Back
2025 Supreme(Online)(NCLT) 2700
NATIONAL COMPANY LAW TRIBUNAL
Manni Sankariah Shanmuga Sundaram, Atul Chaturvedi, JJ
M/s Tagus Realtech Private Limited – Appellant
Versus
Regional Director – Respondent
Company Petition No. (CAA) 24 (ND)/ 2021 | Company Application No. (CAA) 113 (ND)/2020
For the Appellants/Petitioners: Mr. Kartikeya Goel
For the Respondents: Adv. Sumit Kansal, Adv. Aryan Gupta
The proposed amalgamation scheme was rejected as it was found to facilitate financial irregularities rather than a bona fide business reorganization.
Headnote:(A) Companies Act, 2013 - Sections 230-232 - Amalgamation scheme - The Tribunal examined a second motion petition for amalgamation between two companies, finding the proposed scheme was not for bona fide business reorganization but rather to facilitate financial irregularities and misuse of the amalgamation process. The petition was rejected due to concerns over undisclosed entities and the intent behind the scheme. (Paras 1-15)
(B) Financial Irregularities - The Tribunal identified a pattern of non-genuine transactions indicating a deliberate circular movement of funds, raising serious concerns about financial integrity. (Paras 13-14)
(C) Compliance with Regulatory Requirements - The Tribunal noted that statutory authorities raised objections regarding the lack of transparency and disclosure in financial dealings of the companies involved. (Paras 10-12)
Facts of the case:
The petitioners, two companies, sought approval for an amalgamation scheme. The Transferor Company had not engaged in business activities and was involved in questionable financial transactions concerning land purchases. The Tribunal received objections from the Regional Director and the Official Liquidator highlighting potential misuse of the amalgamation process.
Findings of Court:
The Tribunal found the amalgamation scheme was not for legitimate business purposes and indicated serious financial irregularities and misuse of the Companies Act provisions.
Issues: Whether the proposed amalgamation served a bona fide business purpose or was intended to facilitate financial irregularities.
Ratio Decidendi: The Tribunal concluded that the amalgamation was not for genuine reorganization and was instead a mechanism to obscure financial misconduct, warranting rejection of the scheme.
Result: Petition rejected.
| Table of Content |
|---|
| 1. incorporation and capital structure of companies. (Para 1 , 2 , 3) |
| 2. rationale and benefits of the amalgamation scheme. (Para 4) |
| 3. procedural compliance and notifications. (Para 6 , 8 , 9) |
| 4. responses to observations by authorities. (Para 10 , 11) |
| 5. concerns over financial irregularities and rejection of the scheme. (Para 13 , 14) |
| 6. final order rejecting the amalgamation petition. (Para 15) |
ORDER
PER: MANNI SANKARIAH SHANMUGA SUNDARAM, MEMBER (JUDICIAL)
1. This is a second motion petition jointly filed by the petitioner companies herein namely M/s Tagus Realtech Private Limited (hereinafter referred to Transferor Company/Petitioner Company No. 1) with M/s Yule Propbuild Private Limited (hereinafter referred to as Transferee Company/Petitioner Company No. 2) under sections 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 (hereinafter referred to as the “SCHEME”) proposed between the petitioners.
2. The Transferor Company/Petitioner Company No. 1 i.e., M/s Tagus Realtech Private Limited was incorporated on 14.09.2012 under the provisions of Companies Act, 1956 bearing CIN: U70109DL2012PTC242332, having its registered office at 3rd Floor, 14, Rani Jhansi Road, New Delhi-110055. The Authorized Share Capital of the Transferor Company/ Petitioner Company No. 1 is Rs. 1,00,000/- divided into 10,000 Equity Shares of 10 each. The Issued, Subscribed and Paid-up Share Capital is Rs. 1,00,000/- divided into 10,000 Equity Shares of Rs.10 each.
3. The Transferee Company/Petitioner Company No. 2 i.e., M/s Yule Propbuild Private Limited was incorporated on 13.06.2007 under the provisions of Companies Act, 1956 bearing CIN: U45400DL2007PTC164731, having its registered office at 304, Kanchan House, Karampura Commercial Complex, New Delhi-110015. The present Authorized Share Capital of the Transferee Company/ Petitioner Company No. 2 is Rs. 23,00,00,000/- divided into 2,30,00,000 Equity Shares of Rs. 10 each. The present Issued, Subscribed and Paid-up Share Capital is Rs. 23,00,00,000/- divided into 2,30,00,000 Equity Shares of Rs. 10/- each.
4. RATIONALE AND BENEFITS OF THE SCHEME
a. The Transferor Company and the Transferee Company are holding and wholly owned subsidiary companies. The proposed amalgamation of the Transferor Company with the Transferee Company would result in business synergy, consolidation of these Companies and pooling of their resources into a single entity.
b. The proposed Amalgamation would result in optimising and leveraging existing resources of these Companies for the most beneficial utilization of these factors in the combined entity. It would be advantageous to combine the activities and operations of all these Companies in a single entity and building strong capability to effectively meet future challenges in competitive business environment.
c. The proposed Scheme of Amalgamation will result in usual economies of a centralized and a large company including elimination of duplicate work, reduction in overheads, better and more productive utilization of financial, human and other resource and enhancement of overall business efficiency. The proposed Scheme will enable these Companies to combine their managerial and operating strength, to build a wider capital and financial base and to promote and secure overall growth.
d. The amalgamation will result in significant reduction in multiplicity of legal and regulatory compliances which at present is required to be made separately by the Transferor Company and the Transferee Company.
e. The proposed amalgamation will provide greater efficiency in fund management and unfettered access to fund flow generated by the combined business which can be deployed more efficiently to fund organic and inorganic growth opportunities. The proposed amalgamation would enhance the shareholders’ value of the Transferor and t
 | ||
 | ||
