Back
2025 Supreme(Online)(NCLT) 1546
NATIONAL COMPANY LAW TRIBUNAL
Shri Prabhat Kumar, J, Justice V.G. Bisht (Retd.), Hon’ble Member (Technical), Hon’ble Member (Judicial),
GENESIS COLORS LIMITED VS
Companies Act, 2013 | CA(CAA)/95/MB-I/2025
For the Appellants/Petitioners:Mr. Gaurav Joshi, Ld. Sr. Advocate, Mr. Mehul Shah, Mr. Haabil Vahanvaty, Mr. Rushabh Gala, Mr. Porus Titina, Mr. Anmol Sharma, Mr. Hiren Kukreja
For the Respondents:
The court upheld a composite scheme of arrangement under the Companies Act, 2013, allowing for share capital reduction and amalgamation based on majority consent from shareholders and creditors.
Headnote:(A) Companies Act, 2013 - Sections 230 and 232 - Scheme of Arrangement - The court approved a composite scheme of arrangement involving multiple transferor companies and a transferee company, allowing for reduction of share capital and amalgamation of companies. The rationale included providing exit opportunities for minority shareholders and simplifying corporate structure. (Paras 1-5)
(B) Approval of Scheme - Consent from shareholders and creditors - The court noted that the majority of unsecured creditors and shareholders provided consent, thus dispensing with the need for meetings. (Paras 28-44)
(C) Notice to Authorities - The court mandated service of notice to regulatory authorities under Section 230(5) of the Companies Act, ensuring compliance with statutory requirements. (Paras 49-50)
Facts of the case:
The applicant companies, engaged in luxury fashion and related businesses, sought approval for a scheme that involved the amalgamation of several companies and the reduction of share capital to facilitate an exit for minority shareholders.
Findings of Court:
The court found that the scheme was in the interest of the parties involved and stakeholders, and approved it based on the consent received from the majority of shareholders and creditors.
Issues: The main issues included the necessity of convening meetings for approval of the scheme given the overwhelming consent from stakeholders.
Ratio Decidendi: The court ruled that the scheme was beneficial for the parties involved and complied with the legal requirements of the Companies Act, thereby justifying the approval without further meetings.
Result: Scheme of Arrangement approved.
| Table of Content |
|---|
| 1. composite scheme of arrangement under companies act (Para 1 , 2 , 3) |
| 2. business operations and rationale for amalgamation (Para 4 , 5 , 6) |
| 3. share capital details of transferor companies (Para 7 , 8 , 17) |
| 4. meeting convening and chairperson appointment (Para 18 , 19 , 20) |
| 5. voting and quorum requirements for meetings (Para 21 , 22 , 23) |
| 6. notice requirements for shareholder meetings (Para 24 , 25 , 26) |
| 7. consent of shareholders and dispensation of meetings (Para 27 , 28 , 29) |
| 8. unsecured creditors and their consent (Para 30 , 31 , 32) |
| 9. unsecured creditors' consent and meeting dispensation (Para 33 , 34 , 35) |
| 10. unsecured creditors of transferee company (Para 36 , 37 , 38) |
| 11. majority consent of unsecured creditors (Para 39 , 40 , 41) |
| 12. directives for remaining unsecured creditors (Para 42 , 43 , 44) |
| 13. verification of unsecured creditors (Para 45 , 46 , 47) |
| 14. notice to regulatory authorities (Para 48 , 49 , 50) |
| 15. final order and compliance requirements (Para 51 , 52 , 53) |
ORDER
1. The present scheme is the Composite Scheme of Arrangement sought u/s 232 r/w Section 230 r/w Section 66 of the Companies Act, 2013 and other Applicable provisions of the Companies Act, 2013 amongst Genesis Colors Limited (Transferor Company 1) Reliance Brands Luxury Fashion Private Limited (Transferor Company 2) & Reliance Lifestyle Products Private Limited (Transferor Company 3) Genesis La Mode Private Limited ((Transferor Company 4) GML India Fashion Private Limited (Transferor Company 5) GLF Lifestyle Brands Private Limited (Transferor Company 6) GLB Body Care Private Limited (Transferor Company 7) CAA Brands Reliance Private Limited (Transferor Company 8) Reliance Sideways Private Limited (Transferor Company 9) Reliance Brands Limited (Transferee Company) and their shareholders and creditors.
2. The Scheme proposes: (i) reduction of the share capital of the GCL (Transferor Company 1), whereby the Identified Shares (as defined in the Scheme) of GCL held by the Identified Shareholders (as defined in the Scheme), shall be reduced and cancelled; (ii) amalgamation of the Transferor Company 1 with the Transferee Company; (iii) amalgamation of the Transferor Company 2 with the Transferee Company; (iv) amalgamation of the Transferor Company 3, the Transferor Company 4, the Transferor Company 5 and the Transferor Company 6 with the Transferee Company; and (v) amalgamation of the Transferor Company 7, the Transferor Company 8 and the Transferor Company 9 with the Transferee Company. The Scheme also provides for various other matters consequent and incidental thereto.
3. The Board of Directors of the Applicant Companies, in their respective meetings held on March 29, 2025, passed a resolution approving the Scheme. The Appointed Date fixed under the Scheme is April 01, 2024.
4. The Transferor Company 1 is engaged in the trading of designer sarees, women apparels, designer ties, fabric and other accessories. The Transferor Company 2 is engaged in the business of retail trading of apparels, handbags, footwear, watches, and personal accessories of various international luxury brands. The Transferor Company 3 is engaged in importing and sale of tableware products under the brand Villeroy and Boch in India. The Transferor Company 4 is engaged in the business of marketing, selling and distribution of apparels, footwear and other personal accessories of international luxury brands namely Armani Exchange, Emporio Armani, Giorgio Armani and EA7 in India. The Transferor Company 5 is engaged in the business of marketing, selling and distribution of clothing, apparels and personal accessories of international luxury brand “Hugo Boss”. The Transferor Company 6 is engaged in the business of marketing, selling and distribution of apparels, footwear, handbags and other personal accessories of international brands named “Coach” and “Salvatore Ferragamo” in India. The products sold under luxury brands include garments, footwear and accessories. The Transfero
