NCLT Chennai Allows Sun TV Merger Without Separate Second Motion for Wholly Owned Subsidiary

In re Sun Direct Go Private Limited (NCLT Chennai)

The NCLT Chennai considered a joint application filed by Sun Direct GO Private Limited, the Transferor Company, and Sun Direct TV Private Limited, the Transferee Company, under Sections 230-232 of the Companies Act, 2013, read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and the National Company Tribunal Rules, 2016, concerning their Scheme of Amalgamation.

Sun Direct GO Private Limited was incorporated on 24 June 2024 and is a wholly owned subsidiary of Sun Direct TV Private Limited. Its authorised and issued, subscribed and paid-up share capital was Rs. 10,00,000 each, comprising 1,00,000 equity shares of Rs. 10 each. As on 31 January 2026, its unaudited financial position showed net worth of (Rs. 21,54,640.64 thousand), turnover of Rs. 1,405.949 thousand, current assets of Rs. 50,940.617 thousand, non-current assets of Rs. 78,327.204 thousand, current liabilities of Rs. 37,484.184 thousand and long-term liabilities of Rs. 3,07,247.683 thousand.

Sun Direct TV Private Limited was incorporated on 16 February 2005. As on 31 January 2026, its authorised share capital was Rs. 6,00,00,00,000, comprising 60,00,00,000 equity shares of Rs. 10 each, while its issued, subscribed and paid-up share capital was Rs. 4,83,81,77,900, comprising 48,38,17,790 equity shares of Rs. 10 each.

The Scheme proposed amalgamation of the Transferor Company into the Transferee Company. The stated rationale included consolidating the business under a single entity, achieving operational synergies, optimising resource allocation, improving cost efficiency and strengthening oversight and resource utilisation. Upon effectiveness, the Transferor Company would stand dissolved without winding up and merge into the Transferee Company as a going concern. Its authorised share capital would be combined with that of the Transferee Company, while its entire equity share capital held by the Transferee Company and its nominee would be cancelled, with no shares of the Transferee Company required to be issued in exchange.

The appointed date under the Scheme was 1 April 2025. The Board of Directors of both companies approved the Scheme on 26 February 2026. The statutory auditors examined the Scheme and certified compliance of the accounting treatment with Section 133 of the Companies Act, 2013.

For the Transferor Company, there were two equity shareholders, whose 100% consent was furnished by affidavits. There were no secured creditors and two unsecured creditors, whose 100% consent was also furnished. The Tribunal therefore dispensed with the requirement of convening meetings of the equity shareholders, secured creditors and unsecured creditors.

The Transferee Company sought dispensing with its second-motion application and the requirement of convening meetings or filing a further petition in relation to the Scheme. The Tribunal referred to Mahaamba Investments Ltd- Vs- IDI Limited and Andhra Bank Housing Finance Limited -Vs- M/s Andhra Bank, as well as its decisions in Sunfast TVS Limited and others and Sundaram Infotech Solutions Limited and others, concerning mergers involving wholly owned subsidiaries and their parent or holding companies. Applying the position stated in those cases, the Tribunal held that, since Sun Direct GO Private Limited was a wholly owned subsidiary of Sun Direct TV Private Limited, the Transferee Company was not required to file a separate application for sanction of the Scheme under Section 232. The requirement of the Transferee Company filing the second-motion application was therefore dispensed with.

The Transferee Company had three equity shareholders, no secured creditors and 1,687 unsecured creditors. The Tribunal nevertheless dispensed with the requirement of a separate subsequent application by the Transferee Company in view of the wholly owned subsidiary-parent relationship.

Accordingly, CA(CAA)/38(CHE)/2026 was disposed of. The Transferor Company was directed to file the application for the second motion within fourteen days from receipt of the order.

FULL TEXT OF THE NCLT JUDGMENT/ORDER

1. The present application has been filed jointly by the Applicant Companies, namely SUN DRIECT GO PRIVATE LIMITED (hereinafter referred to as “Transferor Company”) with SUN DIRECT TV PRIVATE LIMITED (hereinafter referred to as “Transferee Company”) under Sections 230-232 of Companies Act, 2013, and other applicable provisions of the Companies Act, 2013 read with Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and the National Company Tribunal Rules, 2016 in relation to the Scheme of Amalgamation (hereinafter referred to as the “SCHEME”) proposed by the Applicant Companies. The said Scheme is appended as “Annexure 1” in the application.

