Case Details
Case Name: CP (CAA) No.43/230/HDB/2025 connected with CA (CAA) No.32/230/HDB/2025
Parties: Diamond Hitech Poultry Feeds Private Limited (Transferor Company) and Gold Hen Breeders Private Limited (Transferee Company)
Court/Authority: National Company Law Tribunal (NCLT), Hyderabad Bench - II
Date of Order: 22 May 2026
Period of Violation/Dispute: Not applicable - This is a scheme of amalgamation approval
Parties Involved
Petitioners:
- Diamond Hitech Poultry Feeds Private Limited (CIN: U15300TG2005PTC046531), represented by Director Mr. Ramesh Babu Garimella
- Gold Hen Breeders Private Limited (CIN: U01122TG1999PTC031003), represented by Director Mr. Ramesh Babu Garimella
Regulatory Authorities Involved:
- Regional Director (SER)
- Official Liquidator, Hyderabad
- Income Tax Authorities
- Registrar of Companies
Counsel Present:
- For Petitioners: Mr. Lokesh Agarwal, PCS
- For Regional Director: Ms. Kusum Yadav, Deputy Director
- For Official Liquidator: Mr. Deowrat Vasantrao Meeshram, Assistant Liquidator
Bench:
- Sri Rajeev Bhardwaj, Hon'ble Member (Judicial)
- Sri Sanjay Puri, Hon'ble Member (Technical)
Issues / Allegations / Violations
This is a petition for sanction of Scheme of Amalgamation under Sections 230-232 of the Companies Act, 2013. There are no allegations or violations. The petition seeks approval for amalgamation of Diamond Hitech Poultry Feeds Private Limited (wholly-owned subsidiary) with Gold Hen Breeders Private Limited (holding company).
Findings & Observations
Corporate Structure:
- Transferor Company (Diamond Hitech) is a wholly-owned subsidiary of Transferee Company (Gold Hen Breeders)
- Both companies are owned and managed by individuals of the same family
- Both companies are private limited and unlisted
Financial Position (as on 31.03.2025):
Transferor Company (Diamond Hitech):
- Authorized Capital: ₹4,00,00,000 (40 lakh equity shares of ₹10 each)
- Paid-up Capital: ₹2,99,00,000 (29.9 lakh equity shares of ₹10 each)
- Unsecured Creditors: 6 creditors, Amount Due: ₹56,86,37,778
- Current liabilities exceeded current assets by ₹56.92 crores
- Net worth substantially eroded
- Qualified auditor's report regarding non-compliance with AS-15 for gratuity liability
Transferee Company (Gold Hen Breeders):
- Authorized Capital: ₹30,00,000 (3 lakh equity shares of ₹10 each)
- Paid-up Capital: ₹10,00,020 (1,00,002 equity shares of ₹10 each)
- Unsecured Creditors: 1 creditor, Amount Due: ₹5,00,000
- Cash losses: ₹4,420 during the year and ₹5,340 in preceding year
- Revenue from operations: NIL for last two years
- Investment in Transferor Company shown at "zero" book value due to diminution
Regulatory Observations:
Regional Director's Observations (addressed through undertakings):
- Compliance with Foreign Exchange Management Act, 1999 (not applicable as no foreign exposure)
- Compliance with SEBI Act, 1992 (not applicable as unlisted companies)
- Filing of order in e-Form INC-28 within 30 days
- Preservation of books of account and records
- Payment of any income tax demands that may arise
- Amendment of Memorandum of Objects if required
- Protection of employee interests
- Payment of differential fee under Section 232(3)(i) of Companies Act
- Rationale for amalgamation of loss-making companies
Official Liquidator's Observations (addressed through undertakings):
- No retrenchment of employees as on Appointed Date (01.04.2025)
- Accounting treatment for gratuity liability (AS-15 compliance)
- Explanation for current liabilities exceeding current assets
- Explanation for "zero" book value of investment in Transferor Company
- Rationale for amalgamation of loss-making companies
- Accounting treatment for netting investment against net worth
Penalties / Settlements / Directions
No penalties imposed as this is a scheme approval. The Tribunal issued the following directions:
1. Scheme Sanctioned: Scheme of Amalgamation is approved with Appointed Date as 01.04.2025
2. Asset Transfer: All assets, properties, rights and liabilities of Transferor Company stand transferred to Transferee Company
3. Compliance Directions:
- Preserve books of accounts and records (Section 239 of Companies Act)
- Comply with all observations of Regional Director and Official Liquidator
- Ensure statutory compliance of all applicable laws
- Not absolved from any statutory liabilities
- Comply with Rule 17(2) of Companies (Compromise, Arrangement and Amalgamation) Rules, 2016
- File certified copy of order in Form INC-28 with ROC within 30 days
- Take all consequential statutory steps
- Continue all pending legal proceedings by/against Transferee Company
- Strictly comply with Accounting Standards under Section 133 of Companies Act
- Revenue authorities may still recover existing and previous tax liabilities
- File annual compliance statement with ROC certified by CA/CS/Cost Accountant (Section 232(7))
4. Specific Undertakings by Companies:
- No retrenchment of employees as on Appointed Date
- Protect interests of all employees without break in service
- Pay any income tax demands that may arise
- Amend Memorandum of Objects if required
- Pay differential fee under Section 232(3)(i) after setting off fees paid
- Account for employee benefit obligations as per accounting standards
- Follow proper accounting treatment for investment netting
Corrective Actions & Future Obligations
Employee Protection: All employees of Transferor Company as on Effective Date shall become employees of Transferee Company without any break or interruption in service
Accounting Compliance: Transferee Company must strictly comply with Accounting Standards prescribed under Section 133 of Companies Act, 2013
Annual Compliance Filing: Until completion of amalgamation, companies must file annual statement with ROC certified by CA/CS/Cost Accountant confirming compliance with the Scheme
Record Preservation: Books of accounts and records must be preserved and not disposed without prior permission of Central Government
Tax Compliance: Companies remain liable for all existing and previous tax liabilities; tax authorities may take appropriate recourse
Final Ruling & Enforcement
The NCLT Hyderabad Bench allowed the Company Petition and sanctioned the Scheme of Amalgamation with the following key rulings:
1. Scheme Approval: The Scheme of Amalgamation of Diamond Hitech Poultry Feeds Private Limited with Gold Hen Breeders Private Limited is sanctioned and approved
2. Effective Date: The scheme is binding on all equity shareholders, creditors, employees, statutory authorities and stakeholders with Appointed Date of 01.04.2025
3. Asset Transfer: All assets, properties, rights and liabilities of the Transferor Company stand transferred to the Transferee Company without requiring further act or deed
4. Compliance Enforcement: The companies must comply with all directions regarding record preservation, statutory compliance, tax obligations, and filing requirements
5. Ongoing Supervision: The companies must file annual compliance statements with ROC until the amalgamation is fully implemented
The petition stands disposed of with these directions and the scheme is effective immediately upon issuance of this order.