Case Law Details
Oriental Carbon & Chemicals Ltd Vs OCCL Ltd (NCLAT Delhi)
The National Company Law Appellate Tribunal (NCLAT) Delhi recently delivered a significant ruling in the case of Oriental Carbon & Chemicals Ltd (OCCL) vs OCCL Ltd. This judgment addresses the jurisdiction of the National Company Law Tribunal (NCLT) concerning commercial decisions made by a company’s board of directors. Specifically, the NCLAT ruled that once a company board determines a scheme is in the public interest and complies with statutory requirements, the NCLT does not have the authority to alter commercially agreed terms such as the appointed date. This decision is pivotal for corporate governance, reinforcing the boundaries between judicial review and commercial judgment.
Background of the Case
The appeal was filed by Oriental Carbon & Chemicals Limited (the “Appellant” or “Demerged Company”) under Section 421 of the Companies Act, 2013, challenging the order dated April 10, 2024, by the National Company Law Tribunal (NCLT), Ahmedabad Bench. The contested order involved the approval of a Scheme of Arrangement of Demerger between the Appellant and OCCL Limited (the “Respondent” or “Resulting Company”), where the NCLT altered the Appointed Date to the pronouncement date of the order, deviating from the agreed terms of the Scheme.
Appellant’s Argument
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