Case Law Details
Jaypore E-Commerce Private Limited Vs TG Apparel & Decor Private Limited (NCLT Mumbai)
The Mumbai Bench of the National Company Law Tribunal (NCLT) sanctioned a Scheme of Amalgamation under Sections 230 to 232 of the Companies Act, 2013 involving two wholly owned subsidiary companies and their parent company. The Scheme had been approved by the respective Boards of Directors, with the appointed date fixed as 01.04.2026, and was placed before the Tribunal after compliance with its earlier directions.
The petitioners submitted that the proposed amalgamation would simplify the legal and operating structure, streamline business and administrative operations, reduce operating and administrative costs, and strengthen the financial position and flexibility of the amalgamated company, thereby enhancing overall shareholder value. The Tribunal also noted that, since both amalgamating companies were wholly owned subsidiaries of the amalgamated company, no consideration or fresh allotment of shares would be made under the Scheme. The shares held by the amalgamated company in the subsidiary companies would stand cancelled upon the Scheme becoming effective.
The Tribunal recorded that the petitioner companies had complied with the procedural requirements, including issuance of notices to statutory authorities, publication of advertisements, filing of affidavits of service, and production of the prescribed financial statements, board resolutions, auditor’s certificates and other supporting documents. Earlier, the Tribunal had dispensed with the meetings of shareholders and creditors after considering the consent affidavits and the fact that the amalgamating companies were wholly owned subsidiaries of the amalgamated company.
The Regional Director filed a report raising certain observations, which were addressed through undertakings given by the petitioner companies. The petitioners undertook to comply with the applicable provisions of the Companies Act, accounting standards and directions of statutory authorities. They also clarified that the Scheme was exempt from obtaining a No Objection Certificate from the stock exchanges under Regulation 37(6)(a) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, while confirming that the Scheme had been disclosed to the stock exchanges in accordance with the applicable SEBI circulars. The Regional Director accepted the explanations and stated that no further objection survived.
The Official Liquidator reported that the affairs of the amalgamating companies had not been conducted in a manner prejudicial to the public interest or the interests of creditors. The Central Goods and Services Tax Authority also submitted observations regarding an outstanding GST demand against one of the amalgamating companies. The petitioners responded that the demand had arisen from an ex parte order, the relevant tax liability had already been discharged, an appeal was being preferred, and Clause 10 of the Scheme preserved all pending legal proceedings. They further stated that the rights of the GST authorities to proceed against the amalgamated company in accordance with law would remain unaffected. The Tribunal noted that these submissions adequately protected the rights of the GST authorities.
After considering the reports of the Regional Director, the Official Liquidator, and the petitioners’ affidavit responding to the GST Authority’s observations, the Tribunal held that the Scheme was fair and reasonable, did not violate any provision of law or public policy, and that all observations of the statutory authorities had been satisfactorily addressed. It therefore found no impediment to sanctioning the Scheme.
The Tribunal clarified that the Income Tax Department would remain free to examine any tax consequences arising from the Scheme and could take action under the Income-tax Act if it found that the Scheme resulted in tax avoidance. It further directed that all liabilities of the transferor companies would vest in the transferee company, while liability for offences committed by officers in default prior to the amalgamation would continue in accordance with Section 240 of the Companies Act, 2013. The petitioner companies were directed to file the certified copy of the order and the Scheme with the Registrar of Companies in e-Form INC-28 and lodge the authenticated order with the concerned stamp authority for adjudication of stamp duty within the prescribed time.
Accordingly, the NCLT sanctioned the Scheme of Amalgamation and allowed the company petition after holding that all statutory requirements had been fulfilled, while preserving the statutory rights of the Income Tax Department, GST authorities and other competent authorities to proceed in accordance with law.
