NCLT Mumbai Approves Sashwat Energy Merger with Shapoorji Pallonji & Co

The National Company Law Tribunal's (NCLT) Mumbai bench has sanctioned a scheme of amalgamation under which Sashwat Energy Private Limited will merge with and into Shapoorji Pallonji and Company Private Limited, holding that the arrangement is “fair and reasonable” and not contrary to public policy.

A bench of Judicial Member Nilesh Sharma and Technical Member Charanjeet Singh Gulati observed.

“From the material on record, the Scheme appears to be fair and reasonable and is not in violation of any provisions of law and is not contrary to public policy. Since all the requisite statutory compliances have been fulfilled, Company Petition bearing C.P. (CAA) 216/MB/2025 filed by the Petitioner Companies are made absolute in terms of prayers clause of the said Company Scheme Petition.”

The tribunal was dealing with a scheme under Sections 230 to 232 of the Companies Act, 2013, involving the merger of Sashwat Energy, a wholly owned subsidiary engaged in solar PV products, LED lighting, and solar water pumps, with and into its parent, Shapoorji Pallonji and Company, a flagship infrastructure and engineering group with interests spanning construction, energy, water, infrastructure, real estate, and financial services. The appointed date for the scheme has been fixed as April 1, 2024.

The bench recorded that the boards of both companies had approved the scheme through resolutions passed on December 18, 2024 and January 8, 2025.

It also noted that the companies had complied with all statutory requirements and undertaken to meet applicable regulatory obligations, including those relating to accounting standards, tax laws, and stamp duty.

No objector came forward to oppose the scheme. The Regional Director, Western Region, Ministry of Corporate Affairs, had filed a report raising certain observations, including on accounting treatment, compliance with tax provisions, stamp duty set-off, beneficial ownership disclosures, and regulatory compliances.

The companies responded to these observations through affidavits and undertakings. After considering these responses, the Regional Director stated that no further objections survived.

The Official Liquidator, in its report dated November 18, 2025, stated that the affairs of the transferor company had not been conducted in a manner prejudicial to public interest or the interests of creditors.

Taking note of these factors, the tribunal sanctioned the scheme and directed that the transferor company shall stand dissolved without winding up. It ordered that all assets, properties, rights, liabilities, and obligations of the transferor company shall stand transferred to and vest in the transferee company without any further act or deed.

The tribunal also directed that all employees of the transferor company shall continue as employees of the transferee company without any break in service and on terms not less favourable than those existing prior to the amalgamation. Any legal proceedings by or against the transferor company will continue against the transferee company.

At the same time, the bench clarified that its approval of the scheme would not be construed as granting any exemption from payment of stamp duty, taxes, or other statutory charges and that the Income Tax Department would remain free to examine any tax implications arising from the amalgamation.

It also made clear that any regulatory authority would be at liberty to take action in accordance with law if any violation is found.

The tribunal directed the companies to file a certified copy of the order with the Registrar of Companies in the prescribed form within 30 days and to comply with other statutory filing and stamp duty requirements within the stipulated timelines.