Mirza International : General updates

IN THE NATIONAL COMPANY LAW TRIBUNAL

ALLAHABAD BENCH, PRAYAGRAJ

CA (CAA) No.11/ALD/2022

(Under Section 230, 232 & 66 of the Companies Act, 2013)

In the matter of

The Companies Act, 2013

AND

In the matter of

Section 230 & 232 read with Section 66 and other applicable provisions of the Companies Act, 2013 and the Companies (Compromises, Arrangements and Amalgamations), Rules, 2016

AND

In the matter of

RTS Fashions Pvt Ltd, a private limited company incorporated under the Companies Act, 2013 and having its registered office at 14/6, Civil Lines, Kanpur 208 001, Uttar Pradesh

• Applicant Company No. 1/ Transferor Company

Mirza International Ltd, a public limited company incorporated under the Companies Act, 1956 and having its registered office at 14/6, Civil Lines, Kanpur 208 001, Uttar Pradesh

…..Applicant Company No. 2/Transferee Company

AND

Redtape Ltd, a public limited company incorporated under the Companies Act, 2013 and having its registered office at Plot No. 8, Sector-90, Noida 201 301, Uttar Pradesh

…..Applicant Company No. 3/Resulting Company

Date of hearing: 07.06.2022

Date of pronouncement: 14.06.2022

Coram:
Shri Rajasekhar V.K.	:	Member (Judicial)
Shri Virendra Kumar Gupta	:	Member (Technical)
Counsel on Record for the Applicants:
Mr Rajeev K Goel, Advocate
Mr Kartikeya Goel, Advocate
Mr Ankit K Singh, PCS

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IN THE NATIONAL COMPANY LAW TRIBUNAL

ALLAHABAD BENCH, PRAYAGRAJ

CA (CAA) No.11/ALD/2022

____________________________________________________________________________________________

ORDER

Rajasekhar V. K., Member (Judicial)

1. The instant application has been filed in the first stage of the proceedings under sections 230 and 232 of the Companies Act, 2013, read with section 66 of the Companies Act, 2013 ("the Act"), the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, the National Company Law Tribunal Rules, 2016 ("the Rules") for orders and directions with regard to convening of separate meetings of Equity Shareholders and Un-secured Creditors of the Transferee Company, and dispensing with the requirement of convening meetings of Equity Shareholders of the Transferor Company and the Resulting Company; Secured Creditors of the Transferee Company; and Un-secured Creditors of the Transferor Company and the Resulting Company
   in connection with the Composite Scheme of Arrangement of RTS Fashions Pvt Ltd ("Applicant Company No. 1" or "Transferor Company"), Mirza International Ltd ("Applicant Company No. 2" or "Transferee Company"), and Redtape Ltd ("Applicant Company No. 3" or "Resulting Company") ("Scheme" or "Scheme of Arrangement"). The Scheme, inter-alia, provides
   for (a) Amalgamation of RTS Fashions Pvt Ltd with Mirza International Ltd; and
   (b) Demerger of Branded Business/red tape Business of Mirza International Ltd into Redtape Ltd in the manner and on the terms and conditions stated in the said Scheme of Arrangement enclosed as Annexure: A-6 to the Company Application.
2. The learned Counsel for the Applicant Companies submitted that the Appointed Date of the Scheme has been fixed as 01 January 2022, or such other date as this Tribunal approves. The Applicants have also stated that the accounting treatment proposed in the Composite Scheme of Arrangement is in conformity with the accounting standards prescribed under section 133 of the Companies Act, 2013. Certificates from the respective Statutory Auditors of all the Applicant Companies have been filed along with the Application.
3. The learned Counsel for the Applicant Companies submitted that the Transferor Company is a closely held private limited company. The Transferee Company is a public limited listed company. Equity Shares of the

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IN THE NATIONAL COMPANY LAW TRIBUNAL

ALLAHABAD BENCH, PRAYAGRAJ

CA (CAA) No.11/ALD/2022

____________________________________________________________________________________________

Transferee Company are listed on BSE Ltd and National Stock Exchange of India Ltd (National Stock Exchange/NSE). The Resulting Company is a wholly owned subsidiary of the Transferee Company. The Transferor

Company, the Transferee Company and the Resulting Company are under

common management and control. The details of Shareholders, Secured

Creditors and Un-secured Creditors of all the companies is given below:

The Transferor Company:

1. The Transferor Company has 7 (seven) Equity Shareholders, and all have given their consents by way of deposing individual affidavits which are annexed to the Application.
2. The Transferor Company has no Secured Creditors.
3. The Transferor Company has 7 (seven) Un-securedCreditors, and all have given their consents by way of deposing individual affidavits which are annexed to the Application.

The Transferee Company:

1. The Transferee Company has around 69,639 (sixty-ninethousand six hundred and thirty-nine)Equity Shareholders. The Transferee Company is proposing to convene a meeting of its Equity Shareholders through Video Conferencing with facility of remote e-voting, under the supervision of this Tribunal to consider and approve the proposed Scheme of Arrangement.
2. The Transferee Company has six Secured Creditors. Out of total six Secured Creditors, one Secured Creditor has been paid in full since then. Whereas four Secured Creditors have given their consents by way of deposing individual affidavits which are annexed to the Application. Consent Affidavit from one Secured Creditor could not be obtained. Status of the Secured Creditors is given in the following table:

Sl.	Name of	Amount	% of	Remarks
No.	Secured	( ₹ )	Total
	Creditor		Value
1.	HDFC Bank Ltd	8,77,15,513	11.28%	Consent Affidavit
				received
2.	Punjab National	58,77,36,202	75.56%	Consent Affidavit
	Bank			received

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IN THE NATIONAL COMPANY LAW TRIBUNAL

ALLAHABAD BENCH, PRAYAGRAJ

CA (CAA) No.11/ALD/2022

____________________________________________________________________________________________

Sl.	Name of	Amount	% of	Remarks
No.	Secured	( ₹ )	Total
	Creditor		Value
3.	Citibank N.A.	9,00,00,000	11.57%	Consent Affidavit
					received
4.	Yes Bank Ltd	16,01,612	0.21%	Consent Affidavit
					received
	Sub-total'A'	76,70,53,327	98.62%
5.	BMW	India	17,72,285	0.23%	Consent Affidavit
	Financial				not received
	Services Pvt Ltd
	Sub-total'B'	17,72,285	0.23%
6.	Axis Bank Ltd	89,90,000	1.15%	Paid in full since
					then
	Sub-total'C'	89,90,000	1.15%
	Grand Total	77,78,15,612	100.00%
	[A+B+C]

As mentioned above, four Secured Creditors constituting 98.62% of the total value of the Secured Creditors of the Company have given their written consents/NOC by way of affidavit for the proposed Scheme of Arrangement.

The Transferee Company has around 2,021 (two thousand and twenty- one) Unsecured Creditors. The Company is proposing to convene a meeting of its Un-secured Creditors through Video Conferencing with facility of remote e-voting, under the supervision of this Tribunal to consider and approve the proposed Scheme of Arrangement.

The Resulting Company:

1. The Resulting Company is a wholly owned subsidiary of the Transferee Company. The Resulting Company has seven Equity Shareholders and all have given their consents by way of deposing individual affidavits which are annexed to the Application.
2. The Resulting Company has no Secured Creditors.
3. The Resulting Company has one Unsecured Creditor and the said Un- secured Creditor has given its consent by way of deposing individual affidavit which is annexed to the Application.

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