Per- Kuldip Kumar Kareer, Member (Judicial)

1. The Court is convened by videoconference today.

2. The Learned Counsel for the Applicant Companies submits that the present scheme is a Scheme of Arrangement between CMS Computers Limited ("First Applicant Company" or "Demerged Company") and CMS Engineering Services Private Limited ("Second Applicant Company" or "Resulting Company") and their respective Shareholder and Creditors ("Scheme").

3. The Learned Counsel for the Applicant Companies states that the resolutions were passed by the Board of Directors of the Applicant Companies in their respective meetings held on 07th July 2022 for approving the Scheme. The Appointed Date fixed under the Scheme is 01st April 2022.

4. The Learned Counsel for the Applicant Companies further submits that the First Applicant Company is engaged in the business of providing IT support for government departments/utilities, E-governance services, facility management services, integrated traffic management and smart city services, energy management services, technology support for broadcasting and media business, security surveillance and other related services. It is also engaged in leasing of real estate and property management business. The Second Applicant Company was incorporated to carry out the business of providing all kind of IT services in connection with computers or similar electronic instruments including development and designing of electrical control panels and equipments and all other ancillary activities.

5. The Learned Counsel for the Applicant Companies further submits the rationale for the Scheme that:

Scheme has been drawn upon to achieve the following objectives:

• Segregation of business - risk and rewards involved in the respective businesses are inherently different and have different prospects of growth and earning potential. Segregation of business will lead to focused leadership and management attention.

• Focused growth strategy - with the focused leadership and management attention, the Scheme will allow the management to have a focused growth strategy for the respective business.

• Investment opportunity - with the implementation of the Scheme, management believes that respective company can attract different class of investors for different business resulting into more alternatives for investors.

• Value unlocking - with the better investment opportunities for the investors, Scheme could lead to value unlocking for the stakeholders.

• Administrative and operational efficiencies - Scheme would result into administrative and operational efficiencies as the respective business have different sets of requirements for infrastructure and employees and segregation of the same would lead to better and effective utilization of infrastructure and employees.

Hence, the Scheme would be in the best interest of all the stakeholders.

6. The Learned Counsel for the Applicant Companies state that the consideration proposed for the demerger of Demerged Undertaking of Demerged Company into the Resulting Company is as under:

Equity Shareholders with Voting Rights-

"1,633 Redeemable Preference Shares of INR 10 each fully paid up shall be issued in exchange of every 1,000 equity shares with voting rights of INR 1 each fully paid up held in Demerged Company"

Equity Shareholders with Non - Voting Rights-

"1,306 Redeemable Preference Shares of INR 10 each fully paid up shall be issued in exchange of every 1,000 non-voting equity shares of INR 1 each fully paid up held in Demerged Company"

7. That there are 7 (Seven) Equity Shareholders having its value of 58,780,189 in the First Applicant Company holding equity shares with voting rights and non-voting rights and all the Equity Shareholders of the First Applicant Company have given their consent affidavits in writing to the proposed Scheme. The consent affidavits from Equity Shareholders with voting and non-voting rights are annexed as 'Annexure J1 to J7 colly' to the Company Scheme Application.

8. That there are 2 (Two) Equity Shareholders of value of 20,040 in the Second Applicant Company and both the Equity Shareholders of the Second Applicant Company have given their consent affidavits in writing to the proposed Scheme. The consent affidavits from Equity Shareholders are annexed as 'Annexure K1 to K2 colly' to the Company Scheme Application.

9. In view of the above fact that the Applicant Companies have obtained consent affidavits from all their Equity Shareholders, the meetings of the Equity Shareholders of the Applicant Companies are hereby dispensed with.

10. The Learned Counsel further submits that the Second Applicant Company do not have any secured and unsecured creditors. Therefore, the questions of convening meeting and sending notices to the secured and unsecured creditors do not arise.

11. The Learned Counsel for the Applicant Companies further submits that in case of the First Applicant Company, there are 6 (Six) Secured Creditors of the aggregate value of INR 33,22,84,649 as on 31st January 2023. In respect of the Secured Creditors, the First Applicant Company has procured consent letters from all the secured creditors and have filed the same via an additional affidavit on 21st February 2023.

12. The Learned Counsel further submits that in case of unsecured creditors of the First Applicant Company, the present Scheme is an arrangement between the Applicant Companies and their shareholders as contemplated in Section 230(1)(b) and not in accordance with the provisions of Section 230(1)(a) of the Companies Act, 2013. The Scheme does not affect the rights and interests of the unsecured creditors of the Demerged Company. Further, as the assets of the Demerged Undertaking to be transferred is more than the liabilities being transferred, there will not be any effect of the proposed Scheme on their liabilities and the liabilities will be paid off in the ordinary course of business. Therefore, no meeting of unsecured creditors of the First Applicant Company is required to be convened.

13. The First Applicant Company is directed to issue notices to all the unsecured creditors by Registered Post or Speed Post or Courier or Hand Delivery or through Email (to those creditors whose email addresses are duly registered with the First Applicant Company for the purpose of receiving such notices by email), at their last known address as per the records of the First Applicant Company, with a direction that they may submit their representations, if any, to the Tribunal within 30 days and copy of such representations shall simultaneously be served upon the First Applicant Company.

14. The Applicant Companies are directed to serve notices along with copy of the Scheme upon:-(i) the Central Government through the office of Regional Director, Western Region, Mumbai (ii) Registrar of Companies, Mumbai and (iii) concerned Income Tax Authority within whose jurisdiction the Applicant Companies' assessments are made i.e. for First Applicant Company, Central Circle 1(1), Mumbai, having PAN No. AACCD0356K; for the Second Applicant Company, Ward 3(1)(3), Mumbai, having PAN No. AAACC2503K.

15. The Applicant Companies to file affidavit of service in the registry proving dispatch of notices to the Regulatory authorities and do report to this Tribunal that the directions regarding the issue of notices have been duly complied with.

16. Ordered accordingly.