FULL TEXT OF THE NCLAT JUDGMENT/ORDER
1. The present petition seeks sanction of the Scheme of Amalgamation of Jaypore E-Commerce Private Limited (“First Petitioner Company/ Amalgamating Company No.1”) and TG Apparel & Decor Private Limited (“Second Petitioner Company/ Amalgamating Company No.2”) and Aditya Birla Fashion And Retail Limited (“Third Petitioner Company/ Amalgamated Company”) and their respective shareholders (“Scheme” or “this Scheme”) from this Tribunal under Sections 230 to 232 of the Companies Act, 2013 read with Companies (Compromises, Arrangement and Amalgamations) Rules, 2016 and other applicable regulations framed under the Company Law.
2. Jaypore E-Commerce Private Limited, the First Petitioner Company/ Amalgamating Company No.1 with CIN: U51900MH2012PTC422224 was incorporated on 21.02.2012 under the provisions of Companies Act, 1956 in India, having its registered office at Piramal Agastya Corporate Park, Building A, 4th and 5th Floor, Unit No. 401, 403, 501, 502, L.B.S Road, Kurla Mumbai Maharashtra – 400070. The Petitioner Company No.1 is engaged in the business of dealing in linen, readymade garments, textiles, coated fabrics, jewellery, accessories and also provides marketplace and business support services to other businesses. The First Petitioner Company is a wholly owned subsidiary of Third Petitioner Company.
3. TG Apparel & Decor Private Limited, the Second Petitioner Company/ Amalgamating Company No.2 bearing the CIN: U51109MH2015PTC430930, was incorporated on 19.12.2015 as a private limited company under the provisions of the Companies Act, 1956, having its present registered office at Piramal Agastya Corporate Park, Building A, 4th and 5th Floor, Unit No. 401, 403, 501, 502, L.B.S Road, Kurla Mumbai Maharashtra – 400070. The Amalgamating Company No. 2 is currently not carrying any business activity. The Second Petitioner Company is a wholly owned subsidiary of Third Petitioner Company.
4. Aditya Birla Fashion And Retail Limited, the Third Petitioner Company/ Amalgamated Company with CIN: L18101MH2007PLC233901 was incorporated on 19.04.2007, having its present registered office at Piramal Agastya Corporate Park, Building A, 4th and 5th Floor, Unit No. 401, 403, 501, 502, L.B.S Road, Kurla, Mumbai, Maharashtra – 400070. The Company is currently engaged in the business of manufacturing and retailing of branded apparels/ accessories and runs a chain of apparels and accessories retail stores in India.
5. The Board of Directors of the First, Second and Third Petitioner Companies, being the Amalgamating and Amalgamated Companies respectively, have approved the proposed Scheme of Amalgamation in their respective Board Meetings held on 02.2026.
6. The Appointed Date for the proposed Scheme of Amalgamation, fixed under the Scheme is 01.04.2026.
7. It is submitted that the present Company Petition has been filed in consonance with the Order dated 06.04.2026 passed by this Tribunal in C.A. (CAA) No. 38/MB/2026. The Petitioner Companies have complied with the directions contained in the said Order, including issuance of notices to the concerned statutory authorities, publication of advertisements as directed, filing of the Affidavit of Service and furnishing of the additional information as directed by this Tribunal. The reports/representations, if any, received from the statutory authorities have been placed on record and dealt with hereinafter.
8. The Rationale for the Scheme of Amalgamation of the Petitioner Companies is as follows:
The proposed amalgamation of the Amalgamating Companies with the Amalgamated Company, would, inter alia have the following benefits:
a. Simplification of legal & operating structure;
b. Streamlining of business &; administrative operations consequently reducing administrative &; other operating costs;
c. Seamless integration and better financial strength and flexibility for the Amalgamated Company, which would result in maximizing overall shareholder value Consideration
9. The following documents have been placed on record by the Petitioner Companies and have been perused by this Tribunal:
a. Certificate of Incorporation, MOA & AOA of the Petitioner Companies.
b. Audited Financial Statements of Petitioner Companies for the year ended 31.03.2025.
