NCLAT Chennai rules merger schemes cannot be rejected at first motion on delay or appointed date issues. Objections to be considered at final approval.
Merger Scheme Can’t Be Rejected Prematurely: NCLAT Chennai
The NCLAT, Chennai, set aside the rejection of the first motion for approval of a merger scheme between Hinduja Group and GOCL Corporation, holding that issues of delay and appointed date were prematurely considered.
The tribunal observed that objections relating to implementation timelines and effective date must be assessed at the final approval stage, not during admission. The bench stressed that the purpose of the first motion is to examine prima facie validity and compliance with procedural requirements under Sections 230–232 of the Companies Act, 2013.
This decision protects the staged nature of merger approvals. Practitioners should argue against early dismissal on post-merger implementation concerns. The ruling ensures that valid schemes are not derailed at threshold stages based on speculative objections.
Citations
- Companies Act, 2013, Sections 230, 231, 232
