Authority: National Company Law Tribunal, Mumbai Bench

Order Date: 12 June 2026

Case Overview

The National Company Law Tribunal (NCLT) Mumbai Bench heard an application (CA (CAA) 59/MB-III/2026) filed by Larsen & Toubro Limited (Transferor Company) and its wholly-owned subsidiary L&T Realty Properties Limited (Transferee Company) under Sections 230-232 of the Companies Act, 2013 and Section 2(42C) of the Income Tax Act, 1961. The application sought approval and directions for a Scheme of Arrangement involving the demerger and transfer of L&T's realty business undertaking to L&T Realty Properties on a slump sale basis.

The Scheme envisages the transfer and vesting of the Realty Undertaking, defined as all assets, properties, liabilities, contracts, permits, intellectual property (excluding the 'Larsen & Toubro'/'L&T' name and logo), and employees exclusively pertaining to L&T's realty business. The rationale cited includes creating a focused management structure for the realty business, enabling better access to sector-specific financing, while maintaining group synergies.

The appointed date for the Scheme is 01 April 2026. The consideration for the transfer, as per a valuation report by SSPA & Co. (IBBI Registered Valuer), is the issuance of 3,93,53,93,685 (Three Hundred Ninety Three Crore Fifty Three Lakh Ninety Three Thousand Six Hundred and Eighty Five) fully paid-up equity shares of L&T Realty Properties (face value Rs. 10 each) to L&T at a premium of Rs. 6 per share.

The Boards of both companies approved the Scheme in their meetings held on 08 December 2025. The equity shares of L&T are listed on NSE and BSE, which provided their 'no adverse observation' letters dated 18 March 2026 and 19 March 2026, respectively.

Final Outcome

The Tribunal issued the following key directions:

  • The meeting of the equity shareholders of L&T (Transferor Company) is to be convened. Shri Kuldip Kumar Kareer (Former Member, NCLT) was appointed Chairperson, and Smt. Jyoti Kholia was appointed Scrutinizer for this meeting. The meeting must be held within 60 days, with notices sent 30 days prior and advertisements published in 'Business Standard' (English) and 'Loksatta' (Marathi).
  • The meeting of the secured creditors of L&T was dispensed with, as consent affidavits were obtained from 9 out of 15 creditors representing Rs. 27,420 Crores (over 90% of the total secured debt of Rs. 30,250 Crores).
  • The meetings of the unsecured creditors of L&T (1,19,419 creditors; Rs. 1,04,362.77 Crores outstanding) and L&T Realty Properties (2,597 creditors; Rs. 337.42 Crores outstanding) were dispensed with. The Tribunal relied on judicial precedent (Reliance Industries Ltd. case) and noted the positive net worth of both companies pre- and post-Scheme (L&T: Rs. 69,469.77 Cr pre, Rs. 73,740.42 Cr post; L&T Realty: Rs. 2,889.71 Cr pre, Rs. 4,915.69 Cr post) as sufficient to protect creditor interests.
  • The meeting of the equity shareholders of L&T Realty Properties (7 shareholders) was dispensed with, as 100% consent affidavits were obtained.
  • The companies were directed to serve notices of the Scheme application and this order to various regulatory authorities (Central Govt./Regional Director, ROC, Income Tax, GST, RBI, SEBI, NSE, BSE, Real Estate Regulatory Authorities) and to the secured and unsecured creditors who did not provide consent affidavits, allowing them 30 days to submit representations.
  • The requirement for notices to the Official Liquidator and the Competition Commission of India was dispensed with.

The matter will proceed further after the equity shareholder meeting report is submitted and representations from authorities are received.

Topics: Corporate Restructuring, Real Estate Demerger