NCLAT Chennai Directs Meetings for California Burrito Cross-Border Merger Scheme

California Burrito Pte Ltd Vs Burrito Restaurants Private Limited (NCLAT Chennai)

Summary: The National Company Law Tribunal, Chennai Bench, considered an application concerning a proposed inbound cross-border merger between California Burrito Private Limited, a Singapore-incorporated company, and Burrito Restaurants Private Limited, the Indian transferee company, under Sections 230-232 and Section 234 of the Companies Act, 2013, read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and the Foreign Exchange Management (Cross Border Merger) Regulations, 2018.

The Scheme contemplated amalgamation of the Singapore transferor company into the Indian transferee company as a going concern, subject to approvals under Indian and Singapore law. The Scheme provided for issuance of shares by the transferee company to the shareholders of the transferor company based on the prescribed share exchange ratio and cancellation of shares of the transferee company held by the transferor company. The Tribunal considered the corporate objects, share capital, financial position, valuation report, accounting-standard compliance and the proposed mechanism for implementation of the Scheme.

The Scheme contemplated an Appointed Date of April 1, 2026, subject to the provisions of the Scheme and approval by the Tribunal. The Tribunal thereafter issued directions concerning meetings of equity shareholders, preference shareholders and unsecured creditors of the transferee company, while recording that there were no secured creditors and therefore no meeting of secured creditors was required. The order prescribed the quorum, meeting dates and times, appointment of the Chairperson and Scrutinizer, notice and advertisement requirements, regulatory notices and filing of compliance affidavits.

The application, CA (CAA) / 60 (CHE) / 2026, was accordingly allowed. The order reflects the procedural stage of consideration of a cross-border merger Scheme and the Tribunal’s directions for obtaining stakeholder approval before further consideration of the Scheme.

Analysis

The order concerns an inbound cross-border merger in which the resultant entity is the Indian company. The statutory framework identified in the order principally comprises Sections 230-232 and Section 234 of the Companies Act, 2013, Rule 25A of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and the Foreign Exchange Management (Cross Border Merger) Regulations, 2018. TaxGuru’s analysis of Section 234 explains that cross-border mergers are subject to the framework applicable to mergers under the Companies Act together with the prescribed foreign-exchange requirements. The Tribunal’s directions in the present matter are consistent with the statutory meeting mechanism under Section 230, under which the Tribunal may direct meetings of members or creditors and prescribe the manner in which such meetings are to be conducted.

A significant feature of the Scheme is its treatment as an inbound cross-border merger. The foreign transferor company is incorporated in Singapore, while the Indian transferee company is proposed to remain the surviving entity. The Scheme therefore addresses both the Indian corporate-law process and the parallel process required under Singapore law. The order records that the transferor company proposed to seek approval of the Scheme from the High Court of Singapore and that the Scheme was conditional upon, among other matters, approval by the requisite classes of shareholders and creditors, lodgement of the Singapore Court Order with ACRA and sanction of the Scheme under Indian law.

The foreign-exchange component is governed by the Foreign Exchange Management (Cross Border Merger) Regulations, 2018. Those Regulations specifically recognise an inbound merger as a cross-border merger where the resultant company is an Indian company and prescribe requirements relating to securities, overseas assets, liabilities, valuation and reporting. The Scheme in the present case also records the proposed share issuance to the shareholders of the Singapore transferor company, with separate exchange ratios prescribed for ordinary shares and Series A compulsorily convertible preference shares.

The order also records the valuation exercise undertaken by a registered valuer and the certification by the statutory auditors regarding compliance with applicable accounting standards under Section 133 of the Companies Act, 2013. The financial position and share-capital particulars of the applicant/transferee company were placed before the Tribunal as part of the Scheme documentation.

At the procedural stage covered by this order, the Tribunal directed meetings of 27 equity shareholders, 17 preference shareholders and 23 unsecured creditors of the transferee company. Since the company represented that it had no secured creditors, no meeting of secured creditors was directed. The order further prescribed quorum requirements, appointed a Chairperson and Scrutinizer, specified the manner and timing of notices and advertisements, and required notices to regulatory authorities including the Regional Director, Registrar of Companies, Reserve Bank of India and Income Tax Authorities.

The decision is therefore principally procedural in nature. It records the Tribunal’s consideration of the Scheme documentation and directs stakeholder meetings necessary for progression of the proposed cross-border amalgamation. The ultimate effectiveness of the Scheme remained subject to fulfilment of the conditions specified in the Scheme and the requisite approvals under Indian and Singapore law.