c. Unaudited Financial Statements of Account as on 31.12.2025 of the Petitioner Companies.
d. Board resolutions of Petitioner Companies approving the Scheme dated 05.02.2026.
e. Copy of Scheme of Amalgamation
f. Certificate by Statutory Auditors on Accounting Treatment under the Scheme by the Third Petitioner Company/Amalgamated Company.
g. Certificate on Net-worth under the Scheme by the Third Petitioner Company/ Amalgamated Company.
h. Copy of an Affidavit proving service upon the statutory authorities and upon the Unsecured Creditors of the Third Petitioner Company having outstanding balance of ₹25,00,000/- and above.
i. Copy of advertisement in newspaper by the Petitioner Companies as directed by NCLT in Business Standard in English and in Loksatta in Marathi.
10. Learned Counsel for the Petitioner Companies submits that, by Order dated 06.04.2026 passed in C.A.(CAA)No.38!MB!2026, this Tribunal dispensed with the requirement of convening and holding the meetings of the Equity Shareholders and Secured Creditors and Unsecured Creditors of the First Petitioner Company! Amalgamating Company No.1 and Second Petitioner Company! Amalgamating Company No.2 in view of the consent affidavits obtained from the Equity Shareholders, Secured Creditors and requisite majority of Unsecured Creditors and considering that both the Petitioner Companies are wholly owned subsidiaries of the Third Petitioner Company ! Amalgamated Company. Further, this Tribunal also dispensed with the requirement of convening and holding the meetings of the Equity Shareholders, Secured Creditors and Unsecured Creditors of the Third Petitioner Company ! Amalgamated Company, while directing issuance of notice of the Scheme to its shareholders and specified creditors, in terms of the said Application Order.
11. Learned Counsel further submits that, in respect of the Third Petitioner Company/ Amalgamated Company, this Tribunal, by Order dated 06.04.2026 passed in C.A. (CAA) No. 38/MB/2026, while dispensing with the meeting of its Unsecured Creditors, directed the Third Petitioner Company to serve notices together with a copy of the Scheme upon all its Secured and Unsecured Creditors having an outstanding balance of ₹ 25,00,000/- (Rupees Twenty Five Lakhs only) or more, inviting their representations, if any, within the time stipulated therein. It is submitted that the said directions have been duly complied with and an affidavit evidencing such service upon the concerned Secured and Unsecured Creditors has been placed on record.
12. A certificate dated 05.02.2026 issued by Price Waterhouse & Co Chartered Accountants LLP, the Statutory Auditor of the Third Petitioner Company/ Amalgamated Company states that the accounting treatment proposed in the scheme of Amalgamation is in conformity with the accounting standards prescribed under Section 133 of the Companies Act, 2013 was placed on record along with the Company Application.
13. The consideration for the proposed scheme of Amalgamation is as follows: Since the Amalgamating Companies are wholly owned subsidiaries of the Amalgamated Company, upon this Scheme becoming effective, the shares held directly by the Amalgamated Company in the Amalgamating Companies along with nominees, will stand cancelled and no consideration whatsoever shall pass from the Amalgamated Company. All such shares the of the Amalgamating Companies and the investment of the Amalgamated Company in such shares as appearing in the books of the Amalgamated Company shall stand cancelled upon the Scheme becoming effective without issue or allotment of new shares in lieu of shares of the Amalgamating Companies.
14. The Regional Director, Western Region, Ministry of Corporate Affairs, Mumbai, has filed his Report/Affidavit dated 08.05.2026, therein and the Petitioner Companies have filed their joint affidavit in reply to regional director’s report on 25.05.2026 and the Petitioners have clarified and undertaken to comply with the applicable provisions of the Companies Act, 2013, the applicable Accounting Standards and the directions of the statutory authorities. Further, it has been clarified by the Petitioner Companies that, insofar as the observations relating to the applicability of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are concerned, the present Scheme is between the holding company and its wholly owned subsidiaries and is exempt from obtaining a No Objection Certificate from the Stock Exchanges under Regulation 37(6)(a) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. It was further submitted that the Scheme had been filed with the Stock Exchanges for disclosure purposes in accordance with the applicable SEBI Circulars. The learned representative appearing on behalf of the Regional Director submitted that, in view of the explanations and undertakings furnished by the Petitioner Companies, the observations contained in the Report stand satisfactorily addressed and the Regional Director has no further objection to the Scheme.