2. The Applicant Companies in this Application has sought for the following reliefs;

3. Affidavits in support of the present Application sworn for and on behalf of the Applicant Companies have been filed by its authorized signatories, details of which are listed hereunder: –

i. Kalyanaraman Swaminathan, on behalf of the Transferor Company, as its Director/ Authorized signatory.

ii. Ms. Jayabalan Dhanya, on behalf of the Transferee Company, as its Company Secretary/ Authorized signatory.

4. It is submitted that the Transferor Company is a Private Limited Company, incorporated under the provisions of Companies Act, 2013 on 24.06.2024 with name SUN DIRECT GO PRIVATE LIMITED. The Transferor company is a wholly owned subsidiary of the Transferee company.

5.The summary of the latest financial position of the Transferor Company as on 31.01.2026 and 31.03.2025, are as follows:

(Amount in ’000)

6. MAIN OBJECTS OF THE TRANSFEROR COMPANY IN BRIEF:

The main objects of Transferor Company are set out in its memorandum of association is annexed as Annexure 2. The extracts of the main objects, inter alia, are as follows:

“a. To carry on the business of Application aggregator of Over The Top (OTT) Applications, develop, produce, commission, encrypt, decrypt, aggregate, turn around, and distribute various kinds of entertainment contents/software (programmes); data for their aggregation, exhibition, distribution, dissemination and broadcasting on OTT Applications / TV signals /e-Sports/ Internet based applications/ reality shows/ video and audio signals, be it satellite TV channels or terrestrial TV channels or cable channels/network, IP and Mobile Television, through any mode of technologies; including distribution and dissemination at any events of corporate, individuals and to organize, manage, promote celebrity management, award shows, fashion shows, entertainment shows, music shows, interactive services, exhibitions, events, cultural and luxury events, government and private events, fairs, expositions, seminars, concerts, parties; and to purchase or acquire, take over otherwise or renew recipes, reproduce, formulae, licenses, trademarks, patents, and designs.

b. To receive, buy, sell, procure, develop, produce, commission, decrypt, aggregate, turn around, encrypt and distribute various kinds of entertainment contents/software (programmes); including distribution and dissemination at any events of corporate, individuals and to organize, manage, promote celebrity management, award shows, fashion shows, entertainment shows, music shows, exhibitions, events, cultural and luxury events, government and private events, fairs, expositions, seminars, concerts, parties; and to purchase or acquire, take over otherwise or renew recipes, reproduce, formulae, licenses, trademarks, patents, and designs.

c. To establish, buy, sell, import, export and to create, host and maintain portals, digital platform, OTT platform, application, domains and web servers and to receive buy, sell, procure, develop, produce, commission, decrypt, aggregate, turn around, encrypt and distribute various kinds of entertainment contents/software (programmes); and Distribution of Digital contents and to manage, own all types of Radio Broadcasting including frequency modulated radio broadcasting, satellite radio, Internet Radio and to carry on the business of procuring, leasing, establishing and operating all types of telecommunication and space linkage systems.

d. To act as brand owner, licensee, franchisee, representative or distributors; and to conduct classes, seminars, demonstrations, impart education and training programmes, develop and establish studio, institution, advertisements, classes in the field of entertainment, films production and distribution industry and any business as may be incidental or necessary for the achievement of Company’s object, manage and operate sports franchises, sports teams, create animation, computer enhanced virtual reality gaming options, (including digital and whether now or hereafter), and to carry on the business of manufacturing, processing, designing, formulating, researching, repairing, assembling, importing, marketing, selling, exporting and otherwise dealing, handling and developing online E games relating to live sports events, based on the algorithm which is necessary to run this game, and deliver the same to the end users.

e. To carry on the business of providing Internet Broadband Services, distribution of any television channel, arranging band placements, seeding of set top boxes etc, within India and abroad across different medium being television, internet, broadband, mobile, etc and to collect subscription revenue for the broadcasters either in form of bouquet of channels or individual channel on all modes of distribution including cable, direct to home, digital or analog, terrestrial, satellite or any other emerging mode, to act as Cable TV operator or Multi System operator (MSO).

f. To own, construct, furnish, run, take over, manage, carry on the business of hotel, Hospitality, restaurant, cafes.”

