Case Details

Case Name: CP (CAA) 50/Chd/Hry of 2025 (2nd Motion)

Parties: Megashop Retail Private Limited (Petitioner Company No. 1/Demerged Company) and V-Bazaar Retail Private Limited (Petitioner Company No. 2/Resulting Company)

Court/Authority: National Company Law Tribunal Chandigarh Bench (Court-II)

Order Date: 22 May 2026

Appointed Date for Scheme: 01 April 2025

Period of Proceedings: First Motion Application filed as CA(CAA) No. 14/Chd/Hry/2025, approved on 08 August 2025

Parties Involved

Petitioners:

  • Megashop Retail Private Limited (CIN: U52500HR2022PTC127817, PAN: AAQCM1105R)
  • V-Bazaar Retail Private Limited (CIN: U52100HR2016PTC126327, PAN: AAFCV3666D)

Regulatory Authorities:

  • Regional Director (RD) and Registrar of Companies (ROC), Chandigarh
  • Income Tax Department
  • Official Liquidator

Legal Representatives:

  • Mr. Nahush Jain, Advocate for Petitioner Companies
  • Dr. Kishorkumar Devarwade, Assistant Director for ROC Chandigarh/RD
  • Mr. Edward Augustine George, Advocate for Official Liquidator
  • Mr. Varun Issar, Sr. Standing Counsel for Income Tax Department

Issues / Allegations / Violations

The petition was filed under Sections 230 & 232 of the Companies Act, 2013 for sanction of a Scheme of Arrangement for Demerger between Megashop Retail and V-Bazaar Retail. The regulatory authorities raised specific concerns:

Income Tax Department Observations for Megashop Retail (Company 1):

  • Requested direction that all Income Tax Act compliances be made by the amalgamated entity
  • Noted Megashop had carry forward losses of ₹6,32,78,875/- for AY 2025-26 intended to be set off against V-Bazaar income, which was "adverse to the interest of revenue"
  • Requested protection of revenue loss by taking undertaking from resultant company
  • Noted outstanding demand of ₹13,14,31,506/- and carry forward losses of ₹13,02,93,541/-

Regional Director Observations for V-Bazaar (Company 2):

  • Noted statutory dues from Income Tax and GST authorities requiring clarification

Findings & Observations

The Tribunal found:

  • The Scheme appears prima facie compliant with all requirements under the Companies Act, 2013
  • Petitioner companies provided adequate clarifications to statutory authorities' observations
  • The proposed Scheme is bona fide and in the interest of shareholders and creditors
  • All requisite statutory compliance has been fulfilled
  • Meetings of secured and unsecured creditors of both companies were convened on 09 October 2025 and approved the Scheme with requisite majority

Penalties / Settlements / Directions

No penalties imposed. The Tribunal sanctioned the Scheme with specific directions:

Tax-Related Safeguards:

  • Income Tax Department free to examine tax payable resulting from the scheme
  • If scheme results in tax avoidance or non-compliance with Income Tax Act, department may initiate appropriate action
  • Scheme sanction shall not adversely affect rights of Income Tax Department
  • Treatment of carry forward losses subject to Section 72A and applicable provisions of Income Tax Act, 1961

Operational Directions:

  • All property, rights and powers of demerged undertaking transferred to V-Bazaar Retail
  • All liabilities and duties of demerged business transferred to V-Bazaar Retail
  • All contracts pertaining to demerged undertaking transferred to V-Bazaar Retail
  • All employees of demerged undertaking transferred to V-Bazaar without service interruption
  • All pending proceedings against demerged business to continue against V-Bazaar
  • V-Bazaar to allot shares to existing Megashop members as per Scheme

Corrective Actions & Future Obligations

Filing Requirements:

  • Petitioner companies to furnish self-certified copy of approved Scheme and Schedule of Assets to Designated Registrar
  • V-Bazaar to file certified copy of Order with Scheme and Schedule of Assets with ROC in e-form INC-28 within 30 days
  • V-Bazaar to lodge copy of Order and Scheme with Superintendent of Stamps for stamp duty adjudication within 60 days

Compliance Undertakings:

  • Megashop undertook that treatment of carry forward losses subject to Section 72A of Income Tax Act
  • Both companies undertook that Scheme does not extinguish, reduce or adversely affect rights of Income Tax Department
  • Companies committed to discharge all statutory liabilities as they crystallize

Final Ruling & Enforcement

The Tribunal:

  • Sanctioned the Scheme of Arrangement between Megashop Retail and V-Bazaar Retail
  • Declared the Scheme binding on both companies, their shareholders and creditors
  • Approved the Appointed Date of 01 April 2025 for the Scheme
  • Disposed of the Company Petition (CAA) No. 50/Chd/Hry of 2025
  • Directed all regulatory authorities to act on authenticated copy of the Order
  • Preserved right of aggrieved persons to apply for necessary directions