Case Details

Case Name: In the Matter of PJB Engineers Private Limited and PJB Realty Private Limited

Authority: National Company Law Tribunal, Bengaluru Bench

Case Number: CP (CAA) No. 52/BB/2025

Petition Filed: 13.11.2025

Order Date: 22.05.2026

Appointed Date: 01.04.2025

First Motion Application: CA (CAA) No. 38/BB/2025 (Order dated 29.10.2025)

Parties Involved

Petitioner Company 1 (Demerged Company): PJB Engineers Private Limited (CIN: U74210KA1999PTC024856)

Petitioner Company 2 (Resulting Company): PJB Realty Private Limited (CIN: U68200KA2025PTC198937)

Common Directors: Present in both companies

Shareholding Pattern:

  • PJB Engineers: Mr. Pannkuzhil Joseph Baby (99%), Mrs. Shibi Baby (1%) as of 31.03.2024
  • PJB Realty: PJB Engineers held 99.80% stake initially (as per Spice+ Part B form)

Regulatory Authorities:

  • Regional Director, South East Region, Ministry of Corporate Affairs
  • Registrar of Companies, Karnataka, Bengaluru
  • Income Tax Department, Bangalore

Legal Representatives:

  • For Petitioner: Shri Saji P. John & Ajai P.J., Advocates
  • For Income Tax: Shri Ganesh Ghale, Advocate
  • For ROC: Shri Venkatesh Prasad R

Issues / Allegations / Violations

The Regional Director raised multiple observations requiring clarification:

Corporate Structure Issues:

  • Demerger between wholly-owned subsidiary required explanation
  • Valuation report not attached for share allocation
  • Authorized share capital of Resulting Company (₹100,000) may be inadequate for issuing 1000 shares of ₹100 each

Financial Compliance Issues:

  • Disputed statutory dues: ₹88,43,431 towards Income Tax and GST (per Note vii(b) of Auditor's Report)
  • Undisputed statutory dues: ₹157.10 lakhs (per Note 9 of Financial Statements)
  • MSME outstanding dues: ₹257.70 lakhs (per Note 8 of Financial Statements)
  • Investments in PJB Projects Private Limited requiring Section 186 compliance
  • Related party transactions requiring Section 188 compliance

Operational Issues:

  • Multiple open charges on Demerged Company's assets
  • Employee protection measures for demerged undertaking staff
  • Object clauses of Resulting Company needed modification
  • Preservation of books and papers as per Section 239
  • Continuation of liability for offences under Section 240

Findings & Observations

The Tribunal noted:

  • The Scheme involves demerger of "real estate and investment division" from PJB Engineers to PJB Realty
  • Resulting Company was incorporated on 28.02.2025 as wholly-owned subsidiary
  • Share allocation: 990 shares to Mr. P.J. Babu and 10 shares to Mrs. Shibi Baby post-demerger
  • Mirror shareholding pattern to be maintained post-demerger
  • All secured creditors had provided consent affidavits (produced in First Motion Application)
  • Auditors certified accounting treatment compliance with applicable standards
  • No open complaints, prosecution, or investigations pending against either company

Penalties / Settlements / Directions

Monetary Undertakings Provided:

  • Demerged Company cleared undisputed statutory dues of ₹157.10 lakhs (payment receipts filed)
  • Demerged Company to settle disputed tax dues of ₹88,43,431 as matters attain finality
  • MSME dues of ₹257.70 lakhs to be settled as per MSME Act provisions

Operational Directions:

  • Resulting Company to increase authorized share capital if required
  • Resulting Company to preserve books and accounts as per law
  • Resulting Company to protect interests of employees from demerged undertaking
  • Resulting Company to amend objects clause if needed
  • Compliance with Sections 170A, 186, 188, 239, and 240 of Companies Act, 2013
  • Income Tax demands to be settled as they crystallize

Corrective Actions & Future Obligations

Share Capital Structure:

  • Existing shareholding of Demerged Company in Resulting Company (99.80%) will stand cancelled
  • 1000 new equity shares of ₹100 each to be issued to Demerged Company shareholders

Asset Transfer:

  • List of charges to be transferred to Resulting Company filed as Annexure 1
  • Freehold and leasehold properties schedule to be filed via affidavit

Employee Protection:

  • All staff, workmen, and employees of demerged undertaking to be absorbed by Resulting Company
  • Continuity of service terms maintained

Regulatory Compliance:

  • Certified copy of order to be delivered to ROC within 30 days
  • All documents to be consolidated by ROC
  • Form CAA-7 to be issued upon filing property schedules

Final Ruling & Enforcement

The Tribunal:

  • Approved the Scheme of Arrangement (Demerger) with Appointed Date of 01.04.2025
  • Directed the Scheme is binding on all directors, shareholders, and creditors
  • Clarified this order doesn't grant exemption from stamp duty, taxes, or other charges
  • Noted statutory authorities were satisfied with company responses
  • Disposed of CP (CAA) No.52/BB/2025
  • All undertakings given by companies are binding and require meticulous compliance