Mumbai Bench approves demerger and reallocation of undertakings, ensuring statutory compliance and fairness
In a significant decision dated January 6, 2026, the National Company Law Tribunal (NCLT), Mumbai Bench, sanctioned the Composite Scheme of Arrangement involving Poonawalla Finance Private Limited and its associated entities, under Sections 230 to 232 of the Companies Act, 2013. The scheme, which involves the demerger and reallocation of undertakings, was deemed fair, reasonable, and compliant with statutory requirements by the Tribunal.
The petitioners, Poonawalla Finance Private Limited, Rising Sun Holdings Private Limited, and Synergist Realtors Private Limited, sought approval for a strategic reorganization to focus on distinct business lines, enhance growth potential, and attract strategic investments. The scheme was unanimously approved by their respective Boards of Directors and supported by a requisite majority of shareholders and creditors.
The appointed dates under the scheme are set for October 1, 2024, and January 1, 2025. The Tribunal's order mandates that all tax liabilities, including GST, transfer to the resulting companies concerning demerged undertakings. The Income Tax Department retains the right to address any tax implications arising from the scheme.
The NCLT's order also emphasizes compliance with regulatory requirements, directing the petitioner companies to file certified copies of the order with statutory authorities and adhere to stamp duty regulations. The decision ensures no adverse impact on employees due to the demerger, with all employees of the demerged companies transitioning to the resulting companies without interruption.
This decision underscores the Tribunal's reliance on the commercial wisdom of shareholders and creditors, aligning with the precedent set by the Supreme Court in Miheer H. Mafatlal v. Mafatlal Industries Ltd. The NCLT highlighted that shareholders and creditors, as the best judges of their interests, should not have their decisions interfered with lightly.
The Mumbai Bench's directive to file necessary documentation within stipulated timelines further underscores the emphasis on procedural compliance. The Tribunal clarified that its order does not exempt the petitioner companies from statutory obligations such as stamp duty and taxes.
Overall, the NCLT's approval of the Composite Scheme of Arrangement marks a pivotal step for the involved entities, setting a foundation for focused business strategies and potential growth trajectories.
Bottom Line:
Sanction of Composite Scheme of Arrangement under Sections 230 to 232 of the Companies Act, 2013, involving demerger and reallocation of undertakings, approved as fair, reasonable, and compliant with statutory requirements.
Statutory provision(s): Sections 230 to 232 of the Companies Act, 2013, Section 66, Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.
Poonawalla Finance Private Limited, (NCLT)(Mumbai Bench) : Law Finder Doc Id # 2834422
