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2025 Supreme(Online)(NCLT) 2701
NATIONAL COMPANY LAW TRIBUNAL
MANNI SANKARIAH SHANMUGA SUNDARAM, MEMBER (JUDICIAL), ATUL CHATURVEDI, MEMBER (TECHNICAL)
FUSION COSMECEUTICS PRIVATE LIMITED – Appellant
Versus
JUST4KIDS SERVICES PRIVATE LIMITED – Respondent
COMPANY PETITION NO. (CAA) 76 (ND)/2024|COMPANY APPLICATION NO. (CAA) 51 (ND)/2024
For the Applicant:Mr. Sanjeev Jain, Advocate
For the Revenue: Mr. Siddharth Sinha, SSC, Mr. Anuja Pethia, JSC, Ms. Dachitta Shahi, Mr. Srikant Singh, Advs.
For the RD: Mr. Sumit Kansal, Mr. Aryan Gupta, Advs.
The Tribunal sanctioned the amalgamation of wholly owned subsidiaries, emphasizing compliance with statutory provisions and stakeholder rights despite some companies reporting losses.
Headnote:(A) Companies Act, 2013 - Sections 230-232 - Scheme of amalgamation between wholly owned subsidiaries and their parent company for effective management and consolidation of business - The scheme aims to eliminate management overlaps, ensure operational efficiencies, and protect stakeholder interests, allowing the merger of loss-making entities. (Paras 5, 25, 26)
(B) Procedural Compliance - The Tribunal evaluates the merits based on shareholder and creditor approval and does not interfere with corporate decisions. (Paras 23, 24)
Facts of the case:
This second motion petition concerns a scheme of amalgamation between two companies, with rationale including cost efficiencies and enhanced shareholder value.
Issues: The court addressed the legality of amalgamation of loss-making companies and compliance with statutory provisions.
Findings of Court:
Approval of the scheme after necessary disclosures and stakeholder consent.
Ratio Decidendi: The Tribunal shall sanction the scheme under regulatory requirements, irrespective of individual company profits as long as creditor interests are safeguarded.
Result: Sanction granted to the scheme under the Companies Act with specified provisions for compliance.
| Table of Content |
|---|
| 1. summary of petition for amalgamation. (Para 1 , 2 , 3) |
| 2. rationale for efficiency and stakeholder maximization. (Para 5 , 11) |
| 3. compliance with regulations and stakeholder protections. (Para 12 , 18 , 20 , 21) |
| 4. court's jurisdiction in approving corporate decisions. (Para 23 , 25) |
| 5. outcome of approval of the amalgamation scheme. (Para 29) |
ORDER
PER: MANNI SANKARIAH SHANMUGA SUNDARAM, MEMBER (JUDICIAL)
1. This is a second motion petition filed by the petitioner companies herein namely M/s Fusion Cosmeceutics Private Limited (hereinafter referred to Transferor Company /Petitioner Company No. 1) with M/s Honasa Consumer 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 Fusion Cosmeceutics Private Limited is a private limited company which was incorporated on 30.06.2003, under the provisions of the Companies Act, 1956 bearing CIN: U24230DL2003PTC423473, having its registered office at Unit 404 4th Floor City Centre Plot No 05, Sector 12 Dwarka New Delhi- 110075, Dwarka Sec-6, South West Delhi, Delhi, Delhi, India, 110075. The Transferor Company No.1 is engaged in the business of formulating and trading of skin care products. The Authorized Share Capital of the Transferor Company No. l/Applicant Company No.1 is Rs. 2,05,10,000 /- comprising of 11,65,000 Equity Shares of Rs. 10/- each and 8,86,000 Compulsorily Convertible Preference Shares of Rs. 10/ - each. The Issued, Subscribed and Paid-up Capital is Rs. 1,88,51,480/- divided into 10,00,045 Equity Shares of Rs. 10/- each and 8,85,103 Compulsorily Convertible Preference Shares of Rs. 10/- each. The Transferor Company is a wholly owned subsidiary of the Transferee Company as on the date of approval of this Scheme. The Transferor Company is presently engaged in the formulation and trading of skin care products.
3. The Transferee Company/Petitioner Company No. 2 i.e., M/s Honasa Consumer Limited was incorporated on 16.09.2016 under the provisions of Companies Act, 2013 bearing CIN: L74999DL2016PLC306016, having its registered office at Unit No. - 404, 4th Floor, City Centre, Plot No.-05, Sector- 12, Dwarka, New Delhi-110075. The present Authorized Share Capital of the Transferee Company/Petitioner Company No. 2 is Rs. 3,40,00,00,000/- divided into 34,00,00,000 Equity shares of Rs. 10/- each; Rs. 58,000 divided into 580 Equity Shares of INR 100/- each; Rs. 26,100 divided into 290 equity shares of Rs. 90/- each; Rs. 58,390 divided into 5,839 0.001% Class A Compulsorily Convertible Non-Cumulative Preference shares of INR 10/- each; Rs. 18,850 divided into 1,885 0.001% Class B Compulsorily Convertible Non-Cumulative Preference shares of INR 10/- each; Rs. 48,450 divided into 4,845 0.001% Class C Compulsorily Convertible Non-Cumulative Preference shares of INR 10/- each; Rs. 41,610 divided into 4,161 0.001% Class D Compulsorily Convertible Non-Cumulative Preference shares of INR 10/- each; Rs. 50,000 divided into 5,000 0.001% Class E Compulsorily Convertible Non-Cumulative Preference shares of INR 10/- each; Rs. 50,000 divided into 5,000 0.001% Class F Compulsorily Convertible Non-Cumulative Preference shares of INR 10/- each. The Issued, Subscribed and Paid-up Share Capital is Rs. 3,21,74,67,570/- divided into 32,17,46,757 Equity Shares of Rs. 10/- each. The Transferee Company is presently engaged in the business of trading of a variety of beauty and personal care products such as baby care, skin care and other related products which are manufactured through third-party contract manufacturers under the brand name of ’Mamaearth’, ’The Derma Co.’, ’BBlunt’, ’Aqualogica’, and ’Ayu
