NCLT Ahmedabad Approves J B Chemicals-Torrent Pharmaceuticals Merger Scheme

The Ahmedabad Bench of the National Company Law Tribunal (NCLT) on 6 July approved the Scheme of Amalgamation between J.B. Chemicals & Pharmaceuticals Ltd. and Torrent Pharmaceuticals Ltd., observing that the merger was bona fide and in the interest of shareholders and creditors.

Judicial Member Chithra Hankare and Technical Member Dr. V.G. Venkata Chalapathy sanctioned the scheme and held that the amalgamation would take effect in accordance with its terms. The Bench observed:

“We are of the considered view that the proposed Scheme of Arrangement in the nature of Amalgamation is bona fide and in the interest of the shareholders and creditors.”

The boards of both companies had approved the merger scheme on 29 June 2025, with the appointed date fixed as 21 January 2026. Torrent Pharmaceuticals had earlier acquired a majority stake in J.B. Chemicals through binding agreements and an open offer, acquiring over 7 crore shares.

The companies proposed the amalgamation to consolidate operations, expand product offerings and achieve economies of scale. They also submitted that the merger would help unlock new market opportunities, reduce the number of entities and regulatory compliances, and enable long-term sustainable growth.

Furhter, the shareholders approved the scheme at meetings held on 28 April 2026, with 99.02% of the public shareholders of J.B. Chemicals voting in favour of the proposal in accordance with the Securities and Exchange Board of India (SEBI) regulations.

The Tribunal had issued notices to the Regional Director (North Western Region), Registrar of Companies (RoC), Official Liquidator, SEBI, BSE, NSE, Competition Commission of India and the Income Tax Department.

The Regional Director raised concerns regarding compliance with Section 232(3)(i) of the Companies Act, 2013, which deals with payment of fees and stamp duty in case of a merger. Torrent Pharmaceuticals clarified that differential fees and stamp duty would be paid as required and that accounting treatment would comply with Ind AS 103, the accounting standard governing business combinations.

The RoC directed the petitioner companies to preserve their books of accounts and records and ensure compliance with all applicable statutory requirements.

The Official Liquidator reported that J.B. Chemicals had filed its audited financial statements up to March 2025 and had not accepted any deposits under Section 73 of the Companies Act, 2013. It also informed the Tribunal that certain tax matters were pending but manageable. The Income Tax Department reported outstanding tax demands exceeding Rs. 13 crore against both companies and ongoing reassessment proceedings. Torrent Pharmaceuticals furnished an undertaking to assume responsibility for any tax liabilities of J.B. Chemicals arising after the merger. The companies also submitted that no winding up proceedings were pending against them under the Companies Act, 2013.

The Bench noted that no objections had been raised against the scheme and that the amalgamation was in the interest of shareholders and creditors. It further clarified that approval of the scheme would not exempt the companies from payment of stamp duty or taxes payable under applicable laws.

It directed J.B. Chemicals would stand dissolved without winding up upon compliance with the order, and that all assets, properties, rights and liabilities of J.B. Chemicals would vest in Torrent Pharmaceuticals.

Accordingly, the NCLT allowed the petition and sanctioned the Scheme of Amalgamation.