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2025 Supreme(Online)(NCLT) 593
NATIONAL COMPANY LAW TRIBUNAL
Shri Prabhat Kumar, Justice V.G. Bisht (Retd.), JJ
BELVEDORE INTERNATIONAL LIMITED VS
C.A.(CAA) - 34/2025
For the Petitioner:Abhishek Nahta
The Tribunal approved a Composite Scheme of Arrangement under the Companies Act, emphasizing stakeholder consent and compliance with statutory provisions for amalgamation.
Headnote:(A) Companies Act, 2013 - Sections 230 and 232 - Composite Scheme of Arrangement - Approval sought for amalgamation of multiple companies into a single entity - The rationale includes procurement synergies, enhanced efficiency, and cost savings - All shareholders of the Transferor Companies have consented, thus meetings dispensed with - The scheme aims to strengthen market position and operational efficiency. (Paras 1-3, 13-34)
(B) Corporate Governance - The Tribunal emphasizes the necessity of compliance with statutory requirements and proper notice to stakeholders - The process of amalgamation must ensure transparency and fairness to all creditors and shareholders. (Paras 20-37)
Facts of the case:
The Tribunal considered the Composite Scheme of Arrangement involving multiple companies in the mattress and foam manufacturing sector, aimed at consolidating operations and enhancing market leadership. The Board of Directors approved the scheme, and consent was obtained from the majority of shareholders and creditors.
Findings of Court:
The Tribunal found that the proposed scheme is beneficial for the companies involved and complies with the statutory requirements under the Companies Act, 2013.
Issues: The main issues addressed include the validity of the scheme, consent from stakeholders, and compliance with statutory provisions.
Ratio Decidendi: The Tribunal ruled that the amalgamation serves the interests of the companies and their stakeholders, emphasizing the importance of obtaining consent and adhering to legal requirements.
Result: The Composite Scheme of Arrangement is approved.
ORDER
1. The sanction of the Tribunal is sought under Sections 232 r/w Section 230 of the Companies Act, 2013 and other relevant provisions of the Companies Act, 2013 and the rules framed there under for the Composite Scheme of Arrangement of Belvedore International Limited (Transferor/Applicant Company No.1), Kanvas Concepts Private Limited, (Transferor/Applicant Company No.2), Kurlon Retail Limited (Transferor /Applicant Company No.3), Komfort Universe Products And Services Limited (Transferor /Applicant Company No.4), Starship Value Chain and Manufacturing Private Limited (Transferor/Applicant Company No.5), With Kurlon Enterprise Limited (Transferee/Amalgamating /Applicant Company No.6) With and into Sheela Foam Limited (Amalgamated/Applicant Company No.7).
2. The Board of Directors of the Transferor/Applicant Companies in its respective meetings held on 28.03.2024 have approved the Composite Scheme of Arrangement. The Appointed Date fixed under the Scheme is October 20, 2023, or any such date approved by this Tribunal or any other Appropriate Authority or any other competent authority.
3. The rationale for the proposed Scheme :-
The Amalgamating Company, along with Transferor Companies, has been the second largest mattress manufacturer, with leadership position in southern and eastern parts of the country, apart from sizeable presence in other parts. Also, the Amalgamating Company is approximately 70-year-old company with a very strong brand.
The Board of Directors of the Amalgamated Company in its meeting held on July 17, 2023, had approved the acquisition of the Amalgamating Company, along with Transferor Companies, with a view to further strengthen the leadership position in the mattress and foam segments across the country.
The intent of acquisition of the Amalgamating Company, alongwith Transferor Companies was always to run all the companies, as one-operation going forward i.e. subsequently amalgamate the companies into a single entity.
Further, the amalgamation of the transferor companies with the transferee company would inter alia also have the following benefits:
i. Procurement synergies arising on account of higher volume discounts, and ability to negotiate best possible prices;
ii. Deeper manufacturing footprint, as materials of both the business can be made in any plant location, resulting in enhanced efficiency as well as reduction in servicing time;
iii. Rationalization of logistic costs considering the combined volume;
iv. Open-up the door for a new sales channel strategy, enhancing penetration/coverage and leading to better sales;
v. Structured, sharper and better management focusing on holistic growth of the businesses;
vi. Optimum and efficient utilization of resources and sharing of ancillary facilities;
vii. Common governance structure and effective management of compliances;
viii. Enhancing shareholder value and leveraging on synergies in doing the business; and
ix. Cost saving by way of reduction of overheads, administrative, managerial and other expenditure and to bring about operational rationalization and efficiency.
x. Given the above, and similarity in nature of businesses of the Transferor Companies, the Amalgamating Company and the Amalgamated Company, it is proposed to merge the Transferor Companies with Amalgamating Company (pursuant to Part C of the Scheme) and (post Part C comes into effect) merge the Amalgamating company with Amalgamated Company (pursuant to Part D of the Scheme). The merger shall result in greater business synergies and reduced administrative and other costs.
4. The Applicant Company No.1 is engaged in the business of (buying, selling, reselling, importing, exporting, transporting, storing, promoting, marketing, manufacturing or supplying, trading, dealing in any manner whatsoever in all type of goods including mattresses, pillows, furniture and other related products and services of international brands on retail and B2B basis in India. The Applicant Company No.2 is engaged in the busi