7. It is submitted that the Transferee Company is a Private Limited Company, incorporated under the provisions of the Companies Act, 1956 on 16.02.2005 with name SUN DIRECT TV PRIVATE LIMITED. The Share Capital of the Transferee Company as on 31.01.2026 is as follows:

8. The summary of the latest financial position of the Transferor Company as on 31.01.2026 and 31.03.2025, are as follows:

(Amount in INR Lakhs)

9. MAIN OBJECTS OF THE TRANSFEREE COMPANY IN BRIEF:

The main objects of Transferee Company are set out in its memorandum of association is annexed as Annexure 4. The extracts of the main objects, inter alia, are as follows:

“(i) To plan, establish, develop, provide, operate, maintain wired and wireless including cable or satellite based communications or broadcasting or maintain telecommunication networks, systems, services including telephones, telex, message, relay, data transmission, facsimile, television, telematics, value added network services, paging, cellular mobile, audio and videos services, maritime and aeronautical communication services, Direct Broadcast services (DBS) for radio, audio and data signals, Direct to Home (DTH)broadcast services for television signals with encrypted and conditional access capability, all services of convergent technologies and other telecommunication services as are in use elsewhere or to be developed in future and to act as satellite based services provider and carry on the business of generation, distribution, redistribution, receiver, transmitter of audio, video and radio signals.

ii. To carry on the business of manufacture, assemble, put to place, set up, plant, establish, develop, acquire, purchase, launch, relaunch, hire, lease, time share, manage, maintain, operate, run, replace, sale, upgrade, or otherwise commercially exploit, satellite, space craft ground station assets, transponders, control stations, via uplink or downlink or otherwise for the purpose of transmitting relaying, telecommunicating, broadcasting, narrowcasting, telecasting, any form of radio, audio, video, data, text signals both terrestrially and spatially.

iii. To carry on the business of providing consultancy services relating to communication satellite, transponder, telecommunication, broadcasting network systems, mobile systems, telephony information technology and exploiting software associated with provision and management of telecommunication services.

iv. To telecast, relay, broadcast, produce, uplink and exhibit films, software and to operate television channels in all forms like satellite television, terrestrial Television, cable television, IPTV, Broadband TV either in or outside India and either directly or on-lease/hire basis.

v. To build, own, operate, take on lease, sub-lease, let on hire, sell, satellite earth station teleports, other communication and broadcasting relay stations, call centres, Digital Studios, any kind of communication networks, Virtual Private Network (VPN) , wireless communication, broadband services, Telephony services, to act as Internet service providers, to provide entertainment, video on demand, information related services through Internet /Intranet, Internet through Cable, Telephony on Internet, Video on telephony, to establish Entertainment, Communication and Internet Hubs, studios and kiosks for mass communication and entrainment.

vi. To produce, manufacture, import, export, buy, sell, design, exhibit, put to use, distribute or otherwise deal in all kinds of video films, Cine films, film magazines and related software.

vii. To operate cable TV and for this purpose do such act or things which are generally required by a cable TV operator.

viii. To carry on business as Multi System Operator for Cable Television business and to do such act or thing as required

ix. To relay and broadcast audio programmes through any mode of communication including radio, frequency modulated radio and audio tapes, compact discs and for this purpose buy, sell, take on lease or hire and give on lease/ sub lease or hire any radio or audio relay stations or any other relay centre through or from Government or other agencies either in or outside India.

x. To buy, sell take on lease or hire to give on lease or hire or sublease, any satellite transponders, relay stations and related machineries and equipments either within or outside India and to act as agents or deal in any manner in and for the above.

xi. To produce manufacture, import, export, buy, sell, design, put to use, distribute or otherwise deal in all kinds of television sets, audio and video recorders, video and audio tapes, Video Compact Discs (VCD) , Digital Video Discs (DVD), Video and audio relay equipments and machineries, cable TV relay systems, antennas, set top boxes, digital satellite receivers, dish antennas, multiplexes, modulators, Direct to Home satellite receivers.”