FULL TEXT OF THE NCLAT JUDGMENT/ORDER

1. This application has been filed by the Applicant Company, namely CALIFORNIA BURRITO PRIVATE LIMITED (hereinafter referred to as “Transferor Company) with BURRITO RESTAURANTS PRIVATE LIMITED TED, Non-Applicant Company (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 in relation to the Scheme of Arrangement (hereinafter referred to as the “SCHEME”) proposed by the Applicant Company. The Scheme is appended as “Annexure 12” in the application at Pg. No. 247-270.

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

3. Affidavit in support of the Application sworn for and on behalf of the Applicant Company has been filed by its authorized signatory, detail of whom is as under: –

i) Mr. Gregory Bertrand Muller, on behalf of the Transferee Company, Director, as its Authorized signatory.

4. It is submitted that the Transferee Company is a Private Limited Company, incorporated under the provisions of Companies Act, 1956 on 22.02.2012 with the name BURRITO RESTAURANTS PRIVATE LIMITED. The registered office of the company is shifted from State of Karnataka to State of Tamil Nadu pursuant to the order of Regional Director, South East Region dated 20.11.2025 and RoC Certificate was issued at Chennai on 24.02.2026.

(A) MAIN OBJECTS OF THE TRANSFEREE COMPANY:

The main objects of Transferee Company are set out in its memorandum of association and inter alia, as follows:

“1. To establish and operate a chain of hotels, motels and carry on in India or elsewhere the business hotels, restaurants, cafes, taverns, rest houses, tea and coffee houses, beer houses, pubs, bars, flight caterers, lodging house keepers, refreshment rooms, swimming pools.

2. To carry on India or elsewhere the business to manufacture, produce, process, prepare, is infect, fermentate, compound, mix, clan, wash, concentrate, crush, grind, segregate, pack, repack, add, remove, heat, grade, preserve, freeze, distillate, boil, sterilize, improve, extract, refine, buy, sell, import, export, barter, transport, store, forward, distribute, dispose, develop, handle, manipulate, market, supply and to act as agent, broker, representative, consultant, collaborator, adatia, stockiest, liasioners, middlemen, export house, job workers or otherwise to deal in all types, descriptions, tastes, uses and packs of consumer food items, their by products, ingredients, derivatives, residues, including foods and vegetables, packed foods, powders, pastes, liquids, drinks, beverages, juices, jams, jelly, squashes, pickles, sausages, concentrates, extracts, essences, flavors, syrups, sarbats, flavored drinks, health and diet drinks, extruded foods, frozen foods, dehydrated foods, precooked foods, canned cakes, pastries, confectionery, sweets, chocolates, toffees, breakfast foods, protein foods, other items whether natural, artificial or synthetic of a character similar or analogous to the foregoing or connected therewith and to do all incidental acts and things necessary for the attainment of the foregoing objects.

3. To carry on the business of training, consultancy, business management, licensor of the foregoing objects.”

The objects of the Applicant Company are set out in Clause III (A) of the Memorandum of Association as annexed in Annexure 6, Pg. No. 104-109 of the application.

(B) SHARE CAPITAL OF THE TRANSFEROR COMPANY:

The Share Capital of the Transferor Company as on 31.03.2026 is as follows:

(C) SUMMARY OF FINANCIAL POSITION:

The summary of the financial position of the Applicant Company as on 31.03.2026, as per the financial statements is as below:

(Copy of the audited financial statements and unaudited financial statements of the Applicant Company are annexed and marked as Annexure 8 & 9 respectively.)

5. It is submitted that the Transferor Company is a Private Limited Company, incorporated under the provisions of the Companies Act, 1967 (Chapter 50 of Singapore) on 16.10.2015 with the name CALIFORNIA BURRITO PRIVATE LIMITED. It is a non-applicant company. It is stated that a parallel process for merger shall be taken by the Transferor Company in pursuant to Section 210 read with Section 212 of Companies Act, 1967 of Singapore. It is further stated by the petitioner in the hearing dated 28.07.2026 that the Transferor Company is going to file a petition in the High Court of Singapore for seeking approval of the scheme. The Share Capital of the Transferor Company as on 31.03.2026 is as follows:

6. It is stated that the scheme is an inbound Cross-Border Merger, which is governed under Section 234 of the Companies Act, 2013 read with Rule 25A of the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and Foreign Exchange Management (Cross Border Merger) Regulations, 2018.

