Authority: National Company Law Tribunal, Bengaluru Bench

Order Date: 18 June 2026

Case Overview

This second motion petition was filed under Sections 230-232 of the Companies Act, 2013 by Amulya Exim Private Limited (Transferor Company 1), Goel Ferro Alloys Private Limited (Transferor Company 2), Padmavati Coke Private Limited (Transferor Company 3), and Padmavati Ferrous Limited (Transferee Company) seeking sanction of a Scheme of Arrangement for their amalgamation. The first motion application (C.A (CAA) No. 3/BB/2025) was approved on 24 March 2025, wherein meetings of equity shareholders, secured creditors, and unsecured creditors were dispensed with. Notices were served to statutory authorities as required under Section 230(5), with no objections received within the stipulated 30-day period.

The appointed date for the amalgamation was set as 01 April 2024. The scheme proposed that all properties, rights, interests, liabilities, obligations, duties, and engagements of the three transferor companies would transfer to and vest in Padmavati Ferrous Limited without further act or deed. The transferor companies would subsequently be dissolved without winding up.

The Regional Director (RD) and Registrar of Companies (ROC) filed a common report (Dairy No.6982 dated 11 December 2025) raising multiple observations, including:

  • Concerns about compliance with Section 90 of the Companies Act, 2013 regarding significant shareholding patterns
  • Open charges existing for Transferor Company 3 and Transferee Company requiring No Objection Certificates
  • Violations noted in the Transferee Company's auditor report regarding Accounting Standard-15 (Employee Benefits) and Section 135 (CSR spending)
  • Non-filing of Board resolution for scheme approval in e-form MGT-14 by the Transferee Company
  • Discrepancy in the Transferee Company's paid-up capital (₹69,89,69,160 in scheme vs. MCA records)
  • Outstanding statutory dues of ₹60,44,140, disputed deferred tax of ₹10,39,03,928, and disputed Income Tax/GST dues of ₹4,75,12,463
  • MSME outstanding dues of ₹38,98,226
  • Questions about the rationale for merging entities with nil revenue (transferor companies) with a revenue-generating entity (Transferee Company with ₹189.35 crores revenue)
  • Concerns about the share exchange ratio rationale and valuation methodology

The Official Liquidator's report (dy.no.4828 dated 02 September 2025) noted that all three transferor companies had nil revenue from operations for the last two years and no expenditure on employee salaries and wages, while the scheme provided for employee protection and continuity.

The Income Tax Department's report (Diary No.4793 dated 01 September 2025) highlighted outstanding demands for Padmavati Coke Private Limited totaling ₹24,586 for AY 2008-09, ₹1,52,670 for AY 2010-11, and ₹72,970 for AY 2011-12, and sought compliance with Sections 176 and 170A of the Income Tax Act, 1961.

The petitioner companies filed comprehensive reply affidavits addressing all observations, providing undertakings for compliance, and demonstrating resolution of several issues including payment of outstanding TDS (₹60,44,140), MSME dues (₹38,98,226), transfer of unspent CSR amount (₹15,74,292) to an escrow account, and obtaining NOCs from secured creditors.

Regarding the share exchange ratio, the petitioners explained that it was determined by Alpha Value Consulting Valuation LLP using the Book Value Method with 100% weightage, considering the group restructuring nature of the amalgamation. The ratio was set as:

  • 269 equity shares of Transferee Company for every 100 shares in Transferor Company 1
  • 1,012 equity shares of Transferee Company for every 100 shares in Transferor Company 2
  • 29 equity shares of Transferee Company for every 100 shares in Transferor Company 3

The petitioners justified the amalgamation of nil-revenue entities with a revenue-generating entity as an internal group consolidation aimed at simplification, cost reduction, and operational efficiencies within the same promoter group.

Final Outcome

The NCLT approved the Scheme of Arrangement with the appointed date of 01 April 2024, declaring it binding on all shareholders and creditors of the transferor and transferee companies. The three transferor companies (Amulya Exim, Goel Ferro Alloys, and Padmavati Coke) stand dissolved without winding up. The tribunal directed:

  • Delivery of the order to the Registrar of Companies within 30 days
  • Compliance with Section 170A of the Income Tax Act, 1961
  • Compliance with TDS provisions and FEMA regulations for outward payments
  • Implementation of all undertakings provided by the petitioner companies in response to regulatory observations
  • That the sanction does not exempt the companies from payment of stamp duty, taxes, or any other charges payable under law

The tribunal noted that all objections from regulatory authorities had been adequately addressed through replies and undertakings filed by the petitioner companies.

Topics: Corporate Amalgamation, Regulatory Compliance, NCLT Approval