Authority: National Company Law Tribunal, Division Bench, Court–1, Ahmedabad

Order Date: 09/10/2026

Case Overview

This is a joint Company Application (CA(CAA)/41(AHM)/2026) filed by R World Leisure Ltd (Demerged Company) and Chandra Exhibitor Pvt. Ltd (Resulting Company) under Sections 230-232 of the Companies Act, 2013. The application seeks approval for a Scheme of Arrangement involving the demerger, transfer, and vesting of the 'R-16 & Other Division Undertaking' from R World Leisure Ltd into Chandra Exhibitor Pvt. Ltd as a going concern with effect from the Appointed Date of 01.04.2026.

The Demerged Company, R World Leisure Ltd (CIN: U42110GJ1996PLC030454), is a public limited company engaged in the production and distribution of cinematographic films and operating cinema theatres. As of 31.03.2026, it had an authorized share capital of Rs. 14.00 crore and a paid-up equity share capital of Rs. 11.81 crore. It reported revenue from operations of Rs. 1,149.76 lakhs, other income of Rs. 182.67 lakhs, and a loss before tax of Rs. 30.58 lakhs for FY 2025-26. Its reserves and surplus stood at Rs. 6,849.04 lakhs. Out of its total assets of Rs. 10,575.66 lakhs, assets with a book value of Rs. 7,152.31 lakhs are part of the demerged undertaking.

The Resulting Company, Chandra Exhibitor Pvt. Ltd (CIN: U74999GJ2018PTC100989), is a private limited company in a similar line of business. As of 31.03.2026, it had an authorized and paid-up share capital of Rs. 5.00 lakhs. It reported revenue from operations of Rs. 267.16 lakhs, other income of Rs. 1.13 lakhs, and a loss before tax of Rs. 8.55 lakhs for FY 2025-26, with negative reserves and surplus of Rs. 28.46 lakhs.

The stated rationale for the scheme is to consolidate similar businesses under the same promoter group within the Resulting Company to achieve operational synergies, reduce costs, and enable focused growth. The scheme involves the issuance of 1 equity share of Chandra Exhibitor for every 1181 equity shares held in R World Leisure.

The Tribunal reviewed the application and supporting documents, including shareholder consents, creditor lists, and a valuation report. It noted a significant deficiency in the valuation report (Annexure-Q) dated 04.09.2026 by CA Abhishek Chhajed, which failed to provide the basis for the share exchange ratio or the valuation of the demerged undertaking and resulting companies, merely stating that the ratio was "determined by the management."

Final Outcome

The Tribunal allowed the application and issued specific directions to move the process forward:

  • Shareholder Meetings Dispensed With: The requirement to convene meetings of the equity shareholders of both companies was dispensed with, as affidavits of consent from all 12 equity shareholders of each company, representing 100% of the paid-up capital, were already on record.
  • Creditor Meetings Ordered: Meetings for secured and unsecured creditors were directed to be convened:
  • For R World Leisure Ltd (4 secured creditors with debt of Rs. 5.84 crore and 57 unsecured creditors with debt of Rs. 6.27 crore), meetings are scheduled for 28.11.2026 at 10:30 AM and 11:00 AM, respectively.
  • For Chandra Exhibitor Pvt. Ltd (24 unsecured creditors with debt of Rs. 2.38 crore), a meeting is scheduled for 28.11.2026 at 12:30 PM.
  • No secured creditors exist for Chandra Exhibitor.
  • Appointment of Chairperson and Scrutinizer: Mr. K.P.S. Dhillon, Advocate, was appointed as the Chairperson for these meetings for a remuneration of Rs. 1,50,000. Mr. Vishawjeet Singh, Advocate, was appointed as the Scrutinizer for a remuneration of Rs. 75,000.
  • Notice Requirements: The companies were directed to publish an advertisement in 'The Financial Express' (All India and Gujarat editions) and send individual notices to all creditors at least one month before the meetings.
  • Regulatory Notices: The companies must send notices of the scheme to the Regional Director (MCA), the Registrar of Companies (Ahmedabad), the Income Tax Department, and other relevant sectoral regulators within 7 days.
  • Valuation Report Mandate: Critically, the Tribunal directed the applicants to file a proper valuation report that determines the value of the shares of the demerged undertaking and the resulting company and provides a working of the share exchange ratio, in compliance with Sections 232(2)(c) and 232(2)(d) of the Companies Act, 2013. This must be submitted along with the second motion petition seeking final approval of the scheme.

The application was disposed of accordingly, and the process will continue with the convened creditor meetings and the filing of a second motion petition incorporating the mandated valuation report.

Topics: Corporate Restructuring, NCLT Proceeding, Demerger