7. Applicant Company has filed its Memorandum and Articles of Association inter alia delineating its object clauses. The Applicant Company has filed its Audited Financial Statements as on 31.03.2025 placed at Annexure 8. The Applicant Company has filed its Unaudited Provisional Statements as on 31.03.2026 and is placed at Annexure 9.

8. The Scheme provides for the Amalgamation of the Applicant Company and the rationale of the scheme is as follows:

RATIONALE FOR THE SCHEME

“i. Rationalization and simplification of the corporate group structure by reducing the number of legal entities, thereby aligning the legal entity structure more closely with the business objectives to achieve enhanced operational efficiencies and more agile decision-making processes;

ii. Creation of a consolidated and focused platform for future growth and development of business, facilitating easier access to capital markets and enabling flexibility in fund-raising from both Indian and international investors;

iii. The Amalgamation will result in simplification of the shareholding structure and reduction of shareholding tiers and also demonstrate the direct commitment to, and engagement of, shareholders in India;

iv. Substantial cost savings through the elimination of duplicate administrative functions, reduction of managerial overhead, and simplification of compliance and reporting obligations; and

v. Streamlining business operations to enable more economical conduct of the BRPL’s activities and providing a clearer and more transparent holding structure supportive of long-term strategic objectives.”

9. It is stated that the Board of Directors of the Transferee Company a in the meeting held on 30.06.2026, has approved the proposed Scheme as contemplated above. Certified Copies of the Board resolutions passed thereon have been placed on record by the company at Page no. 241-246 as Annexure 11 of the application.

10. The steps involved in the scheme are as under:

a. Step 1: Part II of the Scheme provides for the Amalgamation of the Transferor Company into Transferee Company as a going concern, without any further act or instrument and pursuant to the provisions of Section 230 to 232 read with Section 234 and Section 66 of Indian Companies Act and Section 210 read with Section 212 of the Singapore Companies Act, Section 2(6) of the IT Act and other applicable provisions, if any, of the Indian Companies Act and / or the Singapore Companies Act.

b. Part III of the Scheme provides the procedure relating to the Transferor Company under the Laws of Singapore. Upon Scheme becoming effective on the Effective Date (and operative with effect from Appointed Date) being the date on which the last of the conditions and matters referred to in Clause 25.1 of this Scheme have occurred or have been fulfilled or waived (as the case may be) in accordance with the Scheme,, inter alia, the whole of the Undertaking of the Transferor Company shall be transferred to and vest in the Transferee Company in accordance with and pursuant to the provisions of Section 210 read with Section 212 of the Singapore Companies Act, the Singapore Court Order and Clauses 10 to 17 of Part II of this Scheme, and other applicable provisions, if any, of the Singapore Companies Act. The Clause 25.1 of the scheme providing for the conditionality of the scheme is extracted as under:

25.1 This Scheme is and shall be conditional upon and subject to:

“i. the approval of the Scheme by the requisite majorities of the various classes ofshareholders and creditors (where applicable) of the Transferee Company as required under the Indian Companies Act, and/or dispensation having been received from the NCLT in relation to conducting meeting(s) for obtaining such approval from the shareholders and/or creditors (where applicable) of the Transferee Company, and the requisite order of the NCLT being obtained in this regard;

ii. the approval of the Scheme by Transferor Company’s shareholders at the Scheme Meeting in compliance with Section 210 of the Singapore Companies Act;

iii. the lodgement of the Singapore Court Order with ACRA pursuant to Section 210(5) and Section 212(3) of the Singapore Companies Act;

iv. the grant of the order sanctioning the Scheme in accordance with the Indian Companies Act by the NCLT and such order having become final;

c. Upon the Scheme becoming effective, as per Clause 18.1, the Transferee Company shall, without any further application, act or deed, issue and allot corresponding shares to the shareholders of the Transferor Company whose names are recorded in the register of members of the Transferor Company on the Record Date as per the fair share exchange ratio as detailed below (“Share Exchange Ratio”).

“For every 1 (One) Ordinary Share of Transferor Company that is issued and outstanding on the Record Date, 5.11743 (Five point one one seven four three) Equity Shares of the Transferee Company of face value of INR 5 (Rupees five only) per share shall be allotted on a fully paid-up basis.”

