prpri Merger Case Study- Private Limited Company with LLP Merger Case Study- Private Limited Company with LLP

Merger Case Study- Real Image with Qube

Merger & Amalgamation “ Private Limited Company With Limited Liability Partnership


Transferor:  M/s Real Image LLP

Transferee:  M/s Qube Cinema Technology Private Limited

Provisions Attracted:  Section 230-232 of Companies Act, 2013 &  Section 60-62 of Limited Liability Partnership Act, 2008

Order of NCLT received on : 11/06/2018

Jurisdiction : Chennai Bench (NCLT)

Merger and Acquisitions is the path which is taken over by businesses to achieve not just linear but exponential growth. It is taken by businesses as a tool to sharpen and penetrate markets that are waiting for disruption or are disrupting. Merger and Amalgamation or take any other corporate reconstruction tool, it has become an integral part of the corporate set-up these days. We all have witnessed bundles of Mergers & Acquisitions related cases where two or more companies are involved in the transfer of asset and liabilities to affect the merger or amalgamation but recently there is judgment passed by the Chennai Bench of NCLT, on 11/06/2018 approving the scheme of Amalgamation where a merger was effected amongst an Indian company (private limited company) and a LLP (Limited Liability Partnership).

Most highlighted fact behind this landmark Merger is the usage of Doctrine of “CASUS OMISSUS” by the learned bench while permitting the merger.


Recently a Landmark Judgment has been passed by the honorable Chennai Bench of NCLT, on 11/06/2018. The Single Bench of NCLT under CP No: CP/123/CAA/2018 approved the scheme of Amalgamation between the parties; M/s. Real Image LLP (Transferor) with M/s Qube Cinema Technologies Private Limited (Transferee Company) and their respective Shareholders & Creditors.

The judgement set a benchmark for Mergers & Acquisitions space in India as Companies Act, 2013 and Limited Liability Partnership Act, 2008 does not contain any express provision for the merger of an Indian private Company with Indian Limited Liability Partnership under any law.

However, it may be noted that the same is not even expressly prohibited under law.

National Company Law Tribunal has open new avenues for the growth for Business sector.


  • A Joint Company Petition was filed by the parties (counsel) to Chennai Bench (NCLT). [Joint petition is allowed under law when the petition is to be made to the same Bench of NCLT]
  • The said petition was made under the provisions of Section 230-234 of Companies Act 2013 read with rules made there under i.e. Companies (Compromises, Arrangements and Amalgamations) Rules, 2016 and National Company Law Tribunal Rules, 2016 and Section 60-62 of Limited Liability Partnership Act, 2008.
  • The Sections of both the Acts deals with Mergers, Amalgamations and Arrangements of two or more companies and two or more LLPs respectively.


  • Petition was filed on going concern basis by the concerned parties.
  • Both the Company and the LLP hereunder indulged into the business of establishing and/or acquiring Audio and Video Laboratories for Recording, Re-recording, Mixing, Editing, Computer Graphics and Special effects for film, Television, Video and Radio Productions etc.
  • Meeting of the shareholders (Equity & Preference), Secured/unsecured creditors was duly convened on 02.2018 at New Woodlands Hotel, Mini Hall, 72-75 Dr. Radhakrishnan Road, Mylapore, Chennai 600004 at different timings, as per the direction of NCLT (find Notice of the said meeting annexed with this report) for having the consent of the stakeholders against the proposed scheme.
    • Quorum for the members: NCLT, fix the quorum at five (5) either in person or by proxy. In case the quorum is not present, NCLT said to adjourn the said meeting by half an hour and the members present shall form the quorum.
    • Quorum for the creditors: Quorum for the meeting of secured and unsecured creditors was fixed at 1/10.
  • However, the meeting of partners/ shareholders of the transferor LLP is dispensed with as it has no secured/unsecured creditors and all the shareholders has given their consent affidavits.
  • Both the parties i.e the transferor LLP & transferee company were clean in their records in terms of compliances as per the report of ROC. In respect to statutory returns, prosecutions, complaints, inspections and investigations- submitted RD, Southern Region.


Question arising out of the matter: Whether an Indian LLP is allowed to get merged with an Indian Private Limited Company?

Statements presented by the counsel for the petitioner companies: (crux)

  • Both the governing acts, Section 230-232 of Companies Act, 2013 & Section 60-62 of Limited Liability Partnership Act, 2008 contains almost same wordings for the amalgamation of Companies and LLPs respectively, and both the acts empower NCLT to sanction the scheme of Amalgamation.
  • Earlier the provisions contained in Section 394(4) (b) of Companies Act, 1956 allows a transferor in a scheme to be a body corporate which includes a LLP.
  • However Companies Act, 2013 does not provide any of such provision in the corresponding Section 232, but Section 234 permits a foreign company to merge into an Indian company or vice versa.
  • As per the definition of foreign company contained in the act, it includes Body

Corporate incorporated outside India, thus includes a foreign LLP.

  • This concludes that a foreign LLP and an Indian Company are allowed to get merged with each other under the ambit of law.
  • No Express provisions are contained hereunder for an Indian LLP.


  • After reaching the legislative intent behind both the said enactments, it is concluded that it would be better to pass the judgment in favor in order to create a desirable business atmosphere for companies and LLPs and facilitate the ease of doing business.
  • This form down a clear case of “Casus Omissus” which means as per the legal dictionary, “a situation omitted from or not provided for by statue or regulation & therefore governed by common law.”
  • The bench stated: If the intention of the parliament is to permit a Foreign LLP to merge with an Indian company, then it would be wrong to presume that the act prohibits a merger of an Indian LLP with an Indian Company. Thus, there does not appear any express legal bar to allow/ sanction merger of an Indian LLP with an Indian Company.
  • The transferor LLP shall be dissolved without winding up from the date of the filing of the certified copy of the order of NCLT with ROC.


“Casus Omissus” literally means case omitted, as stated above it is a situation which is not expressly provided under any law but comes within the general scope of the statue. The language employed in any statue is the determinative factor of the legislative intent. It is the Primary rule of interpretation “Literal Interpretation”, to construct the intent of law from the words used by the law maker.

When the lacuna is the language is of such a nature that unless the omitted word is supplied the statue cannot operate or the true intention of the legislature could not be established, the courts/ tribunals have inserted to ensure that law is not turned into nullity.

Read Text of the NCLT order- M/s. Real Image LLP Vs M/s. Qube Cinema Technologies Private Limited (NCLI); CP/ 123/CAA/2018; 11/06/2018

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