NCLT Ahmedabad Dispenses With Palco Recycle Shareholders' Meeting, Directs Other Stakeholder Meetings

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has directed Palco Metals Limited to convene meetings of its equity shareholders and unsecured creditors within 45 days in connection with a proposed amalgamation with its wholly owned subsidiary, Palco Recycle Industries Limited.

The tribunal also directed Palco Recycle to hold meetings of its secured and unsecured creditors during the same period, while dispensing with the transferor company's equity shareholders' meeting.

The tribunal also directed Palco Metals Limited to convene meetings of its equity shareholders and unsecured creditors within the same period.

The order was passed on June 16 by Judicial Member Chitra Hankare and Technical Member Dr. Velamur G. Venkata Chalapathy.

“Taking into consideration, the application filed by the Applicant Companies and the documents and submissions filed therewith as well as the position of law, this Tribunal propose to admit the application and issue the following orders,” the tribunal observed.

Palco Recycle, the transferor company, is a wholly owned subsidiary of Palco Metals, the transferee company. The scheme proposes the merger of Palco Recycle into Palco Metals. The appointed date under the scheme is April 1, 2025.

The board of Palco Recycle approved the scheme on June 28, 2025. The board of Palco Metals approved it on June 30, 2025.

According to the application, the amalgamation would streamline the corporate structure and consolidate assets and liabilities. The companies also contended that it would improve capital utilisation and reduce duplicate expenses and compliance requirements.

The companies informed the tribunal that a copy of the scheme had been submitted to BSE. They contended that the requirement of obtaining a no-objection letter from stock exchanges did not apply because the scheme involved the amalgamation of a wholly owned subsidiary with its holding company.

The applicants further submitted that neither company is a non-banking financial company. They also contended that the companies do not fall within the ambit of the Competition Act. The tribunal noted that no valuation report was required because the transferor company is wholly owned by the transferee company.

Palco Recycle had seven equity shareholders as of May 28, 2025. All furnished written consent affidavits approving the scheme. They also waived their right to attend a meeting. The company had four secured creditors and 62 unsecured creditors.

Palco Metals had 3,386 equity shareholders. It had no secured creditors and 13 unsecured creditors.

“Convening of the meeting of equity shareholders of the company is hereby directed as sought in prayers within 45 days from the issue of this order as no list of shareholders is provided,” the tribunal held.

The application was allowed. Advocate Laxman Madnani was appointed Chairman. Advocate Vedant Dave was appointed Scrutinizer. The tribunal also directed the companies to issue notices to statutory authorities.