Pillayar Investments And Finance ... vs Unknown

NATIONAL COMPANY LAW APPELLATE TRIBUNAL AT CHENNAI (APPELLATE JURISDICTION) Company Appeal (AT) (CH) No.05/2024 (IA No.82/2024) In the matter of: Pillayar Investments and Finance Private Limited 174-W, 21st Cross Street, Indira Nagar, Chennai- 600 020. ... 1st Appellant/1st Petitioner/Demerged Company

Dilipkumar Enterprises Private Limited No. 137(70A), Velachery Main Road, Guindy, Chennai- 600 032. ...2ndAppellant/2nd Petitioner/Resulting Company-1

Manjulavasanth Enterprises Private Limited, No. 137, Velachery Main Road, Guindy, Chennai- 600 032. ... 3rdAppellant/3rd Petitioner/Resulting Company-2

Present : For Appellants : Mr. Naveen Kumar Murthi, Advocate Mr. Avinash Krishnan Ravi, Amicus Curiae

ORDER

(Hybrid Mode)

13.08.2025 Oral Judgment: Justice Sharad Kumar Sharma, Member (Judicial)

This Company Appeal, has been preferred by the Appellants, questioning

the propriety of the Impugned Order dated 25.01.2023 as it has been passed by

Comp App (AT) (CH) No.05/2024 Page 1 of 5 the learned NCLT, Chennai Bench in CP(CAA)/34(CHE)/2022 as preferred in

CP(CAA)108(CHE)/2021. The consequential effect of the impugned order has

been that, the proceedings, which was being carried under Section 230 to 232 of

the Companies Act, 2013, in the matters of the approval of the Scheme of

Arrangement, between Pillayar Investments and Finance Private Limited, the

demerged company and Dilipkumar Enterprises Private Limited, the resulting

company-1 and Manjulavasanth Enterprises Private Limited, also the resulting

company-2, has resulted in rejection of the said scheme.

2. The proposed Scheme of Arrangement has been rejected by learned

NCLT, Chennai on the ground, which has been recorded by the learned Tribunal

in para 3 of the impugned order, that the Scheme of Arrangement, as presented

under Section 230 to 232 of the Companies Act, 2013 and its applicable

provisions thereon, does not have clear description of the steps involved in the

scheme and that it lacks clarity about, which part of the demerged company is

vesting with which resulting company. Besides that, the Impugned Order records

that Clause (b) of the proposed Scheme of Arrangement, under the title "Parts of

the Scheme", as contained in page 22 of the application, further enhances the

ambiguity, as to, which parts of the demerged undertaking is vesting with which

resulting company. It further records that, Clause 5.1 of part II of the scheme and

Clause 5.1(b) of the scheme are not precise in respect of distribution of assets

Comp App (AT) (CH) No.05/2024 Page 2 of 5 among the Resulting Companies 1 and 2. Hence, the learned Tribunal has come

to the conclusion that the scheme lacks clarity and is not precise, and the clauses

contained under the Scheme of Arrangement are not precise, are obscure and need

clarity.

3. Based on the above findings, the learned Tribunal has concluded that, it

is constrained not to proceed further with the Company Petition in its present

shape and accordingly proceeded to reject the Company Petition. However, in the

concluding part of the Impugned Order, the learned Tribunal observed that, the it

would be left open for the petitioners to file a proper petition containing a scheme

of arrangement in a better and clearer form, for its consideration.

4. When the Company Appeal was taken up today, since all the parties who

were appearing, were in unanimity that, this Company Appeal may be allowed

and the impugned order of 25.01.2023, refusing acceptance of the Scheme of

Arrangement may be quashed and the matter may be remitted back to the learned

NCLT to reconsider the Scheme of Arrangement, with necessary amendments

which is to be furnished by the parties to the appeal and that it may be left open

for the learned Tribunal to decide the same afresh in accordance with law. Owing

to the fact that, there has been a consensus and coupled with the fact that, since

the Tribunal itself has left it open for the parties to refile a proper petition for the

Comp App (AT) (CH) No.05/2024 Page 3 of 5 Scheme of Arrangement, the impugned order dated 25.01.2023 would hereby

stand quashed, subject to the following conditions: -

(i) The matter is remitted back before the learned NCLT, Division Bench,

Chennai, wherein the parties to the appeal would be furnishing a fresh

Scheme of Arrangement, as early as possible, but not later than 6 weeks

from date of uploading of order, which satisfies the terms and conditions

as contained under Section 230 to Section 232 of the Companies Act, 2013.

(ii) The Scheme of Arrangement, which is to be thus intended to be submitted

in compliance of the Impugned Order, the Appellants would ensure that,

whatsoever discrepancy the Scheme suffered earlier and as well the ones

that were pointed out by the learned Tribunal in the impugned order, those

are rectified and that the scheme to be presented before the leanred NCLT

provides clarity in its arrangement particularly qua, the distribution of the

assets and other liabilities, among the Resulting Companies.

5. The matter is remitted back to the learned NCLT to reconsider the fresh

Scheme of Arrangement, which has to be submitted by the Appellants after

meeting out all the shortcomings, which has been pointed out in the impugned

order dated 25.01.2023, and that if the same is furnished in accordance with law

within a period of six weeks from the date of uploading of this Order, the same

would be considered by the learned Tribunal, strictly in the light of the provisions

Comp App (AT) (CH) No.05/2024 Page 4 of 5 contained under Section 230 - Section 232 of the Companies Act, 2013 for

passing of an appropriate decision as permissible under law. Subject to the

aforesaid, the Company Appeal stands allowed and disposed of with the

directions contained herein above. All pending Interlocutory Applications would

stand closed.

[Justice Sharad Kumar Sharma] Member (Judicial)

[Jatindranath Swain] Member (Technical)

AR/MS/RS

Comp App (AT) (CH) No.05/2024 Page 5 of 5