Higher authority set aside earlier appellate order and upheld approval of amalgamation scheme for four private companies despite valuation challenge

The SC set aside the NCLAT order and upheld the NCLT's approval of the amalgamation scheme, confirming the scheme as it applied to four private companies with the appellant. Although it was alleged the valuer disregarded proper methodology and proceeded by guesswork in fixing the share exchange ratio, the Court found it appropriate to confirm the NCLT's order and disposed of the appeals.

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Issues: Whether the scheme of amalgamation as approved by the NCLT in respect of four private limited transferee companies with the transferor company should be confirmed despite the NCLAT having set aside the NCLT order.

Analysis: The Court examined the limited contested scope the scheme as it relates only to four private limited companies in light of the NCLT approval and the NCLAT's interference. The statutory threshold for a person to be treated as aggrieved under Section 230(4) was noted as relevant to the competence to object to the scheme. The record shows that the challenged portion concerns private limited companies for which requisite internal approvals existed and the objector did not have shareholding or locus affecting those entities. The Court considered the propriety of NCLAT's refusal to limit its interference and whether the NCLT's approval in respect of the four private companies should be sustained.

Conclusion: The scheme of amalgamation as approved by the NCLT is confirmed in respect of the four private limited transferee companies; the NCLAT order insofar as it set aside that approval is set aside. The decision is in favour of the appellant.

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