Authority: National Company Law Tribunal, Mumbai Bench, Court IV

Order Date: 10 June 2026

Case Overview

This first motion company application (C.A.(CAA)/19/MB/2026) was filed under Sections 230-232 read with Section 66 of the Companies Act, 2013 and the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016. The application sought approval for a Scheme of Arrangement between Abhishek Millennium Contracts Private Limited (Demerged Company, CIN: U45200MH2004PTC145474) and Abhishek Millennium Contracts And Engineers Private Limited (Resulting Company, CIN: U70109MH2022PTC396082), and their respective shareholders. The Resulting Company is a wholly-owned subsidiary of the Demerged Company.

Both companies are engaged in the business of supply, installation, testing, and commissioning contractors for plumbing systems, firefighting systems, and allied activities. The Scheme provides for: (a) demerger of the Demerged Undertaking from the Demerged Company and vesting of the same with the Resulting Company; (b) consequent issue of new equity shares by the Resulting Company to shareholders of the Demerged Company at a 1:1 ratio (one equity share of ₹10 each in Resulting Company for each equity share of ₹10 each held in Demerged Company); and (c) reduction of the existing paid-up share capital of the Resulting Company amounting to ₹1,00,000 (10,000 equity shares of ₹10 each) which shall stand cancelled without any consideration.

The Board of Directors of both companies approved the Scheme in their meeting held on 23 December 2025, with the Appointed Date fixed as 1 April 2026. The stated benefits of the demerger include better operational efficiencies, revenue and cost synergies, optimum utilization of resources, better management focus, value creation for stakeholders, simplified shareholding structure, and achieving economic goals.

As of 31 March 2025, the Demerged Company had an authorized share capital of ₹3.10 crore and paid-up capital of ₹2.43 crore. The Resulting Company had an authorized and paid-up capital of ₹1,00,000 each. Both companies had 2 equity shareholders each, and 100% of shareholders had given consent to the Scheme, leading the Tribunal to dispense with shareholder meetings.

The Demerged Company had one secured creditor with a value of ₹23,78,725.43 (as of 31 October 2025) who had provided consent, and 577 unsecured creditors with a total value of ₹25,82,50,996. The Resulting Company had no secured or unsecured creditors. The pre-Scheme net worth of the Demerged Company was ₹96.72 crore, which would reduce to ₹64.64 crore post-Scheme, while the Resulting Company's net worth would increase from ₹0.06 crore to ₹82.87 crore.

The Tribunal observed that the Scheme is an arrangement under Section 230(1)(b) of the Companies Act, 2013 (not involving compromise with creditors) and that no prejudice would be caused to any creditors as the Resulting Company would continue to be owned by the same group with the same management and would protect creditors' interests.

Final Outcome

The Tribunal allowed the application and directed: (1) The Demerged Company to issue notices along with a copy of the Scheme to all 577 unsecured creditors via RPAD, email, or speed post, giving them 30 days to submit representations; (2) The Applicant Companies to serve notices under Section 230(5) of the Act and Rule 8 of the CCAA Rules to the Regional Director (Western Region), Mumbai; Registrar of Companies, Mumbai; Income Tax Authorities (Pr. CCIT, Mumbai); GST authorities; and any other relevant sectoral/regulatory authorities; (3) The Applicant Companies to submit details of corporate guarantees, performance guarantees, other contingent liabilities, pending IBC cases, other material litigation, and details of letters of credit and margin money; (4) The Applicant Companies to file an affidavit of service proving dispatch of notices to creditors and regulatory authorities.

The application was disposed of with these directions, moving the Scheme to the next stage of regulatory review and creditor notification.

Topics: Corporate Demerger, NCLT Approval, Creditor Rights