NCLT Mumbai Approves First Motion For Demerger Of Dairy Undertaking Of Sarda Dairy Into Chhattisgarh Investments

The National Company Law Tribunal (NCLT) at Mumbai has allowed the first motion application in a scheme providing for the demerger of the dairy undertaking of Sarda Dairy & Food Products Ltd into Chhattisgarh Investments Ltd.

The scheme provides for reorganisation of reserves, reduction of share capital and demerger of the dairy undertaking into Chhattisgarh Investments Ltd.

The order was passed by a coram of Judicial Member K.R. Saji Kumar and Technical Member Anil Raj Chellan on February 12, 2026.

Sarda Dairy & Food Products Ltd, based in Raipur, is engaged in the business of manufacturing dairy products. Chhattisgarh Investments Ltd, headquartered in Nagpur, is engaged in investment, lending and solar power generation activities. The scheme indicates an internal restructuring by transferring the operating dairy business to the investment-focused entity.

Under the scheme, Sarda Dairy will first reorganise its reserves and reduce its equity share capital. Thereafter, its dairy undertaking will be demerged and transferred to Chhattisgarh Investments Ltd.

In consideration, shareholders of Sarda Dairy will receive 25 redeemable preference shares of Rs. 100 each in Chhattisgarh Investments Ltd. for every 100 equity shares of Rs. 10 each held.

The tribunal dispensed with meetings of shareholders and creditors after noting that the requisite consents had been obtained, including from unsecured creditors representing over 90 percent in value. It also recorded that the rights of the unsecured creditors are not affected by the scheme.

Accordingly, the tribunal directed issuance of notices to the Regional Director, Registrar of Companies, Income Tax authorities, GST authorities, RBI and other regulators. The companies are now expected to move the second motion petition seeking final sanction of the scheme.