NCLAT gives go-ahead for Indiabulls Real Estate-Embassy Group merger
Indiabulls Real Estate (IBREL) and Embassy Group, the appellate tribunal NCLAT has sanctioned the scheme of amalgamation to merge both the real estate firms after setting aside the NCLT order stalling the process. «We set aside the impugned order of NCLT, Chandigarh and allow the prayer to sanction the scheme of amalgamation between the appellants (Indiabulls Real Estate, Embassy one & NAM Estates),» said a two-member NCLAT bench.
The merger was on hold for the last 18 months, as the Chandigarh bench of the NCLT had withheld its permission in May 2023, despite all regulatory clearances from the CCI, bourses, RoC and approval from respective shareholders and creditors.
The appellate tribunal said the National Company Law Tribunal (NCLT) should not have interfered in the valuation done by the experts using one of the standard prescribed valuation methods.
«After going through the facts and circumstances and the relevant judicial precedences, we hold that NCLT, Chandigarh has erred in interfering in the Scheme ignoring the commercial wisdom of shareholders, creditors and Board of Directors of the appellant companies,» said NCLAT.
The NCLT had withheld its permission based on the objection from the the Income Tax Department over valuation and swap ratio under the scheme, however, the appellate tribunal observed that during the proceedings, the department had later left the approval of the scheme at the discretion of the tribunal.
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