NCLT Chennai Approves Merger Of India Radiators With Mercantile Ventures

The National Company Law Tribunal (NCLT) at Chennai has approved the Scheme of Amalgamation under which India Radiators Limited will merge with Mercantile Ventures Limited, holding that the scheme would benefit the companies and would not be detrimental to the interests of their shareholders.

A bench of Judicial Member Sanjiv Jain and Technical Member Venkataraman Subramaniam observed,

“After analysing the Scheme in detail, this Tribunal is of the view that the Scheme as contemplated amongst the Petitioner Companies seems beneficial to the Companies and will not be in any way detrimental to the interest of the shareholders of the Companies.”

India Radiators and Mercantile Ventures jointly approached the Tribunal seeking approval of a Scheme of Amalgamation aimed at consolidating businesses, reducing administrative and operational costs, eliminating duplication and improving efficiency. The companies stated that the merger would strengthen the combined entity and facilitate further growth.

Earlier, the Tribunal had directed the convening/ dispensation of meetings of the companies' shareholders and creditors. After obtaining the requisite approvals, the companies filed the second motion petition seeking sanction of the scheme.

Subsequently, the Tribunal had directed issuance of notices to the Regional Director, Registrar of Companies, Official Liquidator, Income Tax Department and other statutory authorities.

The Regional Director raised certain observations relating to the appointed date, employee protection, accounting treatment and statutory compliances. The Official Liquidator sought undertakings regarding protection of employees, fixation of the record date, modification of the scheme only with the Tribunal's approval and cancellation of inter-se investments. The Income Tax Department stated that while it had no objection to the scheme, its right to initiate proceedings for recovery of tax dues would remain unaffected.

The companies furnished undertakings addressing each of these concerns.

After examining the objections and the scheme, the Tribunal observed that no other objections had been placed on record. Accordingly, it sanctioned the Scheme with the appointed date being January 1, 2025.

“Notwithstanding the above, if there is any deficiency found or, violation committed qua any enactment, statutory rule or regulation, the sanction granted by this Tribunal will not come in the way of action being taken, albeit, in accordance with law, against the concerned persons, directors and officials of the petitioners.” it clarified

For Petitioner: Advocate B Chandra

For Income Tax Department: Advocate Raj Jhabakh

For Official Liquidator: B Palani

For Regional Director: Advocate Avinash Krishnan Ravi