15. The Official Liquidator has filed his Report dated 19.05.2026 pursuant to the order dated 06.04.2026 passed by this Tribunal. The Official Liquidator, upon examination of the records and documents furnished by the First Petitioner Company /Amalgamating Company No.1 and Second Petitioner Company/ Amalgamating Company No.2, has reported that the affairs of the First Petitioner Company /Amalgamating Company No.1 and Second Petitioner Company/ Amalgamating Company No.2 have not been conducted in a manner prejudicial to the public interest or the interest of creditors. The Report of the Official Liquidator is taken on record.
16. The Central Goods and Services Tax Authority, vide its communication dated 15.05.2026, submitted certain observations in relation to an outstanding GST demand against the Second Petitioner Company. The Petitioners filed an Affidavit in Rejoinder dated 29.05.2026 explaining that the demand arose pursuant to an ex parte order, that the relevant tax liability had already been discharged and that an appeal is being preferred against the said order. The Petitioners have further submitted that Clause 10 of the Scheme preserves all pending legal proceedings and that the rights of the CGST Authority to proceed against the Amalgamated Company, in accordance with law, shall remain unaffected by the sanction of the Scheme. It is noted that, said submission protects the rights of the CGST Authority to proceed in accordance with law, if so advised.
17. We have considered the submissions advanced on behalf of the Petitioner Companies, the Report of the Regional Director, the Report of the Official Liquidator and the Affidavit in Rejoinder filed by the Petitioners in response to the observations of the Central Goods and Services Tax Authority. The explanations and undertakings furnished by the Petitioner Companies are found to be satisfactory and shall remain binding upon them.
18. From the material on record, the Scheme appears to be fair and reasonable and is not in violation of any provisions of law or contrary to public policy. The observations received from the statutory authorities stand duly addressed by the Petitioner Companies and no impediment remains for sanction of the Scheme.
19. The Income Tax Department will be at liberty to examine the aspect of any tax payable as a result of this scheme and in case it is found that the scheme ultimately results in tax avoidance under the provisions of Income Tax Act, it shall be open to the Income tax authorities to take such action as may be permissible in law.
20. Since all the requisite statutory compliances have been fulfilled, Company Petition bearing P.(CAA)/52(MB)2026 is made absolute.
21. Needless to say, all liabilities accruing in the transferor company(s) shall be transferred to the Transferee Company, however, the liabilities in respect of offences committed under this act by the officers in default, of the transferor company prior to its merger, amalgamation or acquisition shall continue after such merger, amalgamation or acquisition as provided in Section 240 of the Companies Act, 2013.
22. The Petitioner Companies are directed to file a certified copy of this order along with a copy of the Scheme with the concerned Registrar of Companies, electronically, in e-Form INC-28 within 30 days from the date of receipt of this order, duly certified by the Registrar, as the case may be, of this Tribunal.
23. The Petitioner Companies to lodge a certified copy of this order and the Scheme duly authenticated by the Designated Registrar, as the case may be, of this Tribunal, with the concerned Superintendent of Stamps, for the purpose of adjudication of stamp duty payable, if any, on the same within 60 working days from the date of receipt of the certified copy of this order.
24. All Authorities concerned to act on a copy of this Order along with Scheme duly authenticated by the Registrar, National Company Law Tribunal, Mumbai. Ordered accordingly.
25. The present Company Petition i.e., P.(CAA)/52(MB)2026 IN C.A.(CAA)/38(MB)2026 is allowed and disposed of, accordingly.
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