10. Applicant companies have filed their respective Memorandum and Articles of Association inter alia delineating their object clauses. The Transferor Company has filed its audited financial Statements as on 31.03.2025 and unaudited financial statements as on 31.01.2026 are annexed as Annexure 3A and Annexure 3B respectively. The Transferee Company has filed its audited financial Statements as on 31.03.2024, 31.03.2025 and unaudited financial statements as on 31.01.2026 are annexed as Annexure 5A, Annexure 5B and Annexure 5C

11. The Present Scheme provides for Merger of the Applicant companies and the rationale of the scheme is as follows:

“III. RATIONALE FOR THE SCHEME

The transferor company is a wholly owned subsidiary of the Transferee company and the entire equity paid-up share capital is held by the transferee company. The proposed scheme would provide the following benefits:

A. The Boards of Directors of both the Transferor and Transferee Companies have evaluated the amalgamation of the Transferor Company into the Transferee Company. As both entities operate within a related business sector, this merger aims to harness the synergies and collective strengths of their operations. The Boards are confident that this strategic integration will add value for stakeholders by optimizing resource allocation, increasing operational efficiencies, and boosting market competitiveness for both companies.

B. This merger will consolidate the business under a single entity, providing a clearer focus for growth, fostering business synergy, enhancing oversight, and maximizing resource utilization. By combining the resources of the Transferor and Transferee Companies, the merger is expected to achieve higher productivity, improved cost efficiency, and operational effectiveness, all of which will be advantageous for stakeholders.

C. Following the completion of the merger, the Transferee Company will continue operating as a going concern, with the added benefit of aligning the assets and liabilities of the Transferor Company. This will reinforce the financial position of the combined entity, creating a stronger foundation for future earnings and growth, ultimately benefiting shareholders, employees, and customers alike.

D. There is no likelihood that interests of any shareholder or creditor of any of the Transferor Company or the Transferee Company would be prejudiced as a result of the Scheme. The amalgamation will not impose any additional burden on the members of the Transferor Company or the Transferee Company.”

“EFFECTS OF THE SCHEME

Upon the Scheme becoming effective:

1. The Applicant Company /Transferor Company shall without any further application, act, instrument or deed or conveyance shall stand dissolved without being wound up. Further, the Applicant Company shall without any further act, instrument or deed be and stand merged with, transferred to and vested in or deemed to be transferred to and vested in the NonApplicant Company as a going concern along with all its titles, interest pursuant to the provisions of Section 230­232 and other applicable provisions the Companies Act, 2013 and the Rules framed thereunder pursuant to the orders of the jurisdictional Tribunal sanctioning the Scheme.

2. The Authorised share capital of the Transferor Company shall stand combined with the Authorised Share Capital of the Transferee Company.

3. The entire issued, subscribed and paid-up equity share capital of the Transferor Company as are being held by the Non-Applicant / Transferee Company directly and through its nominee, shall be cancelled and shall be deemed to have been cancelled without any further act or deed, and no shares of the Non-Applicant / Transferee Company are required to be issued in lieu thereof.”

12. It is stated that no investigation or insolvency proceedings are pending against the Transferor Company under the provisions of the Companies Act, 2013 or any other law for the time being in force.

13. It is stated that no insolvency proceedings are pending against the Transferee Company. However, the Transferee Company is a party to certain ongoing proceedings, including taxation matters and sectoral disputes, such as disputes with the Ministry of Information and Broadcasting, which are pending before Telecom Disputes Settlement and Appellate Tribunal (TDSAT) and the Hon’ble Supreme Court of India, and are presently under adjudication.

14. The Board of Directors of the Applicant Companies in the meeting held on 26.02.2026, has approved the proposed Scheme as contemplated above. Certified Copies of the Board resolutions passed thereon have been placed on record by the companies on Page no. 600-604 as Annexure 11 and Page no. 606­610 as Annexure 12 of the application respectively.

15. The Appointed date as specified in the Scheme is 01. 04.2025.

16. The Statutory Auditors of the Applicant Companies have examined the Scheme in terms of provisions of Section 232 of Companies Act, 2013 and the Rules made thereunder and certified that the Accounting Standards are in compliance with Section 133 of the Companies Act, 2013. The Accounting Treatment Certificates for the Transferor Company and the Transferee Company are annexed as Annexure 13 & Annexure 14 in the application.

