Regional Director Vs Real Image LLP (NCLAT Delhi)
The National Company Law Appellate Tribunal (NCLAT) heard an appeal filed by the Regional Director, Southern Region, and the Registrar of Companies against an order of the National Company Law Tribunal (NCLT), Chennai, which had allowed the amalgamation of Real Image LLP with Qube Cinema Technologies Pvt. Ltd. under Sections 230 to 232 of the Companies Act, 2013.
The transferor entity was an Indian LLP incorporated under the Limited Liability Partnership Act, 2008, while the transferee was an Indian private limited company incorporated under the Companies Act, 2013. Both entities jointly sought sanction of a scheme of amalgamation before the NCLT. The NCLT held that although the Companies Act, 2013 did not expressly provide for merger of an Indian LLP into an Indian company, Section 234(2) permitted merger of a foreign LLP with an Indian company. Applying the principle of casus omissus, the NCLT concluded that there was no express legal bar against amalgamation of an Indian LLP into an Indian company and sanctioned the scheme.
Before the NCLAT, the appellants contended that Section 232 permits amalgamation only between companies and that the expression “company” is defined under Section 2(20) of the Companies Act, 2013. They submitted that Section 366 specifically enables an LLP to register as a company and only after such registration can it merge with another company under Section 232. They further relied on Sections 55 to 57 of the LLP Act, 2008, which provide for conversion into an LLP from specified entities, to contend that the statutory framework already prescribes the relevant conversion mechanism.