“For every 1 (One) Series A Compulsorily Convertible Preference Share of Transferor Company that is issued and outstanding on the Record Date, 5.11743 (Five point one one seven four three) Series B Compulsorily Convertible Preference Shares of the Transferee Company of face value of INR 100 (Rupees one hundred only) per share shall be allotted on a fully paid-up basis.”

d. On Part II of the Scheme becoming effective, as per Clause 19, each of the existing shares of the Transferee Company, held by the Transferor Company, will automatically stand cancelled and extinguished by operation of law, without payment of any consideration or any further act or deed by the Transferor Company or the Transferee Company, and upon such cancellation, the Transferor Company shall have no further rights and/or privileges attached to such shares.

11. As per Clause 6.5 of Part – I the Scheme, the Appointed Date is defined as follows:

“Appointed Date means April 1, 2026, or such other date that is mutually agreed in writing between the Transferor Company and the Transferee Company or such other date as may be fixed or approved by the National Company Law Tribunal (“NCLT”) at Chennai while sanctioning this Scheme;”

12. The Applicant Company has filed a Valuation Report obtained from a Registered Valuer, namely, Mr. Ramgopal Krishnamurthy, with IBBI Registration No. IBBI/RV/11/2021/14382. The report dated 29.05.2026 is placed as Annexure 17 of the Petition typeset. The Valuation Approach and Share Entitlement Ratio as recommended by the Independent Valuer are extracted hereunder for reference,

13. The Statutory Auditors of the Applicant Company have certified that the Accounting Standards are in compliance with Section 133 of the Companies Act, 2013.

14. Taking into consideration the application filed by the Applicant Company and the documents filed therewith as well as the position of law, this Tribunal issues the following directions: –

(A) IN RELATION TO BURRITO RESTAURANTS PRIVATE LIMITED (TRANSFEREE COMPANY):

I. EQUITY SHAREHOLDERS:

(i) There are 27 (Twenty Seven) Equity Shareholders. Certificate issued by the Chartered Accountant to this effect as on 10.10.2026 is placed along with the application at Pg.No.271-272 as Annexure 13. It has sought for the conducting, convening and holding of the meeting. The Applicant Company vide Memo of Submission dated 27.07.2026 has stated that the due to the recent shifting of the registered office of the applicant company from the State of Karnataka to the State of Tamil Nadu, the requisite infrastructure, secretarial support and logistical arrangements necessary for convening and holding the meetings are available at the office situated in Bengaluru.

(ii) Since the Applicant Company has sought for directions for the meeting of the Equity Shareholders, this Tribunal orders convening, holding and conducting the meeting and in lieu of the memo filed, the Meeting of the Equity Shareholders of the Applicant Company is directed to be held on 16.10.2026 at 10:30 AM at Sapota Park, 1st Main Road, 1st Cross Road, Indiranagar, Bengaluru, Karnataka, India, 560 038 or through video conferencing or if not convenient at any other suitable place for which prior approval shall be sought from this Tribunal within a period of 7 days from the date of this order and prior to the issue of notices.

II. PREFERENCE SHAREHOLDERS:

(i) There are 17 (Seventeen) Preference Shareholders (Compulsorily Convertible Preference Shares). Certificate issued by the Chartered Accountant to this effect as on 27.06.2026 is placed along with the application at Pg.No.273-274 as Annexure 14. It has sought for the conducting, convening and holding of the meeting.

(ii) Since the Applicant Company has sought for directions for the meeting of the Preference Shareholders, this Tribunal orders convening, holding and conducting the meeting. Meeting of the Preference Shareholders of the Applicant Company is directed to be held on 16.10.2026 at 11:30 AM at Sapota Park, 1st Main Road, 1st Cross Road, Indiranagar, Bengaluru, Karnataka, India, 560 038 or through video conferencing or if not convenient at any other suitable place for which prior approval shall be sought from this Tribunal within a period of 7 days from the date of this order and prior to the issue of notices.

III. SECURED CREDITORS: There are NIL Secured Creditors in the Transferee Company. The Chartered Accountant certificate certifying the list of Secured Creditors is placed at Pg. No. 275 as Annexure 15 of the typed set filed with the application. Since it is represented by the Transferee Company that there are NIL Secured Creditors, the necessity of convening, holding and conducting the meeting does not arise.

IV. UNSECURED CREDITORS:

(i) There are 23 (Twenty Three) Unsecured Creditors in the Transferee Company. The Chartered Accountant certificate dated 27.06.2026 certifying the list of Unsecured Creditors is placed at Pg. No. 276-277 as Annexure 16 of the typed set filed with the application. It has sought for the conducting, convening and holding of the meeting.

