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2025 Supreme(Online)(NCLT) 211
NATIONAL COMPANY LAW TRIBUNAL
Mahendra Khandelwal, Sanjeev Ranjan, JJ
QFS Consultancy Private Limited – Appellant
Versus
Latent Light Estates Private Limited – Respondent
COMPANY PETITION (CAA) NO. –25/(ND)/2024 | COMPANY APPLICATION NO. CA (CAA)- 14/(ND)/2024
For the Applicant: Mr. Videh Vaish, Mr. Lalit Mohan, Mr. Abhay Gupta
For the Respondents: Ms. Jyoti Khurana
For the OL: Mr. Kartikeya Asthana
For the IT Dept.: Mr. Siddhartha Sinha, Ms. Dacchita Shahi, Ms. Anuja Pethia, Mr. Utkarsh Kandpal
The court approved the amalgamation scheme under the Companies Act, affirming that loss-making companies can amalgamate and underscoring the importance of respecting shareholders' commercial wisdom.
Headnote:(A) Companies Act, 2013 - Sections 230-232 - Joint petition for amalgamation of QFS Consultancy Private Limited and Latent Light Commercial Limited with Latent Light Estates Private Limited approved - The scheme aims for operational efficiency and reduction of compliance burdens, and positions the merged entity for transparency and accountability to stakeholders. The appointed date is fixed at 01.04.2024. (Paras 1, 22)
(B) Amalgamation - No restriction exists on amalgamation of loss-making companies as upheld in prior cases. The court follows the principles established in Miheer H. Mafatial vs Mafatial Industries Ltd, emphasizing that the commercial wisdom of shareholders must be respected and upheld under statutory provisions. (Paras 18, 19)
Facts of the case:
The petitioners filed a joint application for the amalgamation, citing the benefits of consolidated management and resources while complying with statutory obligations with no objections raised by stakeholders or authorities involved. The regional director and income tax department had no specific objections to the scheme. (Paras 5, 12, 14)
Findings of Court:
The Tribunal found no impediments to granting approval for the amalgamation scheme, supporting the proposal by recognizing compliance with the law and reporting standards as articulated by auditors. (Paras 12, 20)
Issues: The permissible scope of amalgamation under the statute and assessment of commercial wisdom in the context of shareholder decisions was reviewed. (Paras 18, 19)
Ratio Decidendi: The court reiterated that it would not second-guess the commercial wisdom exercised by the corporations and the acceptance by shareholders, considering their informed decisions surrounding the amalgamation proposal. (Paras 19, 21)
Result: The scheme of amalgamation is sanctioned under the provisions of Sections 230 to 232 of the Companies Act, 2013 with necessary directions provided.
| Table of Content |
|---|
| 1. amalgamation scheme details and company compliance. (Para 1 , 5 , 12 , 14) |
| 2. court's respect for shareholders’ commercial decisions in merger. (Para 18 , 19) |
| 3. final order sanctioning the amalgamation. (Para 21 , 22 , 23) |
ORDER
PER: MAHENDRA KHANDELWAL, MEMBER (JUDICIAL)
1. The present Joint Petition is filed by the Petitioner Companies herein M/s QFS Consultancy Private Limited (Transferor Company No. 1/ Petitioner Company No. 1), M/s Latent Light Commercial Limited (Transferor Company No. 2/ Petitioner Company No. 2) and M/s Latent Light Estates Private Limited (Transferee Company/ Petitioner Company No. 3) under Section 230 -232 of the Companies Act, 2013 read with Rule 15 of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016, and the National Company Law Tribunal Rules, 2016, for the purpose of the Sanction of the proposed Scheme of Amalgamation between the Transferor Companies and the Transferee Company. The copy of the Scheme of Amalgamation (hereinafter referred to as the “Scheme”), has been placed on record.
2. The Transferor Company No. 1 i.e., M/s QFS Consultancy Private Limited is a private limited company incorporated on 31.10.1973 under the provisions of the Companies Act, 1956 vide CIN: U74899DL1973PTC006929, having its registered office at C-3/7 Safdurjung Development Area, New Delhi- 110016. Thus, the registered office of the Transferor Company No. 1 is under the jurisdiction of this Tribunal. The authorized share capital of the Transferor Company No. 1 is Rs. 70,00,000/-. The issued, subscribed and paid-up share capital of the Transferor Company No. 1 is Rs. 68,20,000/-.
3. The Transferor Company No. 2 i.e., M/s Latent Light Commercial Limited is a public limited company incorporated on 30.11.1984 under the provisions of the Companies Act, 1956 vide CIN: U74130DL1984PLC019469, having its registered office at C-3/7 Safdurjung Development Area, New Delhi- 110016. Thus, the registered office of the Transferor Company 2 is under the jurisdiction of this Tribunal. The authorized share capital of the Transferor Company No. 2 is Rs. 1,25,00,000/-. The issued, subscribed and paid-up share capital of the Transferor Company No. 2 is Rs. 1,21,25,000/-.
4. The Transferee Company i.e., M/ s Latent Light Estates Private Limited is a private limited company incorporated on 03.08.2006 under the provisions of the Companies Act, 1956 vide CIN: U68100DL2006PTC151588, having its registered office at C-3/7 Safdurjung Development Area, New Delhi- 110016. Thus, the registered office of the Transferee Company is under the jurisdiction of this Tribunal. The authorised share capital of the Transferee Company is Rs. 11,75,00,000/-. The present issued, subscribed and paid-up capital of the Transferee Company is Rs. 11,65,78,620/-.
5. The Petitioner Companies submit that the proposed scheme of amalgamation of the Transferor Companies and Transferee Company would have the following benefits: -
(i) With a view to facilitate focused management and efficient utilization of assets and resources of the Transferor Companies, it is considered desirable to amalgamate the Transferor Companies with the Transferee Company.
(ii) That the Transferor/ Amalgamating Company/ Applicant Company and the Transferee/ Amalgamated Company are part of the same group and having common directors.
(iii) The scheme will integrate the Companies into one and as a result, create a single operating entity.
(iv) Consolidation of entities will enable most optimum reflection of the combined assets of the group. This will also result in greater transparency and greater accountability to the shareholders.
(v) Consolidation of entities will result in significant reduction in the multiplicity of legal and regulatory compliances required at present to be carried out by the companies and also avoid duplication of administrative functions and eliminate multiple record-keeping.
6. The appointed date as fixed for the proposed scheme of Amalgamation is 01.
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