NCLT Delhi Sanctions Amalgamation Of Ambrosia Corner House With Kafila Hospitality

The New Delhi bench of the National Company Law Tribunal (NCLT) has sanctioned the amalgamation of Ambrosia Corner House Private Limited with Kafila Hospitality and Travels Private Limited.

The order was passed by Judicial Member Jyotsna Sharma and Technical Member Anu Jagmohan Singh on July 2.

The bench observed that shareholders are the best judges of their commercial interests and that the tribunal is not required to examine the merits of their commercial decision.

“It is settled law that the share-holders of the Petitioner Companies are the best judges of their interest, being fully conversant with market trends. Therefore, this tribunal is not supposed to look into merit of their commercial decision.”, the tribunal noted.

Ambrosia Corner House was incorporated in 1974 and changed its name from Nirulas Corner House Private Limited to its present name with effect from September 10, 2021.

Kafila Hospitality and Travels was incorporated in 1995. The boards of both companies unanimously approved the scheme on December 12, 2023, with November 30, 2023 fixed as the appointed date.

The Regional Director had initially raised observations concerning inter-corporate loans, tax disputes, contingent liabilities, property title, borrowings, and payment of fees on the revised authorised share capital.

The companies furnished clarifications and undertakings in response. The Regional Director subsequently informed the tribunal that there was no further objection to the scheme.

The Income Tax Department did not file a report despite notices. Kafila undertook by affidavit to pay any present or future income-tax dues of both companies.

The Official Liquidator reported that the affairs of the companies did not appear to have been conducted in a manner prejudicial to their members or public interest. The companies also submitted that no investigation proceedings were pending against them.

Relying on the Supreme Court's judgment in Miheer H. Mafatlal v. Mafatlal Industries Ltd., the bench reiterated that it would not sit in appeal over the commercial wisdom underlying the scheme.

The bench noted that the scheme had been approved by the members and creditors and found no impediment to its sanction. It accordingly approved the amalgamation.

Under the sanctioned scheme, the transferor company's contracts, employees, liabilities, and pending proceedings will transfer to Kafila. Ambrosia Corner House will stand dissolved once a certified copy of the order is delivered to the Registrar of Companies.