Abhinand Ventures Pvt. Ltd Vs Essar Power Ltd. (NCLT Ahmedabad)
Summary: The NCLT Ahmedabad considered the joint Company Petition CP(CAA)/22(AHM)2026 seeking sanction of a Scheme of Arrangement between Abhinand Ventures Pvt. Ltd., the Demerged Company, and Essar Power Ltd., the Resulting Company, with 01.04.2025 stated as the Appointed Date. The Scheme provides for transfer of the Brand Undertaking of Abhinand Ventures to Essar Power and restructuring of the Resulting Company’s 0.01% Compulsory Convertible Cumulative Preference Shares by cancellation and extinguishment and recording of the corresponding amount as an unsecured loan. The Tribunal considered the reports and observations of the Regional Director, Registrar of Companies and Income Tax Department, including issues concerning the fair value and accounting treatment of the CCPS, an earlier variation of CCPS into CRPS, RBI/NBFC-related observations, assets and liabilities of the Demerged Undertaking, tax compliance, pending amalgamation proceedings, Section 55 of the Companies Act, open charges appearing in MCA records, and tax demands. The petitioner companies furnished replies and undertakings addressing those observations. The Tribunal noted that the Scheme had received the requisite stakeholder approvals and found that the statutory procedure had been complied with. Relying, inter alia, on the principle concerning commercial wisdom stated in Miheer H. Mafatlal v. Mafatlal Industries Ltd., the Tribunal held that the Scheme as a whole was fair, reasonable and not prejudicial to shareholders, creditors or other stakeholders. It also held that the CCPS restructuring formed an integral part of the composite arrangement and could be given effect pursuant to sanction under Sections 230 to 232, subject to applicable law. The Scheme was accordingly sanctioned, with directions concerning vesting of the Demerged Undertaking, liabilities, contracts, proceedings, employees, tax matters, consideration by issue of 61,98,19,330 equity shares of the Resulting Company, filing, stamp duty, accounting treatment and preservation of statutory rights of the Income Tax Department and other authorities.