17. With respect to SUN DIRECT GO PRIVATE LIMITED (Transferor Company), it is submitted as under:

I. EQUITY SHAREHOLDERS:

There are 2 (Two) Equity Shareholders and the List of equity shareholders to this effect as on 24.03.2026 is placed on record as a certificate issued by the Chartered Accountant at Pg.No.453,454 as Annexure 6. The Sun Direct TV Private Limited, Transferee Company, holds 99.99% equity shareholding in Sun Direct GO Private Limited, Transferor company. Consent by way of Affidavits was given by all the Equity Shareholders amounting to 100% is also placed on record at Pg.No.455-464 as Annexure 6A & 6B and the Transferor Company has sought to dispense with the meeting.

II. SECURED CREDITORS:

There is NIL Secured Creditor. Certificate has been issued by the Chartered Accountant to this effect as on 24.03.2026 is placed along with the application at Pg.No.465,466 as Annexure 7.

III. UNSECURED CREDITORS:

There are 2 (Two) Unsecured Creditors. Certificate has been issued by the Chartered Accountant to this effect as on 24.03.2026 is placed along with the application at Pg.No.465,466 as Annexure 7. Consent by way of Affidavits was given by all the Unsecured Loan Creditors amounting to 100% is also placed on record at Pg.No.467,476 as Annexure 7A & 7B and the Transferor Company has sought to dispense with the meeting.

18. Taking into consideration the submissions and the documents on record, this Tribunal issues the following directions: –

A) IN RELATION OF TRANSFEROR COMPANY:

I) With respect to Equity shareholders:

Since it is represented that there are 2 (Two) Equity Shareholder in the Company whose consents by way of affidavits forming 100% value have been obtained and are placed on record, the necessity to convene and hold a meeting is dispensed with.

II) With respect to Secured Creditors:

It is represented that there is Nil Secured Creditors in the Company, the necessity to convene and hold a meeting is dispensed with.

III) With respect to Unsecured Creditors:

Since it is represented that there are 2 (Two) Unsecured Creditors in the Company whose consents by way of affidavits forming 100% value have been obtained and are placed on record, the necessity to convene and hold a meeting is dispensed with.

19. In CA(CAA)/38(CHE)/2026, the Transferee Company has prayed for dispensing with the requirement of the Transferee Company to approach this Hon’ble Tribunal under Section 230-232 of the Companies Act, 2013 and consequently for dispensing with the requirement of convening, conducting and holding of the meetings of the Equity Shareholders, Secured Creditors and Unsecured Creditors of the Transferee Company or filing any further petition in connection with the Scheme, subsequent to the present Application.

20. This Tribunal refers to the case of Mahaamba Investments Ltd- Vs- IDI Limited [(2004) 118 Comp Cas 295] and Andhra Bank Housing Finance Limited -Vs- M/s Andhra Bank. [(2004) 118 Comp Cas 295], it was held that there was no necessity of filing a separate petition by the Transferee Company if the merger is of a wholly owned subsidiary and its parent/holding company. This Tribunal in the case of Sunfast TVS Limited and others CP(CAA)/30 & 31(CHE)/2023 and Sundaram Infotech Solutions Limited and others (CP/135/CAA/2017 in CA/60/CAA/2017) has also dispensed with filing a separate petition by the Transferee Company since it was merger is of a wholly owned subsidiary and its Parent/Holding Company.

21. In the present case also, since the Transferor company is the wholly owned Subsidiary of the Transferee Company, it is not necessary to file separate application for sanction of the Scheme under Section 232 of the Companies Act, 2013 by the Transferee Company. Accordingly, this Hon’ble Tribunal dispense with the requirement of the Transferee Company to file the second motion application.

22. The Transferee Company has filed the List of Equity Shareholders, the List of Secured Creditors and the List of Unsecured Creditors. It is seen that the Company has 3 (Three) equity shareholders and the CA certificate dated 24.03.2026 certifying the list of equity shareholders has been placed at Page No. 477,478. The company has Nil Secured Creditor and 1687 (One Thousand Six Hundred and Eighty-Seven) unsecured creditors. The CA certificate dated 24.03.2026 has been placed at Page No.479-515. In view of the fact that the Transferor Company is wholly owned subsidiary, the necessity of filing a separate application hereinafter for the purpose of approval of the Scheme is dispensed with.

23. Accordingly, CA(CAA)/38(CHE)/2026 stands disposed of.

24. The Transferor Company is directed to file Application for the Second Motion within a period of fourteen (14) days from the date of receipt of the Order.