NCLT Ahmedabad Clears JK Paper Group's Composite Scheme To Consolidate Packaging Business

The National Company Law Tribunal (NCLT), Ahmedabad Bench, has sanctioned a Composite Scheme of Arrangement for JK Paper Limited and five group companies, paving the way for consolidation of the group's packaging business.

A coram of Judicial Member Shammi Khan and Technical Member Sanjeev Sharma approved the scheme under Sections 230 to 232 of the Companies Act, 2013.

The tribunal cleared the restructuring with two Appointed Dates. April 1, 2024 applies to the amalgamation of JKPL Utility Packaging Solutions Private Limited, Securipax Packaging Private Limited and Horizon Packs Private Limited into JK Paper Limited.

April 1, 2025 applies to the demerger of the packaging business of Enviro Tech Ventures Limited and the subsequent merger of its residual business into JK Paper.

As the three transferor companies are wholly owned subsidiaries, the Tribunal noted that no shares will be issued for their amalgamation and their share capital will stand cancelled.

Under the scheme, Enviro Tech shareholders will receive one equity share of PSV Agro Products Private Limited for every share held for the demerger. For the merger of Enviro Tech's remaining business, shareholders will be allotted 2,635 equity shares of JK Paper for every 10,000 shares held.

The Regional Director flagged the gap of over a year between the appointed date and the filing of the petition. The companies said the delay was procedural and due to the time taken to obtain no-objection letters from BSE and NSE, as JK Paper is a listed company. The Tribunal accepted the explanation, noting compliance with the SEBI framework.

The Official Liquidator also submitted a report confirming that the affairs of the transferor companies were not being conducted in a manner prejudicial to the public interest. In response to other regulatory queries, the companies undertook to file for satisfaction of charges where “No Dues Certificates” were pending and agreed to bear all applicable stamp duties and tax liabilities arising from the implementation of the scheme.

The companies further submitted that the consolidation is intended to eliminate intra-group transactions and reduce the multiplicity of legal and regulatory compliance. By pooling resources, supply chains, and customer relationships under the flagship listed entity, the group aims to create a stronger, more efficient base for its packaging business operations.

Upholding the commercial wisdom of the stakeholders, the tribunal approved the scheme.

For Petitioners: PCA Harsh Ruparelia

For Regional Director: Deputy Director Shiv Pal Singh

For Income Tax Dept.: Senior Standing Counsel Aman A Mir

For Official Liquidator: Technical Assistant Sandeep Tupe