NCLT New Delhi Sanctions Fybros Moddular-Balar Marketing Merger, Holds Scheme Fair And Reasonable

The New Delhi National Company Law Tribunal (NCLT) on 15 July sanctioned the amalgamation scheme between Fybros Moddular Pvt. Ltd. and Balar Marketing Pvt. Ltd., holding that the merger was fair, reasonable and not prejudicial to the interests of shareholders or creditors.

A Bench comprising Judicial Member Bachu Venkat Balaram Das and Technical Member Ravindra Chaturvedi approved the scheme under the Companies Act, 2013, after considering the reports of statutory authorities and the companies' submissions. It observed:

“This Tribunal is of the considered view that the Scheme of Amalgamation proposed amongst the Transferor Company and Transferee Company does not appear to be prejudicial to the interests of equity shareholders and creditors of the transferor and transferee company. The Scheme appears to be fair and reasonable and beneficial to the said companies and their stakeholders.”

The petition was jointly filed by Fybros Moddular Pvt. Ltd. (Transferor Company) and Balar Marketing Pvt. Ltd. (Transferee Company) seeking approval of the merger scheme. Fybros Moddular, incorporated in 2015, is engaged in manufacturing electrical accessories, switches and electronic components, while Balar Marketing, incorporated in 1992, is involved in trading and manufacturing various goods and commodities. The appointed date for the amalgamation was fixed as 1 April 2023.

The companies submitted that the amalgamation would result in efficient and economical management, cost savings, pooling of resources, and rationalisation of administrative expenses and services. They also stated that the merger would help achieve an optimal capital structure and eliminate inefficient share capital instruments.

The petitioners further submitted that the combined entity would have enhanced capabilities and resources, allowing it to compete more effectively and improve its financial and business prospects. They stated that the scheme would not prejudice the interests of members, creditors or the general public.

The first motion application was allowed on 17 December 2024, with the NCLT dispensing with the requirement of convening meetings of shareholders and creditors after noting that all stakeholders had provided their consent.

During the second motion proceedings, the NCLT issued notices to the Regional Director, Registrar of Companies, Income Tax Department and Official Liquidator. The Regional Director initially raised concerns regarding audit remarks, maintenance of cost records, statutory dues and pending litigations. The companies provided clarifications, following which the Regional Director confirmed by February 2026 that no further objections remained.

The Official Liquidator reported that no complaints had been received against the scheme and supported its sanction. The Income Tax Department did not file any objections despite being granted multiple opportunities.

The companies also undertook to maintain their accounts in accordance with the method of accounting prescribed under the applicable Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013. They further submitted that no proceedings were pending against them under the Companies Act, 1956, the Companies Act, 2013, or any other applicable law.

The Bench observed that the scheme was fair, reasonable and beneficial to both companies and their stakeholders, and did not adversely affect shareholders or creditors. It further held:

“The sanctioned Scheme of Amalgamation shall be binding on the Transferor Company and Transferee Company, and their respective shareholders and creditors. That the Transferor Company and the Transferee Company shall remain bound to comply with all applicable statutory requirements.”

Accordingly, the NCLT allowed the application and sanctioned the scheme of amalgamation between Fybros Moddular Pvt. Ltd. and Balar Marketing Pvt. Ltd.

For Applicants: Advocates Arun Saxena, Sanu Pastore, GC Pandey and Nalini