on merit when the stage of consideration of the proposed scheme of demerger was yet to arrive. The impugned order suffers from serious legal infirmity and the same is set aside.” Summarized Chart of the said scheme of Demerger is enclosed herewith for having a quick glance