(ii) Since the Applicant Company has sought for directions for the meeting of the Unsecured Creditors, this Tribunal orders convening, holding and conducting the meeting. Meeting of the Unsecured Creditors of the Applicant Company is directed to be held on 16.10.2026 at 2:00 PM at Sapota Park, 1st Main Road, 1st Cross Road, Indiranagar, Bengaluru, Karnataka, India, 560 038 or through video conferencing or if not convenient at any other suitable place for which prior approval shall be sought from this Tribunal within a period of 7 days from the date of this order and prior to the issue of notices.

15. The quorum for the meeting of the Applicant Company shall be as follows;

i) The Chairperson appointed for the meeting of Applicant Companies shall be Mr. Raymond (Mob: 9677172756). The Fee of the Chairperson for the aforesaid meeting shall be Rs. 1,50,000/- (Rupees One Lakh Fifty Thousand Only) in addition to meeting her incidental expenses. The Chairperson(s) will file the reports of the meeting within a week from the date of holding of the above said meetings.

ii) Mr. V. Sriram Ananth (Mob: 8056279887) is appointed as a Scrutinizer and would be entitled to a fee of Rs. 75,000/- (Rupees Seventy Five Thousand Only) for services in addition to meeting incidental expenses.

iii) In case the quorum as noted above, for the above meeting of the Applicant is not present at the meeting, then the meeting shall be adjourned by half an hour, and thereafter the person(s) present and voting shall be deemed to constitute the quorum. For the purpose of computing the quorum the valid proxies shall also be considered, if the proxy in the prescribed form, duly signed by the person entitled to attend and vote at the meeting, is filed with the registered office of the applicant company at least 48 hours before the meeting. The Chairperson appointed herein along with Scrutinizer shall ensure that the proxy registers are properly maintained. However, every endeavour should be made by the applicant company to attain at least the quorum fixed, if not more in relation to approval of the scheme.

iv) The meeting shall be conducted as per applicable procedure prescribed under the MCA Circular MCA General Circular Nos.(i) 20/2020 dated 5th May, 2020 (AGM Circular), (ii) 14/2020, dated 08.04.2020 (EGM Circular-I) and (iii) 17/2020 dated 13.04.2020 (EGM Circular-II);

v) That individual notices of the above said meeting shall be sent by the Applicant through registered post or speed post or through courier or e-mail, 30 days in advance before the scheduled date of the meeting, indicating the day, date, the place and the time as aforesaid, together with a copy of Scheme, copy of explanatory statement, required to be sent under the Companies Act, 2013 and the prescribed form of proxy shall also be sent along and in addition to the above any other documents as may be prescribed under the Act or rules may also be duly sent with the notice.

vi) That the Applicant shall publish advertisement with a gap of at least 30 clear days before the aforesaid meetings, indicating the day, date and the place and time as aforesaid, to be published in the English Daily “Indian Express” (All India Edition) and “Dina Thanti” Tamil (Tamil Nadu Edition) and in Vernacular stating the copies of Scheme, the Explanatory Statement required to be furnished pursuant to Section 230 of the Companies Act, 2013 and the form of proxy shall be provided free of charge at the registered office of the Applicant Company.

vii) The Chairperson shall as afore stated be responsible to report the result of the meeting within a period of 3 days of the conclusion of the meeting with details of voting on the proposed scheme.

viii) The company shall send notice to concerned Regional Director, MCA, Registrar of Companies Chennai, Reserve Bank of India (RBI) and the Income Tax Authorities as well as other Sectoral regulators who may have significant bearing on the operation of the applicant companies or the Scheme per se along with copy of required documents and disclosures required under the provisions of Companies Act, 2013 read with Companies (Compromises, Arrangements, Amalgamations) Rules, 2016.

ix) The Applicant shall further furnish copy of the Scheme free of charge within 1 day of any requisition for the Scheme made by every creditor or member of the applicant company entitled to attend the meetings as aforesaid.

x) The Authorized Representative of the Applicants shall furnish an affidavit of service of notice of meetings and publication of advertisement and compliance of all directions contained herein at least a week before the proposed meetings.

xi) All the aforesaid directions are to be complied with strictly in accordance with the applicable law including forms and formats contained in the Companies (Compromises, Arrangements, Amalgamations) Rules, 2016 as well as the provisions of the Companies Act, 2013 by the Applicant.

16. Accordingly, the Application, CA (CAA) / 60 (CHE) / 2026 stands allowed.