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2025 Supreme(Online)(NCLT) 2629
NATIONAL COMPANY LAW TRIBUNAL
Sanjiv Jain, Venkataraman Subramaniam, JJ
SUNDARAM INDUSTRIES PRIVATE LIMITED VS
CA(CAA)/35(CHE)/2025
For the Appellants/Petitioners: Mr.T.K. Bhaskar, K. Harishankar, Niranjan S. Rao, Shakthivelan Manisekaran
For the Respondents:
The court upheld a joint application for amalgamation, allowing dispensation of meetings based on sufficient stakeholder consent, emphasizing operational efficiency and protection of interests.
Headnote:(A) Companies Act, 2013 - Sections 230-232 - Joint application for scheme of amalgamation and arrangement - The application is allowed, and meetings of shareholders and creditors are dispensed with due to sufficient consent - The rationale includes operational efficiency, better funding, and no prejudice to stakeholders. (Paras 1, 3, 12)
(B) Amalgamation - The court emphasizes the importance of consolidating business operations for enhanced management control and efficiency, ensuring that the interests of shareholders and creditors are protected. (Paras 3, 12)
Facts of the case:
The joint application was filed by Sundaram Industries Pvt Ltd and two other companies for a scheme of amalgamation, seeking dispensation of meetings for shareholders and creditors based on obtained consent.
Findings of Court:
The court found that the scheme promotes operational efficiency and does not prejudice any stakeholders, allowing the application.
Issues: The primary issue was whether the consent obtained from shareholders and creditors was sufficient to dispense with the meetings.
Ratio Decidendi: The court ruled that the dispensation of meetings was justified given the overwhelming consent from stakeholders, ensuring no detriment to their interests.
Result: The application is allowed.
| Table of Content |
|---|
| 1. joint company application for amalgamation. (Para 1 , 4 , 5 , 6) |
| 2. rationale for the proposed scheme. (Para 2 , 3) |
| 3. compliance with statutory requirements. (Para 7 , 9 , 10 , 11) |
| 4. court's directions on application. (Para 12) |
| 5. application allowed; next steps outlined. (Para 13) |
ORDER
1. This is a Joint Company Application Viz., CA(CAA)/35(CHE)/2025 filed by the Applicant Companies, namely Sundaram Industries Private Limited (for brevity “Demerged Company/Applicant Company-1”) and Sri Athreya Automotives Private limited (for brevity “Resulting/Transferee Company/ Applicant Company-2”) and Shore Auto Rubber Exports Private Limited (for brevity “Transferor Company/Applicant Company-3”) ) and its Shareholders under section 230-232 of Companies Act, 2013, and other applicable provisions of the Companies Act, 2013 read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 in relation to the Scheme of Amalgamation and Arrangement (hereinafter referred to as the “SCHEME”) proposed by the Applicant Companies herein with its Shareholders. The Scheme is placed at Page No. 1227-1295 of the Application Typeset.
2. The Applicant Companies in this Company Application have sought for the following reliefs;
| EQUITY SHAREHOLDERS | PREFERENCE SHAREHOLDERS | SECURED CREDITORS | UNSECURED CREDITORS | |
| DEMERGED COMPANY | To Dispense with the meeting | To Dispense with the meeting | To Dispense with the meeting | To Dispense with the meeting |
| RESULTING/ TRANSFEREE COMPANY | To Dispense with the meeting | To Dispense with the meeting | To Dispense with the meeting | To Dispense with the meeting |
| TRANSFEROR COMPANY | To Dispense with the meeting | To Dispense with the meeting | To Dispense with the meeting | To Dispense with the meeting |
3. The RATIONALE OF THE SCHEME is as under:
Rationale for the Step -I: Demerger
A. The Demerger, transfer and vesting of the Demerged Undertaking will result in increased customer attention for the rubber business by the Resulting Company and will enable the Resulting Company to focus on the Demerged Undertaking as its core activities thereby resulting in better strategic, operational and administrative efficiency.
B. The Demerger, transfer and vesting of the Demerged Undertaking will enable the Resulting Company to raise funds required for the operations of the Demerged Undertaking. This will ensure better funding of operations of the Demerged Undertaking which in turn will facilitate growth and expansion of operations. This will also ensure timely re-payment to secured creditors, if any, and unsecured creditors.
C. The Demerger, transfer and vesting of the Demerged Undertaking to the Resulting Company will help in the creation of a platform for future business activities, and to act as a gateway for growth and expanding business operations. There is no likelihood that the interests of any shareholder or creditor of either the Demerged Company or the Resulting Company would be prejudiced as a result of the Scheme. The Demerger, transfer and vesting of the Demerged Undertaking will not impose any additional burden on the members of the Demerged Company or the Resulting Company. The Scheme is not in any manner prejudicial or against public interest and would serve the interest of all shareholders, creditors and stakeholders.
Rationale for the Step -II: Amalgamation
A. The amalgamation of the Transferor Company with the Transferee Company will help in consolidation of rubber business and creation of a platform for future business activities, and to act as a gateway for growth and expanding business operations wherein the resources of the Transferor Company can be advantageously combined with the resources of the Transferee Company.
B. The consolidation of the business operations, undertakings, assets, liabilities etc. of the Transferor Company in a single entity, i.e. under the Transferee Company, and under a single centralized system of management, will result in the management being able to exercise greater control over the operations